Partners wary of Microsoft plans to take Azure purchasing direct

Microsoft says SMBs will now purchase Azure from the vendor itself

Partners have reacted with caution after Microsoft revealed plans to take the purchasing of Azure direct.

In a post on its website, the vendor introduced the Microsoft Customer Agreement (MCA), which it said will become "the primary way for small and midsize customers to buy Azure services" from March this year - replacing the current agreements.

It also stated that Microsoft representatives will be the "primary contact" for customers.

The new scheme will "provide a better buying experience with a fully digital agreement and the ability to customize for specific purchases," the vendor said.

Microsoft said that partners will continue to support customers with presales and post-sales Azure services.

It added that customers wanting to purchase managed services should do so via the Cloud Solution Provider programme.

Partner reaction to the news has been conflicted.

Kelvin Kirby, CEO of Technology Associates, called the move "sneaky".

"Microsoft's Enterprise Agreement has always allowed a customer to purchase directly from it," he explained.

"For the rest of the world, the arrangement has been Microsoft working through channel partners. That seems like it might be a change to the approach, like it did with Office 365.

"I don't think it will endear them to the channel because I think customers will buy it direct and then struggle to use it.

"The problem with this is that most one-man bands can set up Office 365, but Azure requires much more knowledge to set it up - it's a solution.

"Unless there is some clause in there for Azure partners to help with the configuration I can't see it working.

"From experience we know that vendors who go direct do upset the channel."

Not all partners are as sceptical of Microsoft's intentions, though.

Dan Scarfe, founder of Microsoft partner New Signature, said that he had not received any communication from the vendor regarding the changes, and from his understanding he thinks it could just be a replacement for the vendor's old Web Direct model.

"There's always been people who want to buy direct from Microsoft, and I don't think this is going to pose a threat to partners if it is just replacing Web Direct," he said.

Neil Murphy, group managing director at Bytes, said the move may be seen as confrontational.

"After years of the partner community influencing technology and procurement decisions and helping our customers to adopt Azure, the recent announcement could be seen to put us in competition when owning the customer contract," he said.

"I can see why Microsoft is modernising its licensing to a modern commerce platform, and many customers will welcome the simplification of contractual terms that this change brings."

Murphy also questioned the rationale behind the decision, and suggested that customers may be better served by keeping their relationships with partners.

"If Microsoft's goal is to compete with AWS and improve customer experience when convincing new customers to invest in Azure, I would question why, as part of this change, Microsoft is aiming to pursue existing Azure SCE (server and cloud enrollment) customers already growing their consumption with partners.

"I would have expected them to focus their energy on driving more net new Azure customers.

"If I were a customer I would think twice about handing full commercial control to Microsoft under this new contract at a time where pricing for Azure has increased for UK companies particularly those with SCE agreements due for renewal."

In a statement sent to CRN, Microsoft said: "Beginning March 2019, Microsoft is introducing a new way of doing business, one that will simplify and enhance the Azure experience.

"Built with the needs of its customers in mind, a streamlined digital Microsoft Customer Agreement will replace the current agreements customers use to purchase Azure.

"It gives customers the ability to easily buy and consume Azure with sophisticated billing and cost management capabilities and comprehensive subscription and account management features."

Stay tuned to ChannelWeb for further analysis on Microsoft's annoucement