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Microsoft Explores Options for Partners to Handle BPOS Billing

Microsoft is reviewing the direct billing model it uses for cloud computing customers, the company's channel chief Jon Roskill told partners this week in a town hall meeting.

When partners resell the Microsoft Business Productivity Online Suite (BPOS) and other Microsoft Online Services products, the customers are billed directly by Microsoft. A partner of record is named, and that partner gets margins on the sale from Microsoft separately. But most partners currently have no way to integrate BPOS into their own billing to customers.

Some partners have said they won't consider Microsoft's cloud solutions until they can bill customers themselves, while others have said BPOS billing creates business-model problems for them. A question from Jamison West, of Seattle-based managed services provider JWCS and one of a few dozen partners at the town hall meeting at the new Microsoft Store in Bellevue, Wash., prompted Roskill's comment about the direct billing review.

After saying that Microsoft "gets" the partner channel more than any other vendor he works with, West said, "I understand I'm going to make money selling [BPOS] and all of those things, but having my clients go direct to Microsoft is a struggle for me."

Roskill, corporate vice president of the Microsoft Worldwide Partner Group, made a pitch for the flexibility of Microsoft's current billing options, but also acknowledged West's concerns.

"Let me start by saying, we are very serious when we say we are dedicated to taking the cloud to customers through the channel," Roskill said. "Ideally, you want to be able to put things like BPOS seats in with your total offering, provide a single bill to the customer and we hear that and we recognize and respect that."

After listing existing features like a quoting tool, systems for putting partner branding on Microsoft's billing and hyperlinks that automatically register a partner when customers do a BPOS service trial, Roskill said Microsoft is working on the issue.

"I literally was in a meeting yesterday with folks at Microsoft at a fairly high leadership level talking about exactly how we can get to doing this, and what are different ways we can approach it, because we want to be able to let you do this," Roskill said during the town hall meeting Tuesday. "The distributors want to be able to SKU-up our products in a way that they can't right now. And you guys want to be able to package it, whether a VAR or a managed service provider, and be able to package it and deliver it as a single bundle to customers. I think with the things we have delivered today, we are giving you tools to allow you to do that, but not to the extent that you would like. And so, I acknowledge that, and we are working on it," Roskill said.

Also during the town hall meeting, video excerpts of which were made available here on Thursday, Roskill provided an update on partners' progress with the new system of Silver and Gold competencies, which went fully live a month ago.

"We have 34,000 Silver partners and we've got about 400 Gold partners that have successfully made it through the competency update and are now certified Gold partners in the competency framework," Roskill said.

Another town hall participant, Arlin Sorensen, chairman and CEO of Harlan, Iowa-based Heartland Technology Solutions, said that the new program requires partners to get strategic with Microsoft.

"Before it was kind of a blanket thing and you became Gold and you were Gold everywhere even if you weren't Gold everywhere," Sorensen quipped. "With the new program, we're going to need to build practices within our organizations, which for a lot of us that are smaller, that's kind of a new thing for us to do. So I think leveraging Practice Builder and even some of the Business Builder tools are going to be very important for us to move into the program successfully."

Roskill said the town hall was the first in a series of about six that he'll hold around the world over the next year. He said they are designed to underscore the community aspect of the Microsoft Partner Network.

The Microsoft Store where the partner town hall meeting took place opened on Nov. 18. It is the seventh Microsoft Store, following openings in the last year in Scottsdale, Ariz.; Mission Viejo, Calif.; Bloomington, Minn.; Oak Brook, Ill.; Lone Tree, Colo.; and San Diego.

About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.

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