Tuesday, September 6, 2016

Office 365 Advisor/Direct incentive changes coming

If you are NOT an IT reseller who makes money from being the ‘Partner of Record (POR)’ then you can safely ignore this article. However, if you are indeed a Microsoft partner who generates an important amount of income to your business from being an Online Services Advisor (OSA) then you should read on because you might get a bit of a shock.

I have always discouraged resellers from placing too much focus on the rebates they received from Microsoft from just selling Office 365. The main reason is that it takes away the focus from the new model of adding value to the old model of just reselling. As I forecast, now that Office 365 is gaining wider adoption the emphasis is shifting from actually selling Office 365 to implementing it. This also means that incentives are also shifting in that direction.

There are going to be major changes to the O365 Online Service Advisor (OSA) commissions model after 1 Oct 2016. In summary (from what I can determine), the major points are:

1. Partner needs a minimum silver competency in cloud productivity to claim incentives after October 1 2016.

2. Commissions will be based on product usage not licence count. The incentive is calculated based on Online Services Usage Rate Card value of eligible Office 365, EMS, Microsoft Intune and other SKUs. The commission rate will be 10%.

3. Sell only commissions will drop to 3% until 1st July 2017 on existing managed tenants acquired prior to 1 Oct 2016. After 30th June 2017 no more manage only commissions will be paid on any tenant.

4. Sell only commissions will be 0% for all tenants acquired after 1 Oct 2016.




If you are not on CSP already you really need to make the shift along with your customer licenses! However, you should be really focusing on providing services that add value to the Office 365 product and any revenue derived from actually selling licenses is simply ‘nice to have’.