The Microsoft Cloud Solution Provider (CSP) program offers Microsoft Dynamics partners fantastic new opportunities. These opportunities are even bigger for partners who target SMB’s.

To understand the opportunities CSP offers Microsoft Dynamics partners, it is good to look at its origin. It all started when Microsoft teamed up with Telco-Operators to work on a program called ‘Syndication’. This was when the predecessor of Office 365, Business Productivity Online Solution (BPOS, what a wonderful name) launched.

Microsoft wanted to make sure that operators, who sold internet access to end customers, could bundle that access with the online versions of Exchange and Sharepoint and sell it as one package. That way end customers didn’t know how much of their monthly fee was used for pure internet access, additional services and software solutions such as Exchange. It provided opportunity to “hide” margin within the various packages.

While Operators found it hard to sell BPOS in the first place, more and more companies got interested in the idea of selling Microsoft Online Services integrated in their own offering. Yet Microsoft needed to onboard each of the Syndication Partner manually, which was extremely resource intensive. So it became clear that in order let BPOS succeed, Microsoft needed to provide a scalable platform, which then led to the Cloud Solution Provider Program (or Project Artemis as it was called back then).

The biggest benefit of the Microsoft CSP program

At first glance, you might say that CSP is another licensing option, tailored for online services, which is true. But then it is also a transactional platform for resellers and wholesalers alike. Having a platform that enables partners to have automated provisioning and billing of Microsoft online services is a critical element of Microsoft’s cloud transformation agenda.

However, the biggest benefit of CSP as a platform comes from the opportunity to allow partners around the globe to integrate Microsoft cloud services in their own offerings. More and more, the line of business decides which IT solutions are being used and not the IT department. This means that more and more, decision makers want to get pay-as-you-go models that have one price for entire solutions in very predictable way. This can be achieved by creating your own products that consist of Microsoft online services, third party solutions, your own services – online or classical – which are offered in a by-user, by-month framework.

Cloud opportunities, especially for SMB

The opportunities CSP creates are especially true for SMB’s. In the traditional Business Application space, solutions were defined as being projects. Typically with high upfront costs and then maintenance. In the new cloud economy, these solutions should become easy to deploy packages that can be sold at scale to SMB’s. SMB’s typically accept standards more easily than enterprise customers, which is why market research predicts that SMB’s will consume public cloud services faster than their enterprise counterparts. This opens a fantastic opportunity for Dynamics partners, creating packages around industry expertise or business processes that can include Microsoft cloud services, other ISV solutions and their own IP and services. We are seeing great examples right now, like Tempero from Netherlands, Cloud2020 from United Kingdom or OneBizz which is actually part of QBS group.

How to become a CSP partner

Before you can actually create and transact CSP offerings, you need to become part of the CSP program with Microsoft. To do that you have two options: you can become a direct CSP or a CSP reseller. (Read also: What is the Microsoft CSP Program) As a direct CSP you have to make a large investment to set up the automated billing and provisioning platform. The full advantage of the CSP platform comes from the automation, for example you or customer can add or cancel seats of your cloud solution package directly and the billing and provisioning will be adjusted automatically. Microsoft estimates that this can cost you more than € 375.000,-. Arguably if you only have a handful of customers, you can continue to invoice manually on a monthly basis. But as soon as you have more than 20 customers, the cost of keeping up with changes will eat into your profitability big time, thus increasing your need for automation.

Become a CSP reseller

But you can also become a CSP reseller. In that scenario a cloud aggregator such as QBS group would provide the heavy lifting in terms of the automation platform, while you can focus on creating and selling your packaged offerings. There are some costs involved, the margins you receive on the Microsoft public cloud offerings are slightly smaller. But these costs are small compared to the all up margin you can make with cloud service packages you create. In fact Microsoft calculation suggest that only after two years and more than 500 customer you might be getting break even on your own CSP investment versus becoming a CSP reseller within the QBS network.

Getting started with CSP Program.

I strongly believe we are just getting started with packaged cloud services. At QBS group we have invested heavily in our platform to provide automated billing and provisioning for our partners. We also offer them a portfolio of third party solutions and cloud solutions (such as OneBizz) that they can integrate into your own cloud services packages.

The easiest way to benefit from the Cloud Solution Provider Program opportunity is to sell an anchor service to your installed base.

The easiest way to benefit from the Cloud Solution Provider Program opportunity is to sell an anchor service to your installed base. In most cases, that will be Office 365. If you combine it with OneBizz 365 and add your own services, you have made the first important step, creating your cloud service product. We at QBS are eager to support you in this step. If you think this is worth investigating, then please contact QBS group.

Want to get in touch with me personally?
Send an email to mhartmann@qbsgroup.com

DIRECTIONS is the annual event for Microsoft Dynamics NAV partners. This event is owned and organized by NAV partners for NAV partners. And that makes it pretty different from typical Microsoft events like WPC! Being a Dynamics NAV partner in todays’ market is like dancing on a volcano. And the recent announcement of the new Dynamics 365 solution will make this effect even stronger!

