Microsoft’s New Zealand CSPs – direct v indirect

Cat Mules

Cat Mules

Umbrellar is largely known as New Zealand's first provider of the Microsoft Azure Stack. Our Partner network also know us as their Cloud Solution Provider.

The interruptions of COVID-19 have accelerated pressure on companies to digitise their business models. Growing demand for always-on connectivity, effective collaboration, and security capabilities are just some key trends driving more business into the global Cloud. Today’s businesses can be more agile, more innovative than they have ever been before and the world’s largest global software provider, Microsoft, continues to lead the path for what we can do. Developments in Cloud technology will soon see “everyone and everything connected”, says Managing Director of Microsoft New Zealand, Vanessa Sorenson.

There are so many examples of the business value of partnering with Cloud Solution Providers (CSPs). Access to professional Cloud services and support enables businesses to activate their staff’s creativity and establish more integrated, deeper and much more meaningful relationships with customers. It fosters experiences that are customer-centric and collaborative.

When done well, the impacts of Cloud partnership will be visible in all business areas. Cloud solutions align with and build upon the key market touchpoints, doing so as preferences and choices evolve and priorities change.

Maybe you’re worried the Cloud will be upend your long-established processes or destroy the ways of doing things you are skilled at. Don’t be. Yes, a transformation to the Cloud will challenge the status quo of legacy operations and transform the way value is delivered to customers. Cloud technologies are designed to support your business as it levels up to keep pace with our changing world. Working in partnership with a qualified CSP provides the guidance you’ll need for best practice.

Microsoft CSP direct vs indirect – What’s the difference?

Direct CSP Partners

Direct CSP Partners, as the name suggests, work directly with Microsoft. They purchase all their SKUs from Microsoft and on-sell them to customers.

Becoming a Direct CSP Partner involves a complicated process that could take many months to complete. Direct CSP Partners must meet the following requirements:

  • An active Microsoft Partner Network (MPN) ID and Microsoft Live ID
  • Capability to provide 24/7 first level technical support
  • Microsoft support plan (passing a credit check is required to purchase a plan)
  • At least one managed service, IP service or customer solution application
  • A sound customer billing structure
  • Demonstrate your best-in-class capability, maintaining at least one Microsoft Gold Productivity Competency

Direct CSP Partners are responsible for ensuring the commissions they earn exceed their initial expenses.

Indirect CSP Partners

Using an Indirect CSP Partner is the fastest, most immediate route to market for most resellers.

Using an Indirect CSP Partner is more streamlined – they’ve cut through the red tape between you and Microsoft, enabling a faster way to go to market.

Resellers can buy all of their SKUs from the indirect CSP Partner and on-sell them to their clients and customers at the profit they choose.

A major benefit of using an Indirect CSP Partner is you don’t have to be a migration or support expert – you can rely on your partner’s infrastructure and experience to do the bulk of the heavy lifting. Some CSP Partners, as Umbrellar, offer professional partner services, hosting a professional portal, as well as business advice, with flexible billing and rates. This model supports resellers to grow their businesses, making it the best strategic cloud option:

  • You can speed up, fast
  • You can focus on your investment
  • You can evolve your business model at a slower, more manageable pace
  • You can leverage off your partner’s services

Direct or indirect – which model is best for you?

For those unsure where to start on their cloud transformation journey, this can be a daunting question.

A Direct CSP Partner may be the right option if you already operate with, or are willing to develop, the suitable billing, sales and support infrastructure appropriate to your aims. Usually, if you adopt this model you’ll be relying on your Direct CSP provider to have the specific systems and infrastructure you need in place.

On the other hand, an Indirect CSP Partner is ideal for businesses looking to expand their cloud service offerings and invest in cloud support and billing capabilities more gradually. Purchasing from an Indirect CSP Partner gives you a renowned mentor you can collaborate with for any of your customer billing and support requirements.

Why go indirect

The reality is most businesses simply don’t have the time, capital or resources to sell directly with Microsoft.

Working with an Indirect CSP Partner, you won’t need to worry about set-up costs because you’ll already have the systems infrastructure you need to sell in place. This level of support gives you back time to focus on your customer value and grow your business.

The CSP model is a part of Microsoft’s wider ecosystem transformation to offer in-built flexibility, empowering businesses to remain agile, consumer-centred and secure amid dynamic market conditions.

CSPs offer leading products and services from the Microsoft suite alongside professional services. They are conduits for businesses wanting to use Cloud computing to modernise and bring more value for their own business as well as that of their customers.

The most impactful CSPs support businesses with upgrades, technology advice, and business support across their entire digital journey, with four main areas of added value:

  • Understanding customers and sales opportunities
  • Opening up new revenue streams and managing billing and support
  • Creating added value with package solutions
  • Offering personalised managed services in line with changing customer demand.

