Office 365 has been in market for 4 months now. With its release on June 28th, 2011, Microsoft instituted an updated fee payment model at the beginning of our new fiscal year which started only 3 days later on July 1st, 2011. The mechanics of the fees and payments remain largely the same, but some significant t changes were made based on your feedback. I bring this up only because I still communicate with partners almost every day that are unaware of the updates or are completely ignorant of the fee structure or payout rhythm that we have established .
Two resources discuss the fee payment process and they are both located on the www.quickstartonlineservices.com website under the “partner opportunity” tab.
The Microsoft Online Services Partner Agreement Guide is your bible as it relates to how you are paid and when. Unlike with BPOS, with Office 365 you are paid UPFRONT for the New Customer Fee (12%). In the past, this fee was accrued and paid in portions over the year. Based on your feedback, and in order to help you compensate your sales personnel in a timely fashion, we have moved to an upfront model for “New Customer fees”. Keep in mind, however, that fees are not paid immediately. Generally it is quarterly, but when you are paid is in part based on how many seats you have across all your customers.To quote the Microsoft Online Services Partner Agreement Guide:
New Customer Fees (Microsoft Online Subscription Agreement Customers). …New Customer Fees are paid upfront in full for the first 12 months of a new Subscription or net additional seats to an existing Subscription (generally within 30 days of June 30, September 30, December 31, and March 31). New Customer Fees are based on the revenue to Microsoft expected to be generated by Customer’s initial Order on which Company is identified as the Partner of Record for a specific Online Services.
Recurring Fees (Microsoft Online Subscription Agreement Customers). …Recurring Fees accrue monthly and are paid on a quarterly basis (generally within 30 days of June 30, September 30, December 31, and March 31). Recurring Fees are calculated, monthly, based on the net number of subscription seats for which Company is designated Partner of Record.
Monthly Payments (New Customer Fees). If the aggregated number of seats across all Subscriptions for which Company is designated Partner of Record meets or exceeds a threshold of 150 (one hundred and fifty), then Microsoft will pay any New Customer Fees monthly instead of quarterly (generally within 30 days of the last day of the month in which the seat adds occurred). If the aggregated number of seats drops below this threshold of 150, then Microsoft may elect to resume payment of New Customer Fees on a quarterly basis.
Monthly Payments (Recurring Fees – Microsoft Online Subscription Agreement Customers). If Company’s monthly balance of Recurring Fees is greater than US$1,000, then Microsoft or an affiliate may elect to pay Company Fees on a monthly basis.
This is all upside for you! This payment model is more in line with sales rep compensation. If you would like more details to include 7 payment scenarios, I would encourage you to download the FY12 Online Services Advisor Fee Payment Structure presentation. It articulates the SLA on the fee payments to include timelines and dispute processes. The deck’s agenda is as follows:
- Online Services Advisor (OSA) Fee Definition
- Program Rules:
- MPN & MOSPA
- 90 days Rule
- Public Sector Program
- Fee Calculation
- POR Change
- Cross Region Partner Fee Payment
- Fee calculation scenario
- FY11 Year End 12% Fee Roll-Up Payment
- FY12 Partner Fee Statement
- Fee Payment Service level agreement
From the presentation:
The documents are fairly self explanatory and should answer most questions you may have. Know when your going to get paid; know these resources!