5 Microsoft Partners Talk NCE And New Partner Profitability Score

Here’s what five Microsoft partners had to say about NCE, an accompanying 20 percent premium on monthly commitments to popular Microsoft software packages, and the Partner Capability Scores to determine who classifies as a Microsoft ‘Solutions Partner.’

Microsoft partners of all sizes, locations and specialties have opinions on the tech giant’s partner program changes pushed out this year, some of the biggest to hit partners since the Microsoft Certified Solution Provider program launched 30 years ago.

Partners have told CRN that Microsoft’s New Commerce Experience (NCE) and the accompanying 20 percent premium on monthly commitments to popular Microsoft software packages have had some negative effects, including requoting customers on done deals.

For some partners, NCE has resulted in more revenue to invest in the business. And for others, the change in revenue has been negligible.


What Do Microsoft Partners Think Of NCE

Meanwhile, an upcoming major change to the partner program, October’s Partner Capability Scores, will be used to determine who qualifies as a “Solutions Partner” for the Redmond, Wash.-based tech giant. This change has partners getting ready to figure out where they fit after Microsoft replaces its longtime Gold and Silver designations.

Some partners are still navigating how to get more points toward their score and how to give employees time away from customers to get certifications if needed.

CRN has reached out to Microsoft for comment but has not heard back by press time.

Here’s what five Microsoft partners had to say to CRN about NCE and the Partner Capability Score.

Jean Prejean, President

Guardian Computer
Metairie, La.

Tell me about Guardian Computer.

We‘re an MSP. We’ve been in business for 26 years. We‘re based out of [the] New Orleans [area]. Our clients are all over—Texas and Illinois are our two big areas, plus our home state, Louisiana.

We do a fair amount of health care and private equity—[they] are our two bread-and-butter clients. … We‘re a Microsoft shop. We wouldn’t be who we are without Microsoft. And some of these changes have been disheartening.

What’s been difficult about these Microsoft partner program changes?

The NCE program—the portability of the licenses … If they would change these few little things, it would really help. One is, say a client comes to us from another MSP and they have the NCE one-year commitment, they can‘t transfer that to us.

They have to continue to deal with their old MSP for licenses, which kind of leaves everybody in a pickle because part of that is when you sell a license you’re supposed to provide the support for the license.

Have you encountered this problem yet?

Absolutely. It has happened, and there is nothing we can do. … That MSP—they as the old one—will collect the money. And then us as the new one will provide the support. But if they need new licenses, or anything like that, their old MSP still has to have admin privileges. … It’s hard to tell a new client, ‘Hey, but you’ve got to still deal with your old MSP for another 10 months.’ … And sometimes there is bad blood in there.

And I’ll give you another thing … [if] we’re getting the shakes that they [a customer] may go under or be sold, we’re on the hook for the NCE licenses, not them. So they can quit paying us and our hands are tied. … If we’re going to pay for it, then why can’t we move it from client to client? … The MSPs, a lot of us, are relatively small. And we don’t have a single voice to Microsoft. So I think it’s maybe hard for them to hear the feedback because we’re just a bunch of little fish. But if you add us up, I’m sure we make a difference.

How did your clients respond to the monthly or annual commitment offer?

Our clients are often medium-size businesses. They’re used to paying things monthly. You pay your electric bill monthly, your rent monthly. And they don’t know what’s going to happen in a year.

And they also can‘t reduce the number of licenses [under an annual commitment]. Just think if COVID had happened and their workforce shrunk by 20 percent, they’d be on the hook for that. They need the flexibility, they don’t have the big pockets of the top 500 companies or whatever. So that lack of flexibility and having that annual commitment hanging over their head is scary and not what they’re looking for.

Have distributors been helpful in NCE adoption?

[Ingram Micro has] had some great webinars on the features with other MSPs. A lot of conversation going around. … Just think of the burden they took off of Microsoft and continue [to do so].

They have these weekly or every other week webinars. And they just keep answering questions. And then Microsoft keeps making tweaks. They keep us informed.

