Microsoft SMB Cloud Champions Club: Gaining Partner Momentum?

Microsoft spent extensive time on stage last week, evangelizing the SMB Cloud Champions Club to VARs and MSPs attending conferences in Chicago and Boston, respectively. But I had some follow-up questions. Specifically, how many channel partners are joining the SMB Cloud Champions Club — and what’s the potential upside for channel partners?

Microsoft answered my follow-up inquiries today. Generally speaking, the SMB Cloud Champions Club includes VARs and MSPs that promote Exchange Online, SharePoint Online, and related SaaS applications and services to SMB customers. Since launching in August 2010, the SMB Cloud Champions Club has generated nearly 1,000 partner cloud wins; and 33 percent of those wins involve more than 25 seats. The number of partners participating in the SMB Cloud Champions Club is growing 25 percent month over month, adds Jenni Flinders, VP of US partner strategy and programs at Microsoft.

The SMB Cloud Champions Club has three channel partner tiers:

• Tier 1 is for partners that have at least three active cloud customers and more than 75 end-customer seats in the cloud. In return, partners gain a Microsoft Business Development Manager (BDM), specialized learning plans and a monthly call with Microsoft.
• Tier 2 is for partners that have at least eight active cloud customers and more than 200 end-customer seats in the cloud. In return, partners gain all the Tier 1 benefits plus so-called velocity funds and marketing funds.
• Tier 3 is for partners with at least 20 active cloud customers and more than 500 seats in the cloud. In return, the partners gain all of the Tier 1 and Tier 2 benefits plus a marketing advisor, promotional incentives and enhanced operations support.

Bigger Picture: Engaging All Partners

Flinders is quick to note that the Microsoft Partner Network channel program now has cloud initiatives for all sorts of partners.

For instance, Microsoft is helping systems integrators with training around Windows Azure, the company’s platform as a service (PaaS) cloud. Also, Microsoft offers ISVs free Windows Azure and SQL Azure accounts for 30 days to help developers get a feel for Microsoft’s PaaS platforms, Flinders points out.

Longer term, I wonder if Microsoft will connect the dots between Windows Azure application developers and the Office 365 Marketplace — which lists third-party partner applications. The Office 365 Marketplace is in beta, and Flinders declined to speculate if or how Microsoft would promote Azure developers in the marketplace.

Remaining Challenges

Compared to a year or so ago, it’s clear that the Microsoft Partner Network is evolving rapidly for cloud channel partners. I’m not suggesting that Microsoft has worked out all the kinks. As I state all the time:

• Some partners fear moving customer information into Microsoft’s data centers;
• other partners want to manage end-customer cloud billing — a capability that Microsoft doesn’t offer; and
• still other partners worry about Microsoft dialing SMB customers directly.

Regardless of your personal opinions, ignoring Microsoft’s cloud strategy certainly isn’t an option. As Office 365 moves from beta to general availability sometime in 2011, VARs will need to either partner or compete with Microsoft in the cloud. It sounds like the Microsoft SMB Cloud Champions Club is growing rapidly — though the barrier to entry isn’t that high. All a VAR needs is three customers and 25 recurring revenue seats to get started.

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