Microsoft Lowers the Middle Finger to the Channel with Office 365 Resell Opportunities

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I wrote an article for Wired magazine some months ago in which a Microsoft employee very adamantly told me that Microsoft will NEVER allow the reselling of Office 365. Well in a move that shocked the channel, yesterday at WPC 2012 in Toronto, Steve Ballmer announced that they now have a plan on allowing partners to resell the Office 365 Suite and bill customers directly for the service.

Saying this has been a hot-topic in the channel is an understatement, as it is common to see the battled and weary Microsoft reps leave conferences with their tails between their legs. This is definitely a peace offering that Microsoft needed and one that will be very welcome to the channel. According to Ballmer, “Microsoft [is] reinventing itself for the modern era.”

With the Microsoft Office 365 Open program, partners will be able to buy subscriptions and resell those to their customers. Additionally if a partner wants to continue to sell Office 365 under the Office 365 Advisor program – Microsoft is FINALLY increasing its margins to 23 percent, when a partner crosses the threshold of 150 seats. Not a huge percentage, but MUCH better then the puny single digit amounts they were previously offering, and one that partners will welcome.

On a disappointing note though, there was no word on other resell opportunities, such as the new Surface Tablets, InTune, Azure, and other products and services. Reselling of Surface Tablets might not be a big “kick in the face” to many partners, but to the OEM partners looking to sell Surface Tablets, it is definitely causing some major tension.

Additionally Ballmer, seems to think that Windows 8 will be a huge opportunity for partners. But I know of very few partners that will be pushing their clients to upgrade from Windows 7 to Windows 8. Being that the U.S. is in an election year, many businesses will be holding out a few months on any possible capital expenses, and so far there are few compelling reasons for a business to upgrade from Windows 7 to Windows 8.

Microsoft reveled that there will be some opportunities for partners in the Yammer acquisition, but details will be forthcoming. Overall I think Microsoft is taking a good step here in restoring the worsening partner sentiment that has plagued them the last 3 years.  Hopefully this is a sign of greater cooperation between Microsoft and the channel.

What do you think about the announcement to resell office 365 and will you be pushing Windows 8 upgrades in a few months? Please share your thoughts below.

 

Todd Nielsen

Todd Nielsen has led IT and telecommunications organizations as Chief Executive Officer, Chief Operations Officer, President, and Vice President. He writes and has written for various IT industry publications, including Wired, ChannelPro, 21st Century IT and ITchannelInsight. His technology passion is cloud computing. His 15+ years of diverse experience dealing with rapidly changing markets and technologies have made him a strong business adviser in the industry. Several years ago, he started writing on leadership and execution to fill a growing hole in the technology channel for those skills. His blog, has been recognized as one of the top leadership blogs on the Internet. The primary niche he helps organizations address is execution (i.e., creating a culture of “getting things done”). He has transformed organizations with his execution workshops and has two books on execution that are expected to be published soon. Todd welcomes connecting on social channels and hangs out at Twitter (@toddbnielsen and @IT_ToddNielsen), LinkedIn, Facebook, and Google+.