Microsoft Lowers Thresholds on Cloud Competencies

Editor's Note: This entry has been updated throughout based on an interview with Gavriella Schuster, general manager of the Microsoft Worldwide Partner Group.

Microsoft has slashed the minimum number of Office 365 seats partners need to sell to earn a cloud competency by about three-quarters.

The move was one of several reduced competency requirements announced Monday in a blog post by Gavriella Schuster, general manager of the Microsoft Worldwide Partner Group. The blog post provides specifics for changes that Schuster outlined at the Microsoft Worldwide Partner Conference (WPC) in July.

In the biggest reduction, partners aiming for the silver level in the Small and Midmarket Cloud Solutions (SMCS) competency will now only need to sell 40 seats of Office 365 to four new Office 365 customers. That's down from the 150 seats and 10 customers that were required when the competency was introduced a year ago. For the gold level, Microsoft also relaxed the requirements, but less dramatically. To get gold, partners must now sell 250 seats at 25 customers, down from 300 seats at 30 customers last year.

In a telephone interview, Schuster said a lot of partners engaged in the original SMCS competency, but that the higher seat-count was sending a "bad message."

"As we started to work with [customers and partners], what we found is that we really wanted them to spend more time with their customers to ensure that they actually got them up and going and were driving the usage. By having the number of customers so high, we were pushing them in a way that we didn't actually want to. We were pushing them to get to volume rather than quality," Schuster said.

In a separate cloud competency focused on Azure, called the Cloud Platform competency, Microsoft also reduced the sales requirement to achieve silver. In this case, it's about a 40 percent reduction from $25,000 in Azure consumption previously to $15,000 now. That $15,000 requirement applies to what Microsoft calls "developed markets." The requirement for "developing markets" is $10,000.

Benefits are changing for partners with the Cloud Platform competency, as well. The silver level now carries $6,000 per year in Azure credits, up from $3,000 per year before. Gold is also doubled to $12,000 per year from $6,000. Microsoft also ramped up the MSDN and Visual Studio 2015 licenses available to Cloud Platform partners -- doubling silver to 10 licenses and more than tripling gold from 10 before all the way up to 35 licenses now.

For a third cloud competency, Cloud Productivity, which is similar to SMCS but focused on larger customers, Microsoft is shifting its partner-tracking metrics from seats sold and revenues to active use and consumption -- in line with a broad company strategy along those same lines.

"We previously defined performance as seats assigned for Office 365," Schuster wrote in her blog. "Now, achievement comes when you drive Active Entitlements (active users) for silver and gold. You can meet the active user requirement across any Office 365 workload (Exchange, SharePoint Online, etc.) or with Office 365 ProPlus."

Microsoft's internal systems previously could only track Exchange activations, Schuster explained. Now the systems are able to track multiple activations, making it possible to see how deeply a customer is using the Microsoft stack.

Where previously, 500 seats assigned for Cloud Productivity was the bar for silver and 1,500 seats was the bar for gold, the numbers are higher now. Microsoft is now looking for 2,000 Active Entitlements for silver and 4,000 Active Entitlements for gold.

However, that can translate to the same number of end users as before for silver and fewer end users than before for gold, Schuster explained. "If they were on E4, they would have had an entitlement across four different products, so it's essentially equivalent to say that if it was 500 seats, it should be 2,000 Active Entitlements on that same number of seats if they had activated everything," Schuster said.

The blog entry also confirmed official availability of several other WPC announcements. One is the end of the requirement for partners to individually track and assign unique Microsoft Certified Professionals to a specific competency. Another is the official launch of the previously announced Enterprise Mobility Management (EMM) competency.

Eligibility for silver and gold in the EMM competency will also depend on Active Entitlements. Partners will need to register 500 Active Entitlements for silver and 2,000 for gold. Because EMM involves two products -- Microsoft Intune and Azure Active Directory Premium -- the actual number of users could be as little as half those numbers if partners sell both products for every user.

Additionally, Microsoft will continue for a second year to waive the silver competency fee for all of the cloud competencies in order to encourage participation and allow partners to invest the money in growing their businesses rather than paying Microsoft, Schuster said. The credit applies to all five of the cloud competencies -- SMCS, Cloud Platform, Cloud Productivity, Cloud CRM and EMM. The fee to join the Microsoft Partner Network with a silver competency is ordinarily $1,665 in the United States.

Posted by Scott Bekker on September 28, 2015