Getting Started in the CSP Business — A Comprehensive, Quick-Start Guide
The Microsoft CSP Program: a booming opportunity
Historically, corporate IT strategies were straightforward: buy the hardware and software, and manage it on-premises. But the cloud has swept that world away — at breathtaking speed. It seems like yesterday when companies were ‘getting ready’ for the cloud — today, they’ve likely moved whole swathes of their business into it. The cloud has taken center stage as the motor of digital transformation, something only accelerated by the Covid crisis. Companies that aren’t adapting are being rapidly left behind. Today, annual cloud investment tops €250bn directly, and €500bn more widely. Average annual growth is over 20%, outstripping old-style IT spending sixfold, with double-digit growth across every world region.
Launched, in 2015, the Microsoft Cloud Solution Provider Program (CSP) taps into this seismic shift. The program has grown exponentially, attracting over 90,000 participating companies. IDC predicts that, by 2024, Microsoft’s partners will be generating a staggering $1.2tr in revenue. The program is a licensing-based model that enables companies to create and deliver their own differentiated offers to customers, to earn recurring revenue. They can sell the Microsoft cloud portfolio, third-party solutions from its marketplace, and their own value-added solutions. Any company, anywhere in the world, can become a partner.
Why you should consider the Microsoft CSP Program
The rate of growth is high, but there are plenty of opportunities for providers who want to move over to the cloud and a subscription-based model. And the Microsoft CSP program doesn’t just offer access to a new market: its fundamental design also has several key advantages, including:
- Customer lifecycle ownership: CSP partners play a much more active role in the customer journey, pre- and post-sales, developing and embedding deeper customer loyalty. The post-sales opportunities from the ongoing revenue that comes with the renewal of CSP licenses, and uncovering further needs, are vast.
- Upselling and cross-selling: The strong customer relationships the model drives foster the sales of more and different Microsoft CSP licenses. Many partners also forge strategic partnerships, helping customers deliver their IT roadmaps and securing high-value accounts in the process. You might start by providing Office365 E3, but later expand this to include SharePoint, EMS, and Skype — and then add Azure, and Power BI too.
- IP Acceleration: As you get to know your customers’ needs, the CSP stack becomes a launch pad to add your own services and software IP, like managed security, disaster recovery, or consulting services.
- Agile provisioning and billing: The model is inherently agile. Both partners and customers can manage CSP provisioning — adjusting it as needed. This is mirrored in a single, automated, bill, that can reflect service changes in real-time. Monthly or quarterly billing makes administration easy and provides regular touchpoints to deepen relationships and drive revenue.
- A flexible partnership model: There are both direct provider and indirect reseller options. The choice that best suits you (see below) will depend on how much you prefer to invest, and the level of commitment you want. Indirect resellers can still sell all Microsoft’s cloud solutions, but partner with a Microsoft distributor to access more costly infrastructure and support services.
What can you sell as a CSP partner?
- Microsoft 365 and Office 365: Sell the established Office suite or bundle it with email, cloud storage, streamlining tools, advanced analytics, and security.
- Dynamics 365: Customer relationship management (CRM) and enterprise resource planning (ERP) applications that deepen customer relations and optimize their operations.
- Windows 10 Enterprise: The enterprise version of Microsoft’s latest operating system.
- Microsoft Enterprise Mobility and Security (EMS): An intelligent mobility management/security platform.
- Microsoft Azure: A build and deployment tool for IT projects, with new, integrated features constantly being added. It covers operating systems, development tools, business analytics, servers, storage, and networking security.
You will also be able to develop solid revenue streams from selling perpetual software licenses and your own value-added services.
Direct and Indirect CSP providers: What’s the difference?
Direct CSP providers buy and sell products and services directly from Microsoft. Indirect resellers can offer the same solutions, but use the services of an established distributor — called an indirect provider — as an intermediary. All partners start as indirect resellers, and the decision on whether to go direct depends on your annual CSP revenue, how much you want to invest, and your commitment to meeting Microsoft’s direct-provider requirements.
