Channel Marker

May 12 2011   2:10AM GMT

Microsoft tells partners to register Office 365 customers

badarrow Barbara Darrow Profile: badarrow

Microsoft is starting to talk more about Office 365 partner opportunities

Microsoft channel guy Jon Roskill blogged today:

“The Office 365 beta now enables partners to sign up customers for the beta and register themselves as the Partner of Record.  This feature allows you to get your customers up and running on the Office 365 beta, and to continue to build relationships with them as they move to trial and purchase. A partner of record designation also provides initial advisor fees for each purchase, and perpetual fees for each seat continuing to run Office 365.”

Participants have to be Cloud Essentials partners

With the older Microsoft Business Productivity Online Suite (BPOS), partners got 12% of the license fee for the first year and 6% of that every year thereafter as long as they remained the partner of record. in this SaaS model, VARs don’t stand to make a lot of money on licenses alone.  Office 365 will cost $6 to $27 per user per month – but 12% or 6% of a small number is better than 0% of any number.

Microsoft is trying to navigate a tricky path here. It needs to respond to Google Apps with a less pricy, cloud-based version of its productivity apps, but it also has to placate the VARs and resellers that helped it build its empire. Since the service is delivered from Microsoft servers, VARs are worried about disintermediation.

Trying to juice sales of the older BPOS, Microsoft sweetened the BPOS pot recently with a  promotion that brought the partner a whopping 68% of the first-year’s BPOS license.

Still, it is unclear, at least to me, whether Microsoft has budged on the key issue with its online services push: Customer “ownership.”  Even loyal Microsoft partners beef that with BPOS, Microsoft, not the partner, “own” the customer relationship.  That’s a non-starter with most VARs

Look for Office 365, and its sales model, will be one hot topic at the Microsoft Worldwide Partner Conference 2011 in July.

Let us know what you think about the story; email Barbara Darrow, Senior News Director at bdarrow@techtarget.com.

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