Have you looked into the new Partner Capability Score?

We have. And that’s been disheartening. We’re so far from being able to qualify that it’s been like, ‘OK, we don’t even have to dig into this anymore.’

Our clients, it’s easy, you think of Bronze, Silver, Gold. People just understand that.

And whatever this new thing is, trying to explain that to a client, they don’t even want to hear it.

But if we say, ‘Hey, right now we‘re a Gold partner and that means that we do enough to know what we’re doing. We’re trained.’ I mean, it’s simple. It’s clear. And it distinguishes us as a Microsoft expert.

You saw a marketing benefit to the Gold and Silver designations?

Yes. I don’t know if we could put a dollar amount on that. But, certainly, I think, yes. Our clients take that as a sign that we’re for real in the Microsoft realm.

What’s your message to Microsoft’s new channel leadership?

Listen to the smaller MSPs. Simplicity is important to us. … With the NCE thing, if they would just work with us to tweak it a little bit, I think it would be a win-win. And that’s the whole portability aspect, letting us take it from distributor to distributor, client to client, MSP to MSP. Just those three things would be huge.

What Microsoft products have been popular with your customers lately?

The whole Office suite is huge. Teams is great. We use it internally and our clients are adopting it over Zoom and some of the other big ones.

Microsoft has such good products. They could grow just within their own client base. Their Windows Defender is now a real contender. … There is a positive side. Their products are all so well integrated that we put up with all their humbug because they do have exceptional products.

Tony Guidi, SVP, Strategic Partnerships
Core BTS

How’s it going with adopting the changes under Microsoft’s NCE?

It’s been, I’ll say, both good and bad. There’s complexity to migrating a whole portfolio of clients over to the new NCE platform.

But we built out a very rigorous approach to it and have some operations people on our CSP [Cloud Solution Provider] team who’d been able to coordinate to be able to make that go as smoothly as possible.

But the positive side of it for us as a partner—and even for our clients—was the opportunity to get with each one of our clients individually and remap out what their licensing strategy needs to be with Microsoft because NCE rolled out with some price increases at the same time.

We viewed it as an opportunity to sit down with clients and really reassess whethery they are maximizing the value of their Microsoft spend and look at what they’re using versus what they’re not and what their road map is.

We have a program called ‘cloud grid’ that we do with our clients where we map out over three years exactly what the client is going to be leveraging from a Microsoft technology perspective and then really walk that back to, ‘What do I own today? What do I need to own next year? What do I need to own the year after that in order to align with my strategy?’

There was a lot of heavy lifting for several months, but it gave us an opportunity to really right-size the Microsoft licensing position of all of our CSP clients.

When did you launch the cloud grid?

We’ve had the offering for several years, it’s under an umbrella called Compass. And cloud grid is really the deliverable that’s part of that engagement.

And what it really is … is sitting down with a client and mapping out technology profiles by user types and what’s your three-year strategy for adopting Microsoft technologies? And then how does that strategy align with what you own today? So we put this cloud grid—which is the deliverable—together.

And we can actually map out specifics that say, ‘OK, we went through all the capabilities of, say, M365 E5, and you told us you wanted to use X, Y and Z. When we look at the cloud grid, it shows that you want to leverage these technologies in year two, but you don’t own those technologies yet so you’re currently on E3 so we need to make a move to E5 in the next 12 months to align the subscription with your strategy for adopting the technology.’ … The goal is to have the clients maximize the value of their Microsoft investment and align their licensing with their strategy, with their spend, so that they’re getting the most bang for their buck.

How did clients react to the 20 percent premium on monthly commitments?

Those conversations had been customized for every client, but we’re taking the approach of it could be a situation where the client has a mix of both.

They could have a foundational group of users [where] the annual SKU makes sense—saves them some money—and then they have a pool of monthly SKUs that may go up and down over the course of the year.

