Microsoft’s $1000 BPOS incentive draws mixed reaction

Microsoft's traditional system integrators looking to build their online services portfolio through Microsoft's Business Productivity Online Services (BPOS) have begun to receive their $1000 enticements, but not all partners are benefiting from the scheme.

Microsoft this week announced that it will pay $1,000 for each eligible Microsoft Online Service subscription of 25 seats or more, or $250 for each eligible Microsoft Online Service subscription of 15-25 seats sold by Microsoft Online Services Advisors.

Early adopters of the promotion, such as Sydney-based HubOne, began receiving the $1000 incentives late last year. Traditionally a custom software developer and managed services provider, managing director Nick Beaugeard told CRN that the incentives have aided him to shift his business model from traditional system integration to online services.

"There was a need for the incentive," he said. Online services are a different sort of economic model and it's certainly a different business model," Beaugeard said.

"So what the incentives have done is helped really re-adjust our company to go from being an online services company rather than an on-premise installer. It has allowed us to convince the team that [online cloud services] is a good business model and the change in the business has financially worked out to be a change for the better."

Beaugeard said the incentive has financially aided HubOne, in "actually paying for some of our work to migrate the customers", so it can get a "decent" customer base and offer value.

Microsoft directly hosts the BPOS suite which is sold by Telstra through its T-Suite software-as-a-service offering, which launched last year.

"We're getting a surprising amount of attention from both Microsoft and Telstra, probably way above our sales figures are right now, but it's really helped us embrace the new business," he said.

Agreeing, Paul Black from Resolution Technology, a Queensland based systems integrator, said Microsoft Online Services -  Exchange Online, Sharepoint Online, Office Live Meeting and Office Communications Online - is one of its core products where he focuses a lot of his strategy around for new and existing clients.

Resolution Technology is currently in the process of migrating three or four businesses from using an on-premise infrastructure to BPOS, including the Queensland Chamber of Commerce with 170 people and Foster Care Queensland.

Black said Resolution Technology works quite heavily with non-for profit and charity organisations and the incentive allows it to be cost effective.

"It's not so much a motivation, we're already motivated about the product - it allows us to discount the customer or get some better value added services.

"We normally try to pass that on, we subside the Foster Care Queensland."

However, Microsoft hosting services partner, YOURasp, which hosts Microsoft's CRM and Exchange for resellers, said the incentives encouraged direct competition between it and Microsoft.

Alex Liffers CTO of YOURasp told CRN that the incentive, which enticed partners to use Microsoft's hosting services directly through Telstra rather than incentivising hosting partners like YOURasp.

But he believes Telstra's volume game won't impact his business.

"We work with resellers doing the hosting work," said Liffers. "Microsoft has been trying to get their partners to host direct or get their partners to provide the service.

"But, we differentiate ourselves. [Through] Microsoft [the service] is pretty much a one size fits all, purely about volume and very inflexible. We've never been in the game of doing everything on price, we're not the cheapest, not trying to be."

And Liffers said, business has been booming in recent months with more resellers taking up its hosting CRM and Exchange offer in the past six months.