Microsoft woos VARs with SaaS pricing shift

Partners can net six per cent annual recurring revenue under latest model unveiled at recent WPC

Microsoft has beefed up its online services offering by adding two suites and an accompanying business model offering compensation sweeteners for its partners.

At its World Partner Conference (WPC) in Texas, the software giant announced it is adding to its family of subscription-based applications with a deskless worker suite and a business productivity suite.

It also introduced a new partner pricing model, meaning partners that sell either of the two suites or their component parts will receive 12 per cent of the first-year contract price and six per cent for every remaining year of the contract.

Claire Barclay, director of partner strategy for Microsoft UK, said: “A VAR selling to SMEs that already have some type of IT infrastructure in place can sell the online services on a subscription basis ­ the customer might want to add email facilities as it adds staff.”

David Simpson, commercial director at VAR Softcat, said: “The suites are competitively priced and are what our customers have been asking for. Most of the customers that will use this service will be new and will come from market areas from which we were unable to get licensing revenue before.”

Tim Wallis, chief executive of Microsoft partner Content and Code, said: “Not only will the new model enable us to profit from annuity revenue streams, the margins are very attractive and there is a great opportunity for partners to make additional money from services such as migration and integration and business process consulting.”