Aussie partners to get Office 365 Open in eight weeks

Microsoft Australia has revealed more details of its plan to put Office 365 in the hands of the entire channel.

Steven Miller, business group lead, Microsoft Office Division, said in a statement: "I'm pleased to announce that effective 2 April 2014, we will be launching three new channels for Office 365, giving our SMB customers the choice and flexibility they desire when purchasing."

Licencing for Microsoft's SaaS product will come in three forms: Open licence, the Microsoft Online Portal or via retail partners.

Miller said: "Open licence and the Microsoft Online Portal will be available through Microsoft resellers."

Dean Swan, Microsoft Australia's director of Partner Strategy, Programs and Industry, expected Open would be of most interest to the channel.

"Office 365 under Open allows existing partners to build a recurring revenue stream, and they will be selling those licences under their existing models. The channel is very familiar with Open."

Microsoft will continue to go via its three local distribution partners: Synnex, Ingram Micro and Express Data.

Open Licensing will give resellers "the ability to bundle Office 365 with existing services, and bill for Office 365 as part of the total service offering. Office 365 Open Licensing will only be available with annual billing."

Sales via the Microsoft Online Portal allow a choice of monthly or annual billing. "Microsoft resellers will be able to sell via this option by attaching a ‘Partner of Record’ to a customer account," said Miller.

To bridge the gap between the annual billing cycle of Open and some customers' preference for monthly billing, Swan said: "It is nothing too different to how we have bridged it in the past. They typically leverage financial solutions if they are feeling pressure on that front. Microsoft isn't too out of line with the rest of the industry with annual billing fees. The broader channel is familiar with that and there are systems in place, such as financing."

He suggested that partners would be able to sign customers up to longer-term deals. "If a customer is committing to a longer-term arrangement, they are getting more attractive pricing."

Pricing will be revealed 30 days prior to general availability, added Swan.

"In the lead-up to that, we are launching a 12-week program, which is basically a step-by-step guide to help partners transition their business to the cloud," he said.

The free Cloud Champion program will cover topics such as educating partners on how to set up marketing for the cloud as well as accelerated sales. "We will share practices around rapid deployment, complementary services – it will be the most complete immersive education in how to be successful as a cloud business," said Swan.

Next: Partners sound off on Office 365 launch

Partners have been widely positive about the move to general availability of Office 365.

Australia was alone around the world in restricting the software-as-a-service to a single syndication partner, Telstra; the decision was met with some annoyance from many in Microsoft's local channel.

The overriding feeling from the channel about today's announcement of general availability of Office 365 is – finally.

Sean Murphy, principal of Sydney-based Nexus, summed up his feelings in one word: "Fantastic."

He said that for smaller customers, "Office 365 is going out like hotcakes".

"I have been waiting for this. I have no problems with Telstra per se but I don’t think running Office 365, which I think is a fantastic product, mandated to be sold through a telco, is the best way to go."

He said smaller partners would be able to better able to offer the "full benefits" of Office 365 by tailoring it to customers' needs, such as integration with Azure.

"Telstra are a very big company and they tend to productise things a bit, which I understand is a Telstra thing that is best for their business, but is not necessarily the best for customers."

Brennan IT national marketing manager Robin Marchant told CRN that the midmarket-focused player was currently planning its strategy to take Office 365 to market.

"I think it offers a great deal more opportunities. I think by offering multiple channels and providers, it will certainly open it [Office 365] up to the marketplace."

Marchant said Brennan had not seen much activity with Office 365. "Moving forward, it will change because the demand will change. You can see that's what will happen.

"By having the local providers and better partners, customers will get better support… [it] is a better way than Telstra, where customer service is not always the best or has a reputation of not being the best."

Alex Gambotto, managing director of The Missing Link, a Microsoft gold partner, told CRN: "We believe that most cloud infrastructure is the future because you can achieve much better economies of scale.

"We have done some Office 365 implementations. We are quite happy but it is definitely for a specific type of client. Some clients would prefer to house it themselves or have a provider like us provide them with Exchange on their server in our cloud, even though it is slightly more expensive."

Gambotto added that "one size doesn’t fit all" and that different clients might suit Office 365, on-premise or hosted Exchange. "It is more about the particular requirement of the customer rather that its size."

Today's announcement should mean more opportunities for most SMB and midmarket-focused resellers; not so for Melbourne-based Paradyne.

The cloud integrator is a key partner of both Microsoft and Telstra and has done more than 300 deployments to more than 750,000 users. 

Paradyne founder Loryan Strant said the new Open licence would create more competition. "If we were to stick with just Office 365, and nothing else, we would potentially be in trouble, but that is not going to happen for a variety of reasons.

"One, we have a very strong relationship with Telstra and we will continue bringing customers to Telstra and doing work with Telstra. We are not concerned because we do a hell of a lot more the Office 365 – people just don’t know it because Office 365 is our lead product."

He added that Paradyne has "just won a contract to deploy Office 365 for a government department in the Pacific, that we believe will be the largest deployment in that region".

One partner, however, that was keen to keep the status quo was Dean Calvert of Calvert Technologies.

"The benefit of continuing to work with Telstra is you can do it on a month by month basis through Telstra while go though Open, it is annual [billing].

Partners must weigh up "the administrative workload for the partner of managing it themselves versus going through Telstra".

If you factor the administrative costs that you have of doing the ordering, the invoicing, chasing the payment and managing all of that, I look at all that and ask, 'Is it work me having that extra workload for what show on paper as a few extra dollars?'."

"Even though you might be sacrificing a bit in raw profit [by going through Telstra], I question the benefit of managing it internally. For my money, I am sticking with Telstra."

The change also gives Ingram Micro its first chance to distribute Office 365.

When CRN asked Microsoft's Swan about distribution, he said Microsoft's three disties were Ingram, Synnex and Express Data.

Lee Welch, senior business manager, Software and Cloud Services at Ingram, told CRN: "We could not officially sell Office 365 in Australia [under the Telstra deal]. Around the rest of the world, we have been selling Office 365 for a number of years. It is great because we [now] can draw on our experience around the world.

Welch said it was "a big opportunity for the SMB channel".

"For the first time in Australia, partners can sell Office 365 under Open licence. Partners have been awaiting this for some time. There is some pent-up demand."

Ingram is launching the Office 365 licensing academy as well as running Office 365 demo and deploy workshops.