Becoming a direct provider can take several months and has some rigorous hurdles, including:
- Cloud business size: You’ll need to already be generating $300k in annual recurring revenue as an indirect reseller.
- Billing and provisioning: You need the infrastructure in place to handle any type of customer transaction.
- Customer support: You must offer 24/7 customer support, via an Advanced or Premier Microsoft Support Plan — minimum investment of $15k.
If you choose to stay indirect, you can still sell all the same Microsoft solutions as a direct provider, you’ll just leverage the know-how, investments, and support of an established indirect provider, who acts as an intermediary with Microsoft. Both types can choose the margins they set and offer their own value-added services around the CSP stack. These investment differences are also reflected in returns: both earn the full margin on value-added services, but indirect resellers share some of the CSP margins with their indirect provider.
Which model is best for you?
Being a direct provider can be attractive, but you’ll need to weigh that against the investment and commitment involved. The right choice will depend on your long-term strategy. The minimum annual recurring revenue (ARR) to become a direct provider is $300k, but many partners prefer to achieve higher ARRs, before making the switch — to gain the right return on their support and billing/provisioning investments.
Providers may also stay indirect to focus more on value-added opportunities. For example, if you offer a niche Azure app, but have never migrated customers from other platforms onto Azure, working with a distributor enables you to offer this quickly, unlocking your app’s potential. Joining the CSP program is easy: just follow the steps on the Microsoft Partner Membership page.
Why you need a Cloud Automation Platform
While conceptually simple, growing a profitable cloud business involves much more than just joining Microsoft’s supply chain. The best CSPs differentiate themselves as hassle-free, trusted advisors — who partner their customers long term. So how do they do this? They usually have three things in common:
- They put customers in control, unlocking the cloud’s power: The cloud offers unprecedented IT flexibility. Solutions can be tailored and added at will. But sometimes, the speed of communications between customers and CSPs waters down this key benefit. By investing in a platform that can automatically scale services — instantly — successful CSPs empower their customers and unlock the cloud’s full flexibility.
- Crystal-clear billing, with no surprises: Low capital outlay is a key benefit of cloud solutions, but use-based billing can also deliver nasty surprises, as customers scale up. Tracking and invoicing across a myriad of cloud services can be daunting too. Successful CSPs solve this through an automated billing platform. As well as better customer service, the pin-point accuracy it provides enables customers to scale up their cloud usage with confidence.
- Seamless integration with customers’ IT environments: Customers invariably have their own environments that they want to retain on-premises. CSP provision works best when seamlessly integrated with these. This means a platform that offers data synchronization and APIs that can link cloud services to applications with minimal effort.
What the interworks.cloud platform can offer you
The interworks.cloud platform offers these three key differentiators and more. It provides everything you’ll need to access the lucrative opportunities of the Microsoft CSP program, including:
- A one-stop CSP automation solution: From customer and reseller self-registration on your branded marketplace, to recurring billing, automated provisioning, CRM, ticketing, reporting, and more.
- Accurate, automated billing: Easily create billing rules for even the most complex scenarios. Use it for credit control, free first billing periods, reconciliation with Microsoft, utilization-based billing, multiple charging types, and much more.
- Automated provisioning: Rapidly set up and sell cloud services to your resellers and customers, with automated delivery and on-demand ordering. Provision any service, from any cloud — and save time by using pre-made provisioning automations.
- Zero time to market: Get up-and-running in a matter of days with interworks.cloud’s Customer Success Playbook and personalized support. Use our auto-updating and pre-populated catalog to get ahead of the competition and start selling immediately.
An interesting opportunity?
Learn more about how interworks.cloud can help you get started here.
Already convinced? Book a demo and let us show you how the award-winning interworks.cloud platform can make your journey to being a successful CSP partner easy.