Microsoft has announced its Cloud Solution Provider Programme, and this works through two tier channels, aiming to help resellers expand their service offerings and grow their cloud businesses. Since the company introduced two-tier pricing last year, it has seen a 240% increase in the total number of AppRiver partners engaged to sell Office 365. Revenue growth and total number of Office 365 seats sold also grew by 330%. It is now expanding in EMEA.
The company has a close, long-standing relationship with Microsoft and is currently one of only a handful of Office 365 syndicated hosting partners in the world. That partnership grants immediate access to expertise, support and insight into the Microsoft product roadmap. The company is expanding in Europe, and says it is the first to offer reseller distribution. And it looks like Microsoft is prepared to yield ground on ownerships of everything, having built a mobile and cloud strategy for a non-Windows-dominant world. But it wants to hang onto that massive market that it has built up.
It aims to strengthen customer relationships and expand cloud sales opportunities by enabling partners to provide direct billing, sell combined offers and services, as well as directly provision, manage and support products and services, but some channels have been wary of Microsoft's size and ability to work directly with customers. Jim Tyer is AppRiver's EMEA Channel Director and his company is one of the three Microsoft syndication partners in the US that is supplying Office 365 to the channel.
This is a business model that some channel members don't like, he admits possibly because it is seen as a way for Microsoft to keep tabs on end-user customers and perhaps cut out the channel. And so he is offering insulation from this; end users have a contract with the partner, who controls it. And he can be a lot more flexible in terms of numbers of users, and still offer a “reliable margin” that stays the same for the life of the deal, and with a claimed 96% retention rate for customers, this could be attractive.
“There is a real financial incentive for partners to include Office 365 in their product portfolio because demand is on the rise,” said “More and more businesses understand that they can move to the cloud and increase productivity for less cost, without having to give up familiar Microsoft applications.”
This is a growing business, as he says, with growth in the UK for example up 166% so far this year. He has around 40 active partners in the UK, and want to lift this to 100 by Q1 next year. The next target area with be DACH, and then probably the Nordics. But there are other areas such as Benelux which are going well, and even the Spanish business is good, he says. By addressing Europe, he knows he needs to provide local servers, and is currently using servers in Switzerland to address central Europe.