Not all clients address it that way. But … leveraging that flexibility will put them in the best pricing position for what they need. … One of the values of CSP was, ‘Hey, this thing can fluctuate up and down monthly, you can go anywhere you need to go on a monthly cycle and fit your needs of the business for that point in time.’ … The annual SKU changes that value prop conversation a little bit, but we really haven’t had any clients pushing back.

We find the right blend for what they need and align the licensing accordingly.

How is Core BTS thinking about using that additional revenue?

It‘s part of our growth strategy for our CSP business. When we were planning out the year, NCE was a big part of that 2022 planning conversation.

And ultimately, the goal is to get clients where they‘re perfectly aligned—as much as you can make it perfect—and perfectly aligned with their strategy in licensing.

When you get a chance to sit down with a client, you can really talk through where they’re spending money on other technologies today versus Microsoft. And in some instances, they’re paying for things that they already own in a suite that’s available from Microsoft. You’re able to right-size some things for them and divert a little more of their overall spend into the Microsoft bucket and then give them a more complete solution. … There can be justifiable instances where a client opts to look at that best-of-breed approach across multiple vendors, and they’ve got the capacity to manage that.

Ultimately, from my perspective, I don‘t know that you ever get quite as holistic or complete of an end-to-end solution [that way].

But sometimes there are business reasons that you have to have technology X versus Microsoft because it has a feature that’s just required for your type of business or compliance or whatever.

And so they split that spend up. But where it’s applicable, we try to show the client that, ‘Hey, this is either already included in what you’re paying for or it’s a nominal increase. Why not take advantage of that and, again, get a more complete end-to-end experience?’

What was your initial reaction when first learning about NCE?

Like many partners, the initial reaction was, ‘How are we going to manage this?’

Even with the large LSP [licensing solution provider]-type partners, they’ve built in-house tools that manage their CSP subscription business. All of that, really—for the most part, I think—broke with the NCE transition and had to be rewritten, retooled. We had to do a lot of retooling ourselves internally with the platform that we use in order to manage a more complex subscription model with NCE.

As soon as it was announced, we’re heads-down, working directly with Microsoft, part of a monthly rhythm with them where they’re meeting with partners, talking about what’s going to be in the new platform, changes along the way.

The dates got pushed a few times. They introduced a price increase back in March that coincided with the NCE changes.

So we tried to back all of our clients into making a decision, pre-price increase, so that they could lock their subscription in for a year at the pre-March pricing. And the bulk of our clients opted to do that. … It was good for them. And it eased the pain of the transition into things like monthly SKUs because there were some cost savings.

Does Core BTS have any industry concentrations?

I would say from a Microsoft perspective where we’ve got the most expertise and depth is health care, retail, financial services, manufacturing, state and local government.

Do you work with a distributor?

No, we‘re a direct CSP. We chose to go that path from the very beginning. Much more complex path—as we have found—but it gives us the best ability to serve our clients the way we need to.

Some partners decided to give up direct Microsoft partnerships and use a distributor.

Yes, we absolutely had those conversations going into NCE. Does it make sense to go indirect, leverage somebody else’s platform? … Again, it’s really about providing our clients with the best experience that we can and bundling it with our managed service offerings and our consulting, project-based offerings, and more of a complete solution.

And we found that being direct just gives us the flexibility we need there.

How many employees are in Core BTS’ Microsoft practice?

Our Microsoft practice from a delivery perspective is probably just north of about 400 people. So those are architects and consultants certified, dedicated to delivering Microsoft solutions.

I imagine it’s tough to roll out changes to a partner program populated by small businesses and companies even bigger than Core BTS.

The last number I heard was over 400,000 Microsoft partners worldwide. That goes from the two guys in a pizza shop up to those global partners that have thousands of Microsoft consultants.

They have a big partner ecosystem they have to support all with a pretty wide difference in what those partners can deliver and how they deliver. So it’s complicated to address for sure. … But it’s a great time to have your business tied to Microsoft.

Any interest in other vendors?

