Office 365 & Cloud Billing: Microsoft Is Listening to Partners

By samdizzy

Jon Roskill 3

Our conversation covered numerous topics: The Microsoft Partner Network partner program; momentum with cloud, virtualization and CRM; and Windows Azure appliances for MSPs. But for the sake of this blog entry let’s focus on cloud and SaaS billing.

The situation: Some (but not all) Microsoft channel partners want to manage SaaS and cloud billing to end customers. Microsoft has stated that there are technical and business challenges that prevent such an offering. But I don’t buy that statement since Google Apps already offers partners the option to bill SaaS and cloud customers, Google has confirmed.

New Developments

Still, Roskill made it clear that he and the Microsoft channel team are listening closely to the billing debate and some changes are coming.

For starters, Microsoft is working with Parallels on a so-called syndication strategy. The effort allows really large service providers to manage end-customer SaaS billing.(Parallels discussed the syndication strategy in this TalkinCloud FastChat video, and I suspect we’ll hear more at the Parallels Summit in February 2011. Meanwhile, Roskill hinted that the large service providers (potentially telcos?) may offer similar end-customer billing capabilities to channel partners.

Microsoft’s large hosting partners are also offering partner billing options. I know Rackspace offers end-customer billing to channel partners, and we’ll be watching to see if Rackspace extends that capability to more and more Microsoft-hosted applications. Also, Microsoft service provider partners like Intermedia continue to offer white label branding and billing services for Exchange and SharePoint  to partners.

Balancing Priorities?

Still, I have a conspiracy theory. I think Microsoft wants to offer channel partners cloud and SaaS billing priorities. But short-term, the bigger priority is making sure the Office 365 rollout goes as smoothly as possible in as many countries as possible sometime this year. Office 365 is the forthcoming successor to Microsoft BPOS (Business Productivity Online Suite), combining Exchange Online, SharePoint Online, Lync and more with cloud-centric versions of Office.

I shared my conspiracy theory with Roskill. He reaffirmed that Microsoft is listening to feedback and he stated that “we’re always looking at different billing options, In 2011 you will see other things from us put into pilot.” He also mentioned that the top priority is “getting office 365 out in as many countries and languages as we can.” That effort involves engineering resources and trade-offs in terms of what Microsoft can develop, Roskill hinted.

Bottom line: Roskill didn’t confirm or deny my conspiracy theory. But I think he’s taking the billing feedback seriously, even if it’s a minority of partners who are asking for the capability. He added, “For us to do it, it means setting up billing infrastructure that’s quite complicated.”

Roskill says there’s also a flip-side to the debate. Some partners view end-customer cloud billing as something akin to telephone and electric billing. Some VARs would never expect to offer those types of billing services, nor would they want to, he added.

I’m sticking to my own hunch: I think Microsoft will eventually offer small cloud partners the option to bill end customers, but first the company needs to successfully deliver Office 365.

More Momentum

Meanwhile, Roskill points to multiple cloud successes in recent months. For instance, more than 5,000 partners have signed up for the Cloud Essentials initiative, and a few hundred have signed up for Cloud Accelerate. Cloud Essentials and Cloud Accelerate attempt to inspire and reward partners that make a deep commitment to cloud computing.

Plus, partners are discovering that they are empowered to manage and administer cloud settings for end-customers. Specifically, with customer approval, partners can make adds, moves and changes to a customer’s Exchange Online and SharePoint Online deployments, Roskill notes.

As I mentioned, Roskill covered dozens of additional points with me. Each of our websites will be back later with more extensive reports.

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