Microsoft 365 Business is a major opportunity for resellers and channel partners. A new Forrester report takes a deep look into the channel implications of the new major release from the technology giant, concluding that resellers can expect greater margins and a more efficient cost of business as they start to take the new product to their own customers.
Microsoft 365 Business is a single “bundle” encompassing Windows 10, Office 365, Enterprise Mobility and Security capabilities. Launched in New Zealand on November 1, this new solution is a great fit for the New Zealand market; the Microsoft 365 Business is an SMB-focused solution and a perfect match for an SMB nation.
For more details on what this all entails, Microsoft has produced a comprehensive FAQ to ensure that partners are fully equipped to take this to market from the get-go.
This solution has been designed with the channel in mind, and benefits partners by providing a substantial boost to a reseller’s managed services and advisory business practices.
According to the Forrester report, channel organisations that adopt the Microsoft 365 solution can anticipate:
- 8% improvement in managed services margins
- 10% increase in managed services attach rate
- 20% increase in the deployment and advisory services revenue
These benefits apply to channel organisations of all sizes; for the survey Forrester researched small resellers with a dozen employees right through to corporates with 1,500 employees and $800 million in revenues.
How Microsoft 365 Business helps partner revenues
Microsoft 365 Business is a solution built with partners in mind. The focus for ease of deployment means that Microsoft has an array of readily available resources and tools that can be accessed easily on their dedicated partner page. It is also vital information that partners can use for their end customers when selling this solution.
In terms of direct revenue, Microsoft 365 Business is an opportunity for resellers to increase revenue by simply having customers sign up for more. Where previously customers might be paying for an Office 365 license; for this new solution, Microsoft 365 Business cleverly includes Windows 10, security, and other technologies so that customers reap the benefit they might not previously have had. All these additions and yet still this product remains a cost-effective solution for the customer, without the need to make each technology purchase separately. Partners stand to benefit too, as they can expect a 10% increase from license revenue sharing alone.
The Forrester research also shows that the greater scope of rolling out these complete solutions is an opportunity for the channel to improve margins. Rather than small quick deployments, Microsoft 365 deployments are larger projects, and require greater implementation consulting services on the part of the reseller, ensuring that the opportunity is collaborative and the relationship is binding.
For resellers, the attach rate is critical in building long-term, stable revenue models. Microsoft 365 is helping here, too. Because the suite of services is more comprehensive, the incentive on the part of the customer to migrate away from Microsoft 365 Business in the future will be significantly less. Forrester points out that the current attach rate that resellers have for managed services is 80 per cent. Microsoft 365 Business can be expected to lift that to 90 per cent, and with a low churn rate of around three per cent, resellers can expect this solution to enable long-term partnerships and steady revenue.
At the same time, the actual delivery cost for the provider is lower with Microsoft 365 Business. This is a result of the tools and templates that have been built into the complete solution, easing the resources that the reseller themselves needs to dedicate to the implementation. According to the Forrester report, partners can expect between five and 10 per cent improvement on the average 40 per cent project delivery margin most currently target.
Accelerated sales cycles provided through Microsoft 365 Business further benefit the partner’s bottom line by again easing the resources that need to be committed to sales, and improving the rate with which sales can be closed. It’s a solution that’s easy to explain, and packaged together allows the reseller to have a single conversation, rather than manage multiple relationships across the end customer.
At the time that Microsoft 365 Business was announced, the company’s CEO, Satya Nadella said, “Microsoft 365 is a fundamental departure in how we think about product creation.It is the coming together of the best of Office 365, Windows 10, enterprise mobility and security.”
By wrapping up all these critical enterprise services into a single package, backed by a reputable brand, Microsoft 365 is an opportunity to make the IT management of businesses far more straightforward and trouble-free. Partners always benefit when they’re able to make their customers’ lives easier.
The full Forrester report, which highlights the research methodology and provides greater insights into the benefits of Microsoft 365 Business to customers can be found here: Forrester Total Economic Impact Study: Partner Opportunity for Microsoft 365 Business.
This is the first of three articles looking at the benefits of Microsoft 365 Business for resellers. Stay tuned for the next two articles, where we will drill more deeply into where these revenue and savings benefits will specifically come from.