Logicalis Exec: Microsoft Practice Is Surging As CSP Begins To Attract Midsized Business Customers

Solution provider powerhouse Logicalis is planning to double its Microsoft practice this fiscal year, as the firm focuses on offering "end-to-end, turnkey solutions" for digital transformation in connection with Microsoft's Cloud Solution Provider program, a Logicalis executive told CRN.

Wendy McQuiston, director for Microsoft Professional Services at Logicalis U.S., said the growth is spurred in part by the widening range of businesses that are attracted to Microsoft's CSP structure for procuring Office 365 seats and usage of the Azure cloud platform.

[Related: The Top 10 Partner Takeaways From Microsoft Inspire]

"We're finding that it's not just the small customers. Our mid-tier customers are really very interested in the [CSP] offering if they're not in an EA [Enterprise Agreement]," McQuiston said.

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Microsoft's Enterprise Agreement, which covers on-premises Office licenses, is available to customers with at least 500 users or devices and provides volume licensing and other benefits. The length of the agreement is three years, whereas the CSP program offers a monthly subscription that can be adjusted based on usage from month to month.

The CSP approach is seen as more flexible by many businesses as a result of its consumption-based model, and so customers may want to consider CSP once their EA comes up for renewal, McQuiston said.

With CSP, businesses "pay for what they consume—what they use along the way—as opposed to trying to determine upfront what their needs will be over the course of the next three years," she said. "For organizations that flex in size, the CSP is a great model. They can start small and add to it and not make this huge commitment up front."

Ultimately, CSP helps to provide a foundation for "helping [customers] on their digital transformation journey," she said.

While CSP does allow Microsoft partners like Logicalis to participate in licensing in a way that they weren't able to in the past, the revenue benefit from CSP licensing is minimal, McQuiston said. The larger opportunity is that Logicalis can now do more for customers on its own, and avoid having to go to a separate reseller to handle licensing, she said.

"We want to be their trusted advisor, to help them see through all of their licensing. This offering allows us to be the central point of contact for all things Microsoft," McQuiston said. "It allows us to follow the Logicalis model of providing end-to-end, turnkey solutions … It all comes within our partnership with that customer."

New York-based Logicalis, which starts its fiscal year on March 1, is expecting to double its Microsoft practice both in terms of headcount and revenue in the current fiscal year, according to McQuiston. Specific figures for headcount and revenue in the company's Microsoft practice aren't being disclosed.

Logicalis, No. 29 on the CRN 2017 Solution Provider 500, generated $1.6 billion in revenue in its previous fiscal year, with about half of that coming from its U.S. business, McQuiston said. The company employs about 800 in the U.S. and 3,000 globally.

During Microsoft's Inspire partner conference this month, the company announced changes to its sales organization aimed at helping to bolster the CSP program.

Historically, Microsoft salespeople haven't always had an incentive to work with CSP partners because of mechanisms such as the Enterprise Agreement, Microsoft Corporate Vice President Gavriella Schuster said during her keynote at Inspire.

"There's this funny thing called CSP/EA conflict. And I get emails from you every day in my inbox about it. And we have to fix that," Schuster said. She announced that Microsoft salespeople will now get an incentive giving them the total contract value of every Office 365 seat that is sold by partners through the CSP program.