Going beyond basic subscription and billing facilities, and working with partners to truly modernise their legacy business systems and provide support and advice that activates value across all business facets, is what defines an effective CSP today.

What does a CSP framework look like?

Cloud transformation programmes vary widely based on the unique challenges and demands faced by each organisation. Nonetheless, there are several constants and common themes established in existing case studies and accredited processes that all technology and business leaders should consider as they embark onto the Cloud.

For instance, these CSP transformation aspects are often cited, which CEOs and CTOs should look for these important shared themes when thinking about their own Cloud migration strategy.

  • Reduced capital cost
  • Peer-to-peer participation
  • Global scale
  • Speed and flexibility
  • Productivity and removed need for ‘racking and stacking’
  • Fast and efficient compute performance
  • Reliability and safety of data backup

Even though guides from CSP programmes differ in recommendations, steps and considerations, businesses of all sectors will find benefit in looking to the transformation stories of their peers in the move. A few examples of winning Cloud transformation frameworks include:

Inframon: Running with Microsoft in the Clouds

The Warehouse Group: Turning a rapid, complex Cloud adoption into a streamlined multi-Cloud environment

MercyAscot Hospital: Delivering innovative patient care with Microsoft Azure Stack

LIC: LIC future proof technology platform with Microsoft Azure

What role does culture play in the CSP reseller programme?

The role of IT in business has fundamentally changed in recent years, with many more business leaders now requiring intelligent technologies to drive revenue for their organisations. Now, it’s role is fast becoming critical – but will depend on the pressures and needs of each particular business model

Far more pressure is on markets struck by the global Covid-19 pandemic. Here, it is dynamic leadership, adoption of IT, and adaptability to challenge the status quo, that will differentiate intelligent organisations  Gartner’s 2020 CIO Agenda research reports. Technology leaders are stepping up in this time of change to help guide businesses quickly routes of profitability.

“[T]o get everything now you have to be connected and you know I think there’s a real intrinsic fear and a lot of people want to know what that will mean… There’s so much good that can come about as well…So it is about the data. How do we harness it?” Vanessa Sorenson, Managing Director, Microsoft New Zealand, told Umbrellar Connect earlier this year.

Another key reason for moving to the Cloud is that having agreement and billing cycles fully automated and managed by the CSP equals time saved. Taking away the Cloud management empowers businesses with the opportunity to focus on the strategies and creativity that drive their unique core needs.

Salesforce’s CIO, Jo-ann Olsovsky, in Deloittes 2020 Global Leadership study, “In our company’s culture, you are expected to challenge the status quo…We are always trying to determine where technology and our customers are going to be in three years, and how we can get there yesterday.”

Today’s businesses bring value at different points along the customer journey, and in different ways. Underlying the depth of possibilities and business proof-points that come with the Cloud are the impactful businesses that drive our markets and economies. Umbrellar Group, CEO, Michael Foley, spoke about this value at the launch of Umbrellar’s Cloud news hub, Umbrellar Connect.

“[It] is all about amplifying the amazing capability of the myriad of NZ tech specialists – big and small – in a relevant and engaging manner…It’s the network effect in action!”

What are the emerging business models that drive the CSP programme?

Business relationships change on the cloud. The CSP – partner relationship depends partly on the strategic approach chosen by a business, that is, whether they are running on Infrastructure-as-a-Service, Platform-as-a-Service, or Software-as-a-Service. It also depends on the CSPs degree support on aligning the Microsoft Cloud footprint with customers’ changing requirements. Here are the key ways Umbrellar does it.

1. CSP for managing optimisation

The constant updates and optimisation of the Cloud ensures end users have the licensing they need for their business to be productive. It’s a market move away from legacy on-premises systems where businesses will not be charged for the services or licences they are not using.

Effective CSPs will provide on-going advice and guidance to align their Cloud footprint with changing market requirements. For example, a CSP might recommend changing from in-house app development to on-Cloud app development, or changing the size of an App Service or Virtual Machine to align with seasonal demand or historical patterns.  These points of advice can be as comprehensive or as specific as needed to optimise the customer’s actual usage.

Whether customers are operating fully on the Cloud or following a part-Cloud, part-legacy model, the CSP programme equips customers with a natural tendency toward productivity.

2. CSP for managing change

Pre-Cloud, most businesses operated by the on-premises model of high capital expenditure and private servers.

Today, with the agility and wide reach of the Cloud, the transformed CSP – partner relationship means they can collaborate together in ways that would create benefit for customers.

A CSP should constantly optimise for its customers, ensuring they have the capabilities they need to be fully productive.

