Reseller demand fuels Microsoft Spla distie move

Resellers' desire to buy Microsoft's on-premise, public cloud and hosting software from one source lay behind appointment of Westcoast and Ingram Micro

Microsoft claims reseller demand drove its decision to widen its service provider licence agreement (Spla) channel to include two distributors.

Following the completion of a tender process, broadliners Westcoast and Ingram Micro have been handed rights to push Spla licences to hosting and reseller partners. This is the first time Microsoft has widened the Spla net beyond its large account reseller (LAR) community.

Microsoft's Spla hosting business is currently worth $100m (£64m) in the UK, having grown by double digits in each of the past five years, according to Clare Barclay, Microsoft UK director of SMB.

The vendor fired out requests for proposals (RFPs) to its seven commercial and OEM distributors, and Barclay (pictured) said Westcoast and Ingram prevailed based on the level of investment they were prepared to commit.

"Many of our existing resellers have deep commercial relationships with the distributors and we were getting more and more requests about whether they could buy Spla through distribution," she told ChannelWeb.

Westcoast and Ingram can now act as one-stop shops for Microsoft's traditional on-premise software, Office 365 public cloud offering and Spla, Barclay pointed out.

"It was also about the training, development and support they can provide to the VARs," she added.

"Spla is a very strong and vibrant business and we feel that distribution, in combination with the LARs, can continue to grow it in the double digits."

While Microsoft recently slashed Office 365 prices, UK Spla prices are set to rise at the end of 2012 as part of the vendor's European price harmonisation drive. This has led some to question the long-term competitiveness of the Spla model for resellers weighing up how to offer Microsoft as a service.

Microsoft also recently made Office 365 more attractive for partners to sell from a margin and billing perspective.

But Barclay said both Office 365 and the Spla model will continue to have their place in the channel.

"It is not an either or," she said. "The key consideration is the customer's needs. If they do not require a customised set of features or have a complex set of requirements, they may want to look at Office 365.

"But if they want something customised for their cloud environment, a hosting solution is a good way to move forward."

Microsoft sent RFPs to its four commercial distributors: Ingram Micro, Westcoast, Computer 2000 and Avnet. Its OEM distributors, which include three of the above names plus Entatech, Micro-P and VIP Computers, also received an invite.

Barclay said Westcoast and Ingram got the nod based on headcount commitment, enablement and training, and the marketing support they could offer partners, as well as whether they partner with other hosters or are making an investment in datacentres themselves.

"We were incredibly impressed by the level of investment partners showed and it was a difficult decision," she confided.