When it comes to profiting from Microsoft Office 365, Terry Hedden has a slightly different view of the world. As CEO of Infinity Technology Solutions, an MSP in Tampa, Fla., Hedden sees at least five ways VARs and MSPs can profit from cloud computing -- outside of the recurring revenues that Microsoft offers to partners.
During the Kaseya Connect 2012 user conference last week in Las Vegas, Hedden said his company charges cloud customers for the following five services:
- Consulting: Assessing customer business needs and suggesting solution options. Hedden described this opportunity as the most valuable service that VARs and MSPs offer -- so charge for it, but potentially bill for it over the life of the deal.
- Plan and design: Outlining the proper technology systems and implementing strategy.
- Delivery: Preparing the cloud offering for distribution.
- Implementation: Transferring, deploying and customizing the customer’s data.
- Operation and management: Monitoring and maintaining performance of all systems. This includes a fee for managing Office 365 deployments, Hedden said.
Office 365 Billing Debate
Hedden also downplayed some VAR concerns about Microsoft managing end-customer billing for cloud services, leaving partners out of the process.
If partners handled Office 365 end-customer billing, it would be an expensive, time-consuming process that likely negates the 6 percent long-term profit margin that partners earn from Office 365, Hedden noted.
And in a theoretical world where VARs and MSPs handle end-customer billing for Office 365, partners could wind up in a financial pinch with Microsoft if end-customers don't pay their bills, Hedden noted.