It gets discussed. We’ve never taken the approach of looking at AWS or Google as a direct partner in that space.

The way we focused our business, Microsoft has been a great growth engine for us. Our Cisco relationship has been stellar for years. And so hitching our wagon to those two partners is providing everything our clients have needed. And a little bit of focus is a good thing for an organization.

We can double down on our expertise in those areas and truly bring a world-class solution instead of trying to be everything to everybody.

How is it going with the Microsoft Partner Capability Scores?

We’re in pretty good shape. And the shift to this new Solution Partner designation—or what they’re going to call the Cloud Partner Program—is an evolution that was probably overdue for Microsoft, frankly. … For us I won’t say it‘s a non-event, but we’re in really good shape for the October deadline when this rolls out.

I think when this goes live we‘ll be qualified for five of the six solution area designations. We’ll come out of the gate in really good shape.

But that said, we already are a Gold partner with 16 Gold competencies, five advanced specializations, Azure expert MSP. We‘ve got a lot of groundwork that’s been built over the years to put us in that position.

Partners where their focus has been more, ‘I‘ve got a Gold competency or two’ and those competencies are really more based on skilling—getting the right tests knocked out—and don’t have a depth in either delivering those solutions or have referenceable case studies on the back end, I think it’ll be more of a challenge for them.

And I think that’s why Microsoft made the change. And then talking with leadership on the partner side of the house, really part of this is to help clients easily understand what partners are qualified to deliver on a specific solution.

If a client is looking for a partner that is in app modernization, app innovation, there’s not really an easy way for them to determine by looking at competencies if a partner is really qualified. … It’s aligned more specifically to the solution areas that Microsoft has migrated to over the years as well. It’s a more holistic approach. They look at performance, skilling and customer success components versus being heavily weighted on the skill side.

Badging is useful for clients and internally?

Things like Azure Expert MSP, having that tagged on to collateral and our website and talking about it with clients and what that means, that carries some weight.

What’s your message for Microsoft’s new channel leadership?

To be honest, the evolution of the Microsoft partner program over the last few years … has been very positive. They expect a lot of partners, but we have built our business in the Microsoft ecosystem and are very well-aligned with Microsoft. So it’s beneficial to us to be that way. … I can’t say I‘ve got any real fundamental complaints, honestly, about being a Microsoft partner.

Have NCE and the Partner Capability Score made you think Microsoft doesn’t value the channel?

No. They have invested in resources like the whole CSU community—the customer success unit.

We’ve got customer success managers and architects. They’re working directly one-on-one with clients. But we’ve learned how to embrace that and work with them over the last few years.

And quite frankly, that CSU now is probably our primary engagement point when we’re working with a client.

They’ll take the opportunity so far and pull us in, or we’ll take the opportunity so far and pull them in and work hand in hand.

But some partners view them as almost running their own game. And they don’t get integrated with their motion, and there’s conflict.

What work with customers is taking up your time nowadays?

You start to look at it from an infrastructure versus app innovation or app modernization perspective when it comes to Azure. ...

So we’re seeing a lot of traction around app innovation and data. So working with clients to move their data estate into the cloud and move the apps that leverage that data into the cloud and then present all that back, leveraging Azure.

For us, that’s an area of significant growth and a lot of interest. And so we’re trying to make sure that our organization is aligned and ready for that groundswell of activity when it comes to apps and data in the cloud.

Zac Paulson, CEO


Fargo, N.D.

How have the NCE changes been going?

NCE’s been going pretty well. It hasn’t been too much of a challenge for us, which has been nice. And we’re making progress. … It’s been a little bit of a learning curve along the way. But other than that, I mean, it’s not the end of the world. So that‘s good.

In terms of … the pricing changes, people are still a little bit confused, no matter how you tell them. So we’ve had to build quotes for everybody, of course, and those types of things.

Have more of your customers gravitated to a monthly or annual commitment?

Most of our customers that are fairly stable in their employee counts are doing the annual with the monthly payment. Once they see that, they’re opting for that.

