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How Microsoft isn't screwing channel partners on Office 365

10 Oct 14

At a time when the massive growth of the cloud, subscription-based software, mobile devices and apps are placing increased pressure on the local reseller channel, Microsoft is stepping up its campaign to push Office 365 subscription renewals through the channel.

While all of those trends are great news for companies like Microsoft – and their revenues – for resesllers they spell potential disaster, with the vendor holding the end-users details.

No box means the channel partner doesn't even necessarily get called when a client wants to buy software. And cloud solutions are super competitive and cost per seat is easy to compare with other solutions.

In the current climate, it's easy for vendors to sell software direct and cust out the channel partner, in an effort to make their solution more competitive. And why wouldn't they?

Well, Microsoft hasn't, or more precisely, they haven't with Office 365 for iPad and iPhone. The free apps, of which more than 30 million have been downloaded, only allow users to view documents.

It's only when you buy a subscription to Office 365 – from a partner or perhaps online – that you can actually create content using the apps.

With Office 365 not available via the Apple App Store, the door is still open for local resellers to sell it to their customers. What Microsoft has done has finally let local channel partners in on the opportunity to sell iOS apps.

Warwick Grey, Microsoft New Zealand partner account manager, distribution, says there was 'huge need' for the iPad app and many schools are openly talking about how 'thrilled' they are to have it because they want to be able to prepare students for the business world.

However, Grey admits the current climate is leaving resellers vulnerable for stickiness, with the potential to easily purchase online.

He's been touring New Zealand this week as part of the Synnex Synergy Roadshow, and says part of his message to resellers attending it the need for them to be more proactive in chasing renewal opportunities.

With Office 365, customers are get several email reminders from 60 to 30 days prior to the license expiring, suggesting they buy another copy from their reseller or retailer. Only at 30 days from expiry, does the customer get asked to renew direct with Microsoft.

"We don't name the reseller they originally bought the FPP subscription from in our T60-30 day reminders, but there is no offer to buy direct from Microsoft until they reach the 30 day prior to expiration stage," Grey says.

However, he says an issue lies in very few partners having a CRM system to enable them to track those time frames – something he's actively encouraging resellers, and retailers, to get.

“There's an opportunity to proactively go and get renewals there, and that applies to retailers as well. It's a chance to keep close to your customes, rather than always chasing new sales.”

He says on the volume side of the business, some Kiwi resellers are already seeing lucrative renewal payments, and cites the example of one reseller in a small New Zealand city, who is now receiving $10,000/month in renewals.

Grey is also pushing the message to partners to bundle Office 365 as part of the initial device sale.

“Don't try to sell any device without trying to attach Office on any platform, except, for now, Android.

“Too often customers are buying a device, then going home and checking online what software they want,” Grey says. It is, he notes, a missed opportunity for resellers.

It may not be the perfect solution, but at least Microsoft isn't using cloud, apps and subscriptions as an excuse to cut out the channel partners!

If you're a retailer or IT channel partner, what's your take on this ?