Options for MSP Direct Bill Partners with Microsoft’s New Requirements

The big three Distributors provide a wide range of products and services, including hardware, software, and cloud services. The most comprehensive range certainly provides you a one-stop-shop, but your business needs focus and specialization. Some providers have expertise around specific product lines, and your account manager may have specific capabilities. Ultimately, the biggest may not be the best.

Billing alignment will save you time and money. Understand how they invoice you. How will you invoice your customers, and will their invoicing process impact your billing process? These processes can be time–consuming and need to be automated as much as possible. Understand the formats of Azure consumption and license-based invoices. Using a billing automation system like Work 365 will significantly reduce this risk and effort related to billing. Some distributors provide pro-rated refunds on reductions; some offer a free month or a set of free days.

Is there an integration available with your internal systems? Have you invested in a billing and provisioning system? Indirect providers will want you to use their portals to provision all their services. They believe it is difficult to transition services from one provider to another, so a lock-in is inevitable. They will also offer a migration service to move your services over.

Financial impact and Margins are going to be critical to your decision. If you lose on the margin, you could still gain it back on the savings from the ASFP cost (15K/year). At the 300K threshold, you could lose 5% of your margin and still arrive at break-even – this is back-of-the-napkin math. Also, you can manage and expand margins only when you have options in service providers. If you only provision through the distributor portal, it’s more difficult to bundle and even shop around.

Support becomes vital during a service migration or when things break. Distributors sell their support services as differentiation and it comes in the form of pre-sales and post-sales support. Distributors can be great sales partners and provide pre-sales support; it’s when things break that they contact Microsoft behind the scenes to coordinate. The level of support and business you bring in will dictate the margin you receive.