Occasionally, we’ve got some customers that are mixed where they want to have that flexibility. I’m rounding the numbers, but 80 percent annual and then 20 percent [monthly], giving them the ability to have that flexibility. So it’s been as the customer’s fit makes sense.

Do you think the inflationary environment helped?

I would say the inflationary environment definitely did help. There’s no question the whole world is going up in price. So people are just like, ‘It is what it is.’

Do you feel differently about NCE today than back in the fall?

The timing still [was not good]. Microsoft picked a bad time, the world did not have time to handle this, specifically the IT world. And so,I wish they would have picked a time when the rest of the world wasn’t exploding. But you know, I get it. They probably had this change in the works for a long time and eventually it just had to happen. But yes, that part’s frustrating.

What caused most of the stress for you and your team during the rollout?

We’re having to quote something we’ve already sold. So you’re having to explain something to clients you are already collecting revenue on. You didn’t expect to have to go back and resell them on these things. So that part’s incredibly frustrating. We didn’t need that. … We actually are reselling. I mean, that’s essentially what’s happening. So yes, that part is kind of frustrating. We didn’t need more to do.

How are things going with the Partner Capability Score?

That is a disaster, in my opinion. The main reason is we‘re very well-versed in Dynamics, we do a ton of work in Dynamics, and we’re scoring a four. That shows me something’s broken.

There could be a delay to the October Partner Capability Score deadline.

I would like to see them give us, A, longer than October, and then B, make these things a little more reasonable.

One of the things that is probably the most frustrating with Dynamics is in order to get the designation we had before, we would have had to have 20 trained professionals because you couldn’t have the certifications just in a few things. You had to have the certifications across the board. And that’s just, again, not rational, not rational at all.

Could Microsoft have done more communicating about these changes?

In fairness, there was so much going on with NCE that there were almost too many things to tackle at one time.

Even if they were alarmist, we’re in the middle of trying to figure out probably one of the most complicated purchasing changes ever. … These two things at once are a terrible combination.

What work are you doing lately for customers?

Dynamics has blown up. The demand is increasing for Dynamics. We’re seeing a lot of that.

And it‘s customer-driven. So it’s the customer asking to be in Dynamics, which is kind of neat. It goes to show that whatever Microsoft is doing is driving that demand. Marketing and awareness.

And the other one’s not going to surprise you at all—security is exploding. Not only are we seeing a request for more security, but we’re also seeing that compromises and ransomware and those types of things are increasing. … We have a cybersecurity practice, but it’s constantly evolving, and we’re adding to it on a regular basis. So we’ve rolled out two new products and have plans to roll out multiple more in this year alone.

How big is TrueIT?

We’re still about 50 people total across the two organizations. The MSP is about 20 and the Dynamics practice is about 30.

Are you moving customers off other CRMs to Dynamics?

For us, most of our customers are coming from the avenue of whatever they had before they have outgrown or it’s not meeting their needs.

We are very rarely switching [customers] from Salesforce or a NetSuite to Dynamics. If we’ve done that in the past it’s usually been that they’ve had a failed implementation—whether it failed because they didn’t buy into it originally or it failed because they weren’t using it effectively. … I think they’re seeing, when you would bring a Microsoft solution to the table and they’re like, ‘Well, we’re already heavily invested in Microsoft.’ That definitely is a motivator for them. Customers understand that a stack makes sense, has efficiencies that you don’t always have with disparate products.

Have you looked at Google’s partner program because of issues with NCE?

No, not at all. I mean, at this point, we haven’t looked at Google. And even though Pax8 has rolled out AWS, we haven’t looked at AWS.

There’s just so much more capacity left in Azure and in O365 [Office 365] that we still are on-boarding clients that don’t have O365, believe it or not. They exist out there. It is very ubiquitous so you’re going to find customers that are advanced in technology that will have had it.

But then, for every one of those, you’re going to find somebody every now and then that just never implemented it. It’s crazy.

Did NCE bring in more revenue for TrueIT?