There are two editions of DIRECTIONS. The US edition took place on September 25th till 28th in Chandler, Arizona. The EMEA edition picked Prague as their 2016 location and will be organized from October 12th till 14th. Both editions will book an all-time high partner registration. The organization committee’s reported that they’ve registered over 700 partners for the US edition and no less than over 1,400 partners for Prague. This last number is expected to increase to over 1,700!
This article aims to give you an overview on what Dynamics NAV partners can expect of the EMEA events. And where they should put their focus on regarding the sessions.

• To start with – Dynamics NAV is making a great revival these days. Only a few years ago there were questions regarding Microsoft’s commitment to NAV. In those days, many Microsoft people considered Dynamics AX as their favorite solution. This uncertainty of course had an impact on the atmosphere in the NAV channel. Over the last two years, however, this has completely changed. Dynamics NAV is back again! There is an impressive stream of innovations and new energy on the R&D front since Marko Perisic runs that important domain. The number of NAV customers keeps growing, and NAV is an important cornerstone of Dynamics 365 via “Project Madeira”. And Microsoft recently recruited about 100 extra NAV developers in Denmark.

• Directions EMEA is the event where Microsoft will launch Dynamics NAV 2017. At the same event, Microsoft will also launch her brand new Dynamics 365 Business Edition Financials solution (formerly known as “Project Madeira”) for the first four European markets. The agenda offers all kind of functional and technical sessions for both solutions. So these two messages will create an interesting attention split.

• According to Microsoft, all Dynamics NAV partners need to transform their businesses in order to stay relevant. However, many partners have not started this process at all! Paul White, worldwide general manager for NAV, predicted during WPC 2016 this summer that only 20 percent of the NAV partner community will eventually make this transition. So partners who have not started yet should really focus on the sessions that can help them to transform as soon as possible!

• In order to be successful in the Cloud First world, NAV partners have to expand their ERP-only based portfolio with solutions like Dynamics CRM, Office 365, Power BI, Flow and Cortana. On top of that they need to differentiate their offerings more than ever before. And finally, they need to market, sell, deliver and support digitally. These are all huge changes for the majority of the partner channel. So it makes sense to attend the specific sessions on these topics as well.

• Rather than just focusing on the functions and features of Dynamics 365, partners should also pay attention to the business side of this new solution. What does it take to make a success out of Dynamics 365? Are NAV partners able to sell it? And if so, what changes must the average NAV partner make in order to become successful?

• Marketing, selling, implementing and supporting Dynamics 365 demands for a different approach compared with traditional Dynamics NAV projects. In order to be successful, most partners will need to see Dynamics 365 as a whole new chapter in their businesses. With less license margin, smaller services revenues and cheaper delivery people with a different mindset. Partners should look at this event for guidance on how to organize and plan on these challenges.

• Dynamics 365 will not be part of the Microsoft Dynamics pricelist. Instead, this new solution will only be sold via the CSP model – the Cloud Service Provider program. Partners have a choice between becoming CSP themselves (so called ‘Direct’ model) or work together with a Value Added Distributor (‘Indirect’). Dynamics NAV partners should definitely not leave the event before they have a good understanding of these programs and an idea for their best future choice.

• Extensions are the way to go for both Dynamics NAV and Dynamics 365 partners. As an illustration, Marko Perisic stated at WPC 2016: “The answer is extensions – so what exactly is your question?” Microsoft announced that it will release a new and much better version of Extensions at Directions. Due to the crucial role that Extensions will play in the near future, it’s very important for any partner visiting Directions to pay special attention to this topic.

• The focus on Dynamics 365 could also strike prospective buyer as having negative side effects. Especially with the announced phased introduction. It will be interesting to see what ideas Microsoft will introduce to avoid this.

• Starting in FY17 we’ve seen lots of personnel changes and also new people in many local Microsoft teams. It is interesting to note that most of them don’t have Dynamics in their job titles anymore, but the new term BizApps. Is that a possible start of a re-branding?

• For the first time the organization developed conference paths to make it easier for partners to find the right content. And to avoid content overlap. These paths have a role orientation for the US edition and more a product orientation for the EMEA edition. There is a reason for the careful organization: the EMEA edition contains of 145 sessions, roundtables and workshops. And the expo hall is completely sold out with 60 booths. The US edition tops that with 161 sessions!

• Now that Microsoft has decided to finally integrate her different workloads into the new Dynamics 365 offering, the question comes up of what this all means for single product oriented events like DIRECTIONS and eXtreme (Dynamics CRM). Should they integrate as well? Partners can expect some indications on the future of these events.

See you in Prague!

Guus Krabbenborg