Channel Watch

BPOS Billing on the Table

• By Scott Bekker
• January 01, 2011

Back in November, I argued in this column that Microsoft needs to reconsider its practice of directly billing cloud computing customers if the company expects to gain serious traction among partners. When partners resell the Microsoft Business Productivity Online Suite (BPOS) and other Microsoft Online Services products, Microsoft bills the customers, who pay Microsoft.

A partner of record is named, and that partner gets margins on the sale from Microsoft separately. Most partners currently have no way to integrate BPOS into their own billing to customers.

Ted Theodoropoulos, president of Acrowire LLC in Charlotte, N.C., was one of the readers who wrote to say that the current billing method for BPOS was a gap for partners right now.

"We're not interested in marking up the service, but we are interested in forming a partnership with the customer and direct billing diminishes our ability to do that," Theodoropoulos says. "Partners are simply bolted on to the service as opposed to being integral. In certain cases, we choose to go with other providers like Intermedia who do offer private-label billing because BPOS doesn't offer it."

Jon Roskill, corporate vice president of the Microsoft Worldwide Partner Group, also heard a similar message last month in a town hall meeting for a few dozen partners in the new Microsoft Store in Bellevue, Wash.

Jamison West, of Seattle-based managed services provider JWCS, told Roskill, "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 answered with a pitch for the flexibility of Microsoft's current billing options, but also acknowledged West's concerns. "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, we recognize and respect that."

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

During the December meeting, Roskill said he had just met with Microsoft execs "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."

For Microsoft to publicly acknowledge that billing is an issue for partners and not just a feature is an important and encouraging step. While we understand that Microsoft is a big operation with a lot of complexity and constituencies, we hope the company is able to resolve this issue to partners' satisfaction soon.

How would the ability to bill your customers yourself affect your enthusiasm for BPOS? Let me know at [email protected].