Whether you want to resell Office 365, become a Dynamics CRM partner, or an online backup reseller, the best and most profitable way to go forward is to become a Microsoft cloud partner. And to go about doing that, you have two options: become a direct provider, or partner with a Microsoft distributor and become an indirect CSP reseller.
You can read in detail about the differences between a direct and an indirect CSP here, but in a nutshell it’s deciding between having a direct relationship with Microsoft, or engaging with a Microsoft certified partner.
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As an MSP or VAR, you may not have the time, capital or resources to meet the requirements to sell directly with Microsoft. Going direct demands initial and ongoing investments that can take time to show any returns.
Here are 5 reasons why going indirect CSP could be worth it for you:
1. Enter the market more quickly
Going indirect CSP means you don’t have to begin on your own, you get all the benefits of working with an experienced technology provider to help ensure your success. One of these benefits is not needing to wait until you have the end-to-end customer relationship management infrastructure in place to enter the market.
“A minimum of 5,000 new Office 365 seats sold every year is required to be a direct CSP”
You also get to skip the laborious process of meeting Microsoft’s specific criteria to resell directly, such as:
• providing 24/7 technical support
• creating a billing platform
• selling a minimum of 5,000 new Office 365 seats every year
• maintaining Microsoft Gold Competencies
2. Expand your offering
In the provider-reseller (two-tier) model, the CSP distributor buys cloud solutions and services from Microsoft that you, in turn, resell to your customers. You get to buy all your SKUs from the distributor and sell them at the profit you choose. You can also leverage professional services offered by your distributor to build your own value-added offering to increase your revenue.
Your distributor can also work with you on transitioning to a cloud model or, if you are already cloud-engaged, help you grow your value with your customers. Having a pre-sales consultant join in with you on complex deals, for instance, can make the difference between winning or losing an opportunity.
3. Lower your financial risks
The indirect CSP model means teaming up with an experienced provider and benefiting from the investments the distributor made to participate in the CSP Program, while owning the full customer relationship and experience.
“Required investments to be a direct CSP range from $50K to over $1M”
It also means less pressure on you to make the investments (ranging from $50K to over $1M) required to be a direct provider. You also get to leverage other value from the distributor, including access to credit, training, and sales support – that all come with a price when you’re on your own.
4. Free yourself to focus on your added value
As an indirect CSP reseller, you are free to focus your efforts where required without having the burden of maintaining multiple systems for billing, provisioning, and support. You do everything for your customers from the distributor’s platform, which are, for most, sophisticated marketplaces that resellers can leverage and white label.
The indirect model is great for businesses that want to focus on strengthening their cloud service offerings and invest more gradually in support and billing capabilities.
5. Secure your share of the cloud
Microsoft has made it clear that its next generation of products will be distributed via the cloud. It’s obvious that Microsoft cannot provide quality support on this scale – this is where the CSP Program was birthed from. It provides partners with a recurring revenue model that allows them to play a more active role in the customer cloud journey.
Starting as an indirect CSP reseller will provide you with the opportunity to take the lead in the migration of customers to the cloud, and carve your place in the cloud reselling ecosystem.
How to Get Started as an Indirect CSP
Services offered by indirect distributors vary. Take a close look at the providers in your area to determine which ones suit your needs. Make sure you come to the table prepared by first reading my article on the 7 Mistakes MSPs Make When Choosing a Microsoft CSP Distributor.
As a final takeaway, here are few questions you can use to start the conversation with your potential CSP distributor:
- Do you offer technical support?
- Will you market my products and services?
- Do you offer data migration?
- Do you establish financing and credit terms?
- Will you help me grow my business?
- Do you sell additional products and services?
In conclusion, while not all CSP providers are equal, the key is in finding the right partner for you and making sure to extract the most value from the investments that are made.