You’re a managed service provider (MSP) and you’ve been dealing for years with the same hardware distributor, like Ingram Micro or Tech Data. You buy all your servers, cables and switches from this company, and you trust it to fill your customers’ orders. So, now that you’ve expanded your portfolio to sell Office 365 through the Microsoft Cloud Solution Provider (CSP) program, you figure this distributor still has the right stuff to help you serve your clients. But, wait a minute. We’re talking about a hardware distributor–an organization that also sells microwave ovens, home appliances and telephone equipment. What does that have to do with the cloud and understanding what you need to run your cloud business?

Cloud Solutions Can’t Be Delivered Like Hardware

Hardware distributors are set up to order and ship hardware — boxes and boxes of it. They manage thousands of vendors and product SKUs, and they excel in shipping products out to their customers. In fact, on Feb. 16, Ingram micro announced that it had been acquired by Tianjin Tianhai, a major logistics leader, which tells a lot about the business’s core competence. Although Ingram is clearly trying to catch up with the cloud, its legacy clearly hurts it when providing cloud solutions to resellers.

We’ve heard many stories about MSPs who have learned this fact the hard way. Here are some examples of issues that are causing problems:

1. The billing cycle

Distributors are set up for a one-time purchase billing cycle. This means each time you buy a server or PC, you’ll be billed for it. It also means that if you buy 10 subscriptions to Office 365 for your clients, you’ll also be billed 10 separate times. This is a lot different from the monthly bill you’d receive from a true cloud service provider for all the purchases you make. In a recent forum on Reddit, one MSP reselling Office 365 from Ingram Micro CSP said this kind of billing practice was just too confusing to deal with.

“Billing on the anniversary of the user’s license rather than everyone being billed together at the end of every month is really starting to tick me off,” said the MSP. “This last week I’ve had an invoice almost every other day for varying amounts. It’s a nightmare to keep track of.”

2. Solution support

As we said earlier, your distributor is set up to help you with the hardware it sells. The distributor’s help desk is staffed by experts who can find part numbers, track shipments and sort through all the inventory in the product catalog. However, all that expertise isn’t worth much when your client is having problems connecting to Office 365 or when you have questions about configuring Outlook.

Still, traditional hardware distributors are desperately trying to catch up in that field, too. We see many announcements of cloud support services being added to these giants’ marketplaces. The problem is that they usually outsource. For example, TechData is outsourcing there partners’ support to Quatrro for Office 365–for an extra cost, of course. Even if it’s not outsourced, it’s super-expensive. Take Ingram Micro Office 365 support, for example. It costs more per user per month for basic 24/7 direct customer support than the price of the Office 365 Business Premium subscription.

In comparison, for even less, SherWeb partners get an Office 365 Business Premium subscription, the complete hands-on migration service and unlimited 24/7 direct customer support. And there is no annual commitment required.

3. Migration

Hardware distributors don’t know much about migration. Just like their cloud support service, they’re outsourcing most of the migration services they recently introduced. And “services” is a big word because they are mostly only reselling migration tool licenses, like SkyKick and BitTitan.

They may add complete migration services someday, but it will most likely be an outsourced and payable service like everything else. It might be convenient for them, but it will only lead to more problems for you and your customers. Adding an intermediary rarely simplifies processes, clarifies communications and reduces delays.

Even if plan to migrate your client’s data by yourself using only the tools provided, chances are you’re going to need expert help at some point. Cloud migrations can be complicated. If you could get that service for the same price, why wouldn’t you want your provider to do it for you? That would let you focus on your client’s business transformation and attach more value.

Supporting and Billing Customers Directly Should Be Your Choice

We’ve already told you about the difference between technical support and migration from a hardware distributor vs. a cloud provider. If you’re just starting out with Office 365, you might want to consider leveraging your cloud provider’s direct support and migration services so you can get to market faster. Since traditional hardware distributors don’t deal directly with customers, they’re not used to offering these kinds of services under a partner program. For example, SherWeb, a leading cloud solutions provider, offers three distinct business models under Partners First, its partner program: white-label reseller, co-branded and advisor. This means you have the flexibility to outsource support, migration and/or billing. And your buy price doesn’t depend on the program you select.

Take the Time to Compare

Now, we are not saying hardware distributors are all bad. But if you think of purchasing your cloud solutions from them just because you already have a business relationship, you should at least compare your options. MSPs who partner with a real cloud provider will generally end up giving better service to their customers and, in return, generating extra profits. The provider’s involvement in your business and your customer’s unique requirements will make your life way easier. From pre-sales support to migration to on-going technical support, delivering cloud solutions is clearly an expertise in itself.  

So, don’t be fooled. Take the time to compare your hardware distributor with a true cloud solution provider. See how they stack up. SherWeb has put together a detailed comparison. You can see it here.