Partners Cheer Microsoft Incentive To Boost CSP Sales Of Office 365

Microsoft is taking steps to reduce the "conflict" generated by the different routes of sales for Office products and make conditions better for partners in the Cloud Solution Provider program, Microsoft Corporate Vice President, Global Partner Channels and Programs Gavriella Schuster said during her Inspire 2017 keynote Wednesday.

After acknowledging that Microsoft has been slow to update its sales approach for the cloud era, Schuster laid out several ways the Redmond, Wash.-based company is now working to make sales force changes to benefit partners.

One way that hadn't been discussed previously by Microsoft involves incentives for the company's salespeople tied to promoting the CSP program to customers.

Historically, Microsoft salespeople haven't always had incentive to work with CSP partners because of mechanisms such as the Enteprise Agreement, which is offered to customers with at least 500 users or devices and offers volume licensing and other benefits.

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"There's this funny thing called CSP/EA conflict. And I get emails from you every day in my in-box about it. And we have to fix that," said Schuster during her keynote at the Verizon Center in Washington, D.C.

Microsoft salespeople will now "get an incentive, an accelerator, to give them the total contract value of every Office 365 seat you sell through CSP," she told the thousands of partners in attendance.

The statement was met by applause from the audience at the Verizon Center.

Chris Pyle, president and CEO of Champion Solutions Group, a Boca Raton, Fla.-based Microsoft partner, said this change in incentives is something he had been hoping to see at Microsoft -- and is one of many announcements this week that should be helpful to partners. "This is all very positive for CSP partners," he said. "I [also] like the idea of the Channel Manager that focuses on connecting partners with end-user clients who have needs that we can solve," Pyle said.

Michael Goldstein, president and CEO of Fort Lauderdale, Fla.-based LAN Infotech, said the incentive to help boost CSP sales of Office 365 is a "great announcement" from a partner perspective.

The change "makes us work better as a team versus just shooting for an early sale," Goldstein said.

Schuster also pointed to Microsoft's announcement earlier this week of ISV Cloud Embed -- an offering for development of business applications that can be sold through the CSP program -- as well as a shift of Azure incentives for salespeople, who will now be compensated based on consumption of Azure rather than pre-commitment sales.

The change in Azure compensation is meant in part to align Microsoft salespeople with the way that most partners sell the cloud offering and potentially bring more partners into Azure deals, Microsoft executives have said.

The moves are part of a broader reorganization of Microsoft's sales organization, initially disclosed last week in connection with the start of Microsoft's fiscal 2018. Microsoft's sales groups will now be divided into two categories – enterprise and small/medium/corporate – while sales teams also will be organized by industry focus and by product category.

Industries covered are manufacturing, retail, education, financial services, government and health care. The sales groups will be organized based on which product category they focus on – apps/infrastructure, data/artificial intelligence, business applications and modern workplace.

Earlier in her keynote, Schuster said that Microsoft has "innovated on our engineering and our services, and we've innovated on our business model. But we have lagged in the innovation in our sales model. And it shows. ... It's time to change."