It has resulted in a little extra revenue, and it’s also resulted in right-sizing the clients to the correct plans they needed to be on.

We’re not blowing up—a few $1,000 a month in revenue, and then a few $100 a month in margin. … But I would say the trade was not fair. … It hasn’t been as big of a loss as predicted, so that part’s been nice.

Bobby Guerra, CEO


Jacksonville, Fla.

How is the adoption of NCE going for you?

The clients have gotten the understanding that the change has happened, so these are now the lukewarm waters that they’re used to swimming in. Before it was you’re dipping your toe into the hot tub. So they’ve gotten used to it.

But the one problem that we’ve had that has had an impact in efficiency for us is for those users or those companies who wanted to stay NCE monthly, you cannot change them in the middle of the month. There’s no pro-rating. … Nobody has given me answers on that, whether that’s from a Pax8 or Microsoft. Just the fact remains that f you call up and you’re like, ‘Hey Bobby, I know Sally Jo just left today. She’s no longer with the company anymore. We want to shut her down.’

OK, great. We‘ll go in and disable her 365 account. But I can’t even go into the Pax8 portal and do that. I’ve got to schedule a reminder to happen on the monthly anniversary date of that. … But what’s happened is a lot more people switched to one of the plans, which we were not expecting. We didn’t think many people would.

I’d say probably about 60 [percent], 70 percent of our clients went to some type of annual subscription [from a month-to-month commitment, which would have come with a 20 percent premium].

What was the split for your customers paying the annual commitment once a month or once a year?

That surprised us. I would say it was probably maybe 60-40 for the monthly.

But we balanced it by charging more than what the MSRP was for the monthly because we’re on the hook [if the customer decides to forgo a license before the end of the annual commitment, the partner still has to pay for the license for the duration of the commitment]’ … We don’t currently have any relationships with any clients that are of such a size that we would be worried about carrying the bill for it.

What have you liked about Pax8’s offerings during the NCE rollout?

They‘ve done training for us. … They’re the most inexpensive license charge out there. ...

And the biggest reason why we stick with Pax8 is I have an account manager that is extremely responsible that I can talk with.

What would you say to yourself back in the fall when you were first learning about NCE?

I would say, and this might sound surprising, it was a lot more profitable for us than we thought it was going to be. I was surprised. It was a lot more profitable because so many went for the monthlies.

It would not be as bad if we knew the strategies and the right approach to handle this. And we didn’t get any of that guidance. It was everybody in the community on our side for managed service companies just coming up with alternative ways of approaching this nut to crack. ...

How did you meet these peers?

That was a Pax8 peer group of probably 10 different managed service providers.

Plus, I’m part of Taylor Business Group, which is another managed service provider company. So I talked with probably 10 or 12-plus other people. … I asked them how they were doing stuff. And so it was just grassroots, talking with people.

What was a helpful strategy when talking to customers about any upcoming changes?

It was structuring the offerings as far as, ‘How do you do it? How are you going to mitigate the risk? What is your risk?’

So we had to sit down and we had to look at how much would I be on the hook for? And then what are we talking about, how much are we making?

So we had to do the numbers to see if it was worth it, and then we said, ‘OK, well, we need to charge more.’ And then we said, ‘OK, we‘re going to charge more for doing the monthly plan. … We charged a few extra points for people that went monthly annually because that’s where the risk is.

And then we carry the savings over as best as we could for people that paid for up front for the year.

And then we just had others who wanted to go monthly. And then what we had to do is try to figure out a way to be as fiscally responsible for the clients because not all clients are going to want to commit fully.

So that means a hybrid, that means some are going to go for an annual and some are going to just stay purely monthly so they have the ability to fluctuate. I would say probably a quarter of our clients utilized that option, but we had to sit down and wrap our heads around all these possibilities and present what we felt were the most feasible and reasonable approaches for the client and let them choose from the menu of options and have those conversations. And there were so many conversations that we had to have.

