Profit in the Cloud VAR Economics

  • Article

Bryan Von Axelson 2010

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Ron Grattopp, one of my TS2 teammates recently did a great blog post on all the Microsoft Cloud resources and where they currently exist out in the Microsoft World, it reminded me of a recent publication I ran across while prepping for a webcast. I found a great document that Monitor put together for Microsoft based on 30 in-depth interviews with VAR’s and select Scale Resellers in the U.S., U.K. and Germany. I was particularly impressed that it broke the different type of VAR’s and their business models into 4 different categories and analyzed the data based on the Business Model by each category. The 4 categories of partner business models were:

  • Time and Materials or Traditional VAR
  • Managed Service Provider / Time and Materials Hybrid VAR
  • Solution VAR’s
  • Cloud Specialist VAR’s

Through this research and using VAR revenue and cost data, Monitor made the following key findings:

1) As not all VARs are the same, integrating Office 365 into VAR business models will vary – but can be done successfully across VAR business types.

2) VAR’s that do resell Office 365 can boost their operating margins, compares to reselling equivalent premise offerings or other cloud services.

3) Some VAR’s are successfully accelerating the sales process for Office 365 and other cloud services, cutting the sales time in half compared to using traditional, premise-oriented sales processes.

Sample First-Year VAR Economics for 100-Seat Office 365 Sale vs. Equivalent Premise Sale

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Take a look and download the full Partner Profitability Report on MPN - https://partner.microsoft.com/US/productssolutions/productsonlineservices/40178963

Additional Partner Office 365 Resources - https://partner.microsoft.com/US/productssolutions/productsonlineservices/exchangehosted

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