Microsoft Adjusts Partner Payouts for Office 365, Windows Intune
Changes rolled out recently give Microsoft partners selling Office 365 and Windows Intune the maximum Partner of Record margin with a much smaller number of seats than were called for by Microsoft's original plan for this fiscal year.
In July at the Microsoft Worldwide Partner Conference, Microsoft introduced a four-tier system of Advisor Incentives. The maximum level involved a first-year payout of 23 percent, but only after partners had sold 2,500 seats or more. Now partners reach the maximum 23 percent payout level with only 150 seats sold.
"What we announced at WPC had a few tiers. We decided we wanted to make it simple," said Josh Waldo, senior director of cloud partner strategy at Microsoft.
Waldo said the two-tier system went into effect around March, when Microsoft also began allowing partners to bill customers for Office 365 through the Office 365 Open licensing program.
Specifically, Microsoft offers a 12 percent incentive payment for new sales or new deployments of Office 365 or Windows Intune. Once partners clear the 150-seats-over-three-deals qualifier for Microsoft's Cloud Accelerate program, they begin to receive a 7 percent Accelerator incentive on top of the 12 percent. In addition, Microsoft pays out a 4 percent maintenance incentive to the Partner of Record each year, including the first.
The new model effectively has first-year incentives worth 16 percent or 23 percent. Previously, the tiers were 16 percent, 20 percent, 22 percent and 23 percent.
As with the earlier Advisor Incentive schedule, incentive payments are retroactive to previous deals once the partner clears the seat hurdle to earn the Accelerator.
"It's retroactive to July 1. The whole goal here is to help partners be profitable with the cloud," Waldo said.
Posted by Scott Bekker on May 01, 2013