It’s probably not news to you that Microsoft has been reorganized around supporting the One Commercial Partner (OCP) model. What does this new era mean for resellers and ISVs? Partners will need to be able to sell and support Microsoft cloud infrastructure as well as productivity and business solutions to keep working with Microsoft and capture new revenue in the cloud space. This blog explores the three big changes partners will have to make to continue to make money and maintain reasonable margins in the OCP Era. The Cloud Service Provider program has been created to help partners adapt to these changes. Checkout our whitepaper “Demystifying Microsoft’s Cloud Service Provider Program for Dynamics Partners” to learn how CSP can enable partners to move to modern with minimal shock to their business.
1. Adapting to the Recurring Revenue Model
The recurring revenue model of the cloud market enables solution and service providers to grow their revenue streams year after year, but there are challenges to this change. Vendors who are used to getting paid up front for software, services, sometimes hardware and some ongoing maintenance revenue need to start thinking about how they will migrate their business to a recurring revenue model. This includes creating ongoing customer engagement and an online marketplace for transacting, billing & collection and order provisioning.
2. Expand Solutions Portfolio
To compete effectively partners need to be conversant not only in regard to ERP, but in CRM, Office 365, PowerBI and Azure as well. Depending on the verticals in which you specialize you may need to add capabilities around the rest of the Dynamics 365 applications, so you’ll want to learn the new elements like PowerApps and Flow. With new versions of D365 and new features being developed at an increasing pace, partners will need to continue learning to stay up to speed product knowledge including extensions.
As with traditional business software implementations, cloud ERP vendors will need to offer vertical or functional domain expertise with custom IP to create customer value and differentiate from the much larger pool of competitors. With the proliferation of CSP Online Marketplaces, the ability to bundle solutions and the very transparent pricing model on the Microsoft’s website, vendors who cannot offer any value-add or can’t effectively communicate their value will be forced to compete purely on price. It will be very difficult for independent resellers to compete on price with large online resellers. The good news is business customers will pay a premium for the added value that a true software partner offers, so Dynamics partners need to leverage their industry specific knowledge, experience and vertical expertise to maintain reasonable revenue streams.
4. Market, Sell and Deliver Digitally
Because commercial software customers increasingly want to shop, compare pricing and transact online at a lower cost, service and solution providers must undergo some form of digital transformation. Digital transformation will help reduce cost of delivery, reduce cost of sales, reduce the sales cycle length and drive more velocity in the pipeline so partners can close more business to maintain revenue. A professionally built website and social media properties are now critical strategic assets to reach prospects and communicate with customers way beyond your geography.
Microsoft’s Cloud Service Provider program helps cloud and traditional vendors do with minimal shock to their businesses. Learn More