It took a lot of time to do all that. But once we got past that, it was fine. But the biggest rub that we‘ve had … transitioning licenses is just a real pain still.

Do you have a message for the new Microsoft channel leadership?

Give us the ability to sell your products a lot more easilu. And make it to where we can do what we need to for them because we‘re out there preaching the good news. Don’t make it hard. … The reality is, I think the outcome was what Microsoft wanted. They had a massive uptick of yearly commitments.

For us, that’s what we saw. I was shocked at how many people committed for the [annual commitment]. I thought they were just going to stay monthly. But it was a large share of them. I’ve talked with other people, and they’ve seen various levels of agreement with that. Some have said, ‘No.’ But in general, most of the managed service providers I’ve talked to have seen that same trend. … We saw a majority of our clients switch to some type of annual commitment, whether it be monthly annual or just straight up paid for the whole thing up front to get the most amount of savings.

We saw a majority, 80 percent of them, at least do part of their business practice that way. … I would say to the person coming in that anything they can do to bring down those barriers that we have currently standing with NCE is going to make life a lot easier.

We need the flexibility to move between products in both ways, either up or down in licenses. They’re OK if you want to move up, if I want to go from E3 to E5, they’ll let me do that. But not from [E]5 to [E]3 or turn an [E]5 off completely.

Do you have clients in a variety of industries?

All over. Construction, lawyers, doctors. Anything.

How are things going with achieving the new Partner Capability Score?

We‘re at about 40 out of 70, and we’re hoping that we‘ll get a little bit more margin growth with a few new clients.

The biggest problem is they need to have less new client requirements, they need to focus on growth, like encouraging us to grow our business with our clients.

Give us incentives to have people use more Teams, more OneDrive, more licenses, more everything. That’s where it should be.

And then I think the education piece is important. Forcing people to get certifications, I like that.

Are new certifications part of your road map to crossing that 70-point threshold?

One hundred percent. We did not have any of the certifications that they required.

If the desired effect is to get more people trained and educated in their product, they’re going to check the box. … In the past, I always looked at these certifications as that’s the employee’s own personal growth. And that’s on them to do when they want it. But now that it’s being tied to whether or not I’m going to get my renewal, that’s a different story.

I talked to my service manager today. I was like, ‘Look, I think we‘re going to need to take at least one hour or two for both of the engineers that we’ve allocated for those courses. I would start pushing them … set up specific times in the mornings, maybe have them come in at 8, 8:30, and we‘ll split the difference … We’re going to run interference so you don’t have to worry about getting any calls or any requests during that time frame. Do additional studying.

How are you going to invest the extra revenue made from the NCE changes?

We’re taking it from the perspective of we need to be cautious about the fact that we still have risk, so we can’t ignore that.

So we’re taking that money and we’re saving it with the assumption that we might utilize it for training or other pieces. But we’re banking that for right now because I want to see how the year goes. … You’ve got a situation where we’re going to float some of that cash.

So when that yearly [commitment] comes through, I’ve got now an opportunity because I know that’s going to happen so we can say, ‘Hey, Mr. and Mrs. Client, you need to pay us now. Today is June, and your [term ends] in October. So sometime between now and October, you need to come up with the cash for this next year.’

So we now have time to kind of start those discussions before their anniversary is up. But that’s on us to make sure we remember that. No one’s going to sit down and say, ‘Bobby, let me have this conversation with you, make sure you remember to talk to so and so about it.’

If we forget, then that’s on us and we’re going to have to possibly just carry it.

How many employees do you have?


What’s the main work clients are asking for right now?

Because of the fact that Microsoft has moved into this space by just challenging us with how things are, the traditional MSP model is not as viable as it used to be.

So a managed service company needs to differentiate themselves from just a normal managed service provider. Those companies that are just like, ‘Hey, I‘m going to provide you [Microsoft] Office, I’m going to help move your machine, I’m going to set up your workstations’ in the next five years, I just feel like they’re going to be more of a commodity and there’s just not going to be as much value that’s going to be brought to them. And it’s going to be harder and harder to make money in that space.

