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Mailbag: Direct Billing on Office 365

When RCP covers the way Microsoft handles billing in the cloud, most of the responses from partners are pretty negative about Microsoft's approach. Partners motivated to write usually want to handle customer billing themselves, and they say they aren't considering Microsoft's offerings because of the direct billing issue. But my last column about it, "With Office 365, Microsoft's Direct Billing Drama Continues," prompted an e-mail from a reader who asked to be identified only as J.

"Just saw your article. First, I want to point out that syndication is nothing new for BPOS/O365. In fact, it's the primary model in place for partners in countries like Australia.

"Second, I hear the argument other partners are making, but I can see both sides of this. I work for a large partner with many hundreds of customers and just seeing a fraction of the escalations makes me grateful I'm not dealing with billing issues overall. In doing so, there would be cash-flow issues, not to mention how would Microsoft manage the service if they were disconnected from the revenue stream -- would partners want to pay Microsoft directly and then collect money from their customers? Who would decide when a customer gets cut off for non-payment? To some extent, partners that are focused on this piece may be overly focused on a small piece of the business, and, frankly, one that would add very marginal value if it were to change, and at great cost to the partners.

"On the flip side, as a partner I do want to own that relationship with the customer, and I think Microsoft could do more to support its partners, for example, opening up the e-commerce platform, putting partner logos on the invoice, etc. I'm hopeful that Microsoft will get to these possibilities in time and are focused now on the core pieces of the platform. I don't think that many partners, and in articles such as yours, Microsoft gets enough credit for accomplishing what they have been able to in such a short period of time (and I think this is important and applies equally to other technologies in the Microsoft stack), while supporting legacy customers as well as partners."

Thanks for the feedback, J. Especially good points about the escalations and for the perspective on how far Microsoft has come.

Posted by Scott Bekker on August 11, 2011 at 11:58 AM


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