This goes beyond the old model of simply selling a license or service – the best Microsoft CSPs are based on long-standing relationships powered by their partners’ activation and consumption of the Cloud licenses they sell. CSPs and partners are now able to progress their work fully in partnership, with decisions and measures of how technology benefits of their investment.

How do I measure ROI with the CSP programme?

To track and prove the success of Cloud performance, effective CSPs will guide businesses not only on how to adopt and use Cloud technology, but also in quantifying the return on investment.

Umbrellar recommends three steps:

First, ask if you could take more risks.

On the Cloud, ROI is not solely how much money a service brings in, or how many sales there are of a product. It’s about the entire value of whole customer experience. If one piece in the system is not performing, this can restrict the value of the entire offering.

The Cloud is a fundamental business mindset shift, as it changes the business costing model from capital costs of excess physical investments, to only pay for what they consume.

An effective CSP will work with clients to consider all options, as every business has different needs, speed requirements and desired outcomes.

Next, work with your CSP to identify best practices regarding your key business metrics:

  • Understand your business needs
  • Assess your current environment
  • Seek advice on cost optimisation in compute, storage and licensing
  • Perform a financial analysis
  • Track data modernisation opportunities
  • Report on possible migration scenarios to identify the most cost-effective option

Want more detail on ROI best practices? Read Microsoft’s related article: Cloud Solution Provider Programme (CSP) Tips for Partners.

Finally, understand the CSP release cadence – new features and products

Once, the Microsoft model was based on the release of new products on three or four-year cycles. Now, the Cloud update release cadence and user interface is happens every one or several months, depending on the application.

Businesses no longer need to shut down for updates: they are automated.

To really lead with the Cloud, partners are not focusing on the upgrade itself, but rather shifting their offerings to focus on the change management of Cloud upgrades. A CSP will ideally let customers know these changes are coming let ready their partners with recommendations around how best to utilise them.

How to get started on the CSP programme?

If all of this gives you a dose of anxiety, you’re not alone.The speed of technological change is a key concern for 38% of CEOs globally, according to PwC’s most recent annual global CEO survey.

As businesses work with CSPs on their agile transition to the Cloud, there’s opportunity in learning from partners about their different experiences along the Cloud transformation journey. Below is a collection of digital transformation case studies and stories you can explore further.

Smoothing your cloud transition with VMware and Microsoft

Azure in the virtual datacentre: Rehosting guide

Boost innovation, connect globally: What Microsoft has planned for NZ’s Azure cloud data region, from its local lead

From legacy to cloud – the latest in the world of data

Technology changes management. Here’s the impact of the cloud.

Selecting an indirect CSP

If you’ve chosen to progress with your Cloud transformation, you’ll want to consider how ready you are for onboarding and entrance to market, and what you need from a CSP.

Questions to determine which is right for your organisation:

  • How quickly do we want to go to market?
  • Would billing through an automated platform help business?
  • How much technical support will my business provide?

A CSP can help you:

  • Be responsive to customers. Selecting and adapting technology so you can respond quickly and efficiently with your unique customer needs and personalisation of the customer experience.
  • Build out your business model with expert guidance. The new generations of Cloud applications are enabling support for long-standing business models as well as entirely new and future pointed business capabilities.
  • Stay up-to-date with the most reliable software.The Umbrellar Customer Portal allows you to add or remove products or licenses immediately and consolidate billing into one automated invoice.

Want more detail on joining Microsoft CSP Programme with Umbrellar? Visit the Become an Umbrellar Partner page.

Where can I learn more?

Transforming onto the CSP programme is a powerful undertaking, and one that will bring immediate and powerful benefits to your business. Join us as we look to bring business more in line customer demands and resilient, to show the value of our technology experts in a rapidly-moving digital future.

For more insights into CSP transformation, see these resources:

While some partners have viewed the Cloud cautiously, realistically the Cloud opens up new worlds of possibilities, new types of upskilling, business models, and collaboration opportunities.

Want more to join the movement and make your company more competitive with technology? Join the Umbrellar Partner Network at the Become an Umbrellar Partner page and we will work with you to accelerate your business journey.

Cat Mules

Cat Mules

Umbrellar's Digital Journalist, coming from a background in tech reporting and research. Cat's inspired by the epic potential of tech and helping kiwi innovators share their success stories.

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Managed cloud services refers to outsourcing daily IT management for cloud-based services and technical support to automate and enhance your business operations.Often, internal IT departments don’t possess the skills to effectively monitor and maintain a cloud environment. In these situations, a company hires a third-party cloud managed services provider to manage cloud security, computing, storage, network operations, application stacks, vendors and more.

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