As other vendors and people are trying to drive costs by monthly recurring revenues, everybody’s coming at you, like, ‘Can you open your wallet, I want to get a piece of that action.’ And it’s just getting a lot harder with those margins and inflation to make money.

So for us, where we feel that the smart play is—and this isn‘t really that smart, a lot of people are saying this—is the security space.

Some people are like, ‘Oh, you‘re gonna be an MSSP’?’ No. That’s not what we want to do. I love providing managed services to our clients. And we don’t want to not do that. But we just want to differentiate ourselves between someone else that does.

With all the frustrations with Microsoft, has it made you look at Google’s partner program?

We‘re definitely Microsoft, but we’re doing a video series on translating the differences between Microsoft and Google. So we just actually recorded it today, our first one, where we‘re comparing OneDrive and Google Drive and SharePoint and their shared drives that they have. … We’re going to create this content and start to start building up the knowledge inside my staff using this. I want to be able to switch hit whenever we want.

Robby Hill, CEO

HillSouth IT Solutions

Florence, S.C.

How is your adoption of NCE going?

We are totally up and running with NCE. I want to give a lot of credit to our distributor Ingram Micro for partnering with Microsoft, of course, but providing a lot of value add as far as information, advice and helping us message this to our end users long before the implementation date.

Knock on wood, we don’t have any end users who were caught off-guard because we had plenty of time to message them up front.

This is obviously the first year but we’re optimistic about how it’s going to really help the partners, at the end of the day, because I think by handcuffing those end users to the partners, we all get to work together a little bit more in case there are any hiccups in the relationship where basically we’re stuck with each other. … At first I was very worried about it. … And then, somewhat unique to my practice is we have a really large base of nonprofit users. And as far as we can tell, they have not been forced to migrate to NCE. … So that has helped us with our implementation because we get to focus all of our attention on the corporate users.

How was Ingram Micro helpful?

In a time of a major change like this, your distributor can either step up to the plate and lead the way with resources or they can be part of the problem of making this big transition. And we were very happy that ours was a leader. … For example, we on-boarded a big corporate account earlier this year. And our distributor was vital to winning the business, on-boarding the business and then now maintaining it by helping make sure we had all the resources we needed, including the best pricing.

Has the new Partner Capability Score made you revisit the benefits of Gold and Silver?

Our MPN [Microsoft Partner Network] renewal is worth it because of the NFR [not-for-resale, also known as internal use rights, or IUR] licenses.

Have you looked at Google’s partner program?

No. We try to pull people off Google. It’s unfortunate, but Google just doesn’t have a competitive product. And I think in this cloud, communications space, Microsoft really took the downtime during COVID and invested in their product.

They’ve got a product suite here for communications and collaboration that is, frankly, unparalleled to anyone on the market and, basically, it’s priced right.

What made you so concerned when NCE was first announced?

We were concerned about end-user pushback mainly. One thing, maybe, that helped Microsoft during this transition was the fact that you have record nationwide inflation.

Do you have a message for the new channel leadership at Microsoft?

Microsoft needs to continue to invest in their products. I want to see Microsoft’s security portfolio continue to evolve and become competitive, and I think that’ll create great opportunities for the Microsoft partners because —as every partner knows —security is the future of our industry, if not the present.

What is HillSouth investing in to grow the business?

We were rather early adopters of the SIEM [security information and event management] space, but that‘s not enough.

And so, 2022 for us is really diving hard into the XDR [extended detection and response] type of opportunities, just basically saying, ‘This is your base level here. This is where we need to be at a base level.

And while the cost is higher than, perhaps, people have thought of in the past, that‘s basically your base level.

You’ve got to spot these bad actors earlier and earlier so you have a chance to mitigate the damages. Having Microsoft in that space is not a bad thing.

Are your customers in a variety of industries?

Health care is two-thirds of our verticals. … [We have] 21 employees.