THE

CLOUD
SOLUTION
PROVIDER
BIBLE
Your Guide to Understanding
Microsoft’s CSP Program
 TABLE OF CONTENTS
WHY YOU CAN’T IGNORE THE CSP 3

What is the CSP Program? 4

WHAT Products Are Available in the CSP? 5

How the CSP Program Will Change Your Business 9

The Difference Between CSP Direct and Indirect 11

Which Model is best for you? 12

Four Keys to Success 14

GETTTING STARTED AS A CSP PARTNER 16

FREQUENTLY ASKED QUESTIONS 17

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WHY YOU CAN’T
$500 billion
IGNORE THE CSP
There’s no getting around it. The cloud has
will be spent in the greater cloud
market by 2020
become part of the new business landscape. And IDC FutureScape: Worldwide Cloud 2016 Predictions — Mastering the
Raw Material of Digital Transformation, doc #259840, November 2015
it shouldn’t surprise you to learn that it’s only going
to get more popular as time goes on. If you want
to stay current and keep your business growing,
you’ll have to adapt. Have you started looking at
your options? As a Managed Service Provider (MSP)
80% OF
or Value Added Reseller (VAR), you might find the
cloud a bit daunting at first. Don’t worry. There are
many ways to get things moving. BUSINESSES
One way to become your customer’s most are deploying or fully embracing
trusted advisor is to embrace tried and true the cloud today
methods. In other words, don’t start with a blank

TWO-THIRDS
sheet! Surely you’ve heard about Microsoft’s Cloud
Solution Provider program (CSP). This guide will
help you clear up all the questions you might
have after hearing that tongue-twister! And, if you’re
stumped for ideas, SherWeb will help you explore
your opportunities in the cloud! The CSP program
of Global 2000 CEOs have
will help you adapt and evolve your business Digital Transformation in their
so you can own the end-to-end relationship
with your clients and still leverage products
corporate stratEgies
that are known, wanted and needed by small
business owners. Cloud Partners outperform their
We can’t stress this enough. Microsoft’s CSP peers by:

2.0X
program can help you drive stronger customer
relationships and engagement, increase your
profitability and streamline your revenue and on growth

1.5X
growth for years to come. And you don’t have
to start from scratch. We bet you have a lot of
questions. You want to know how this program on gross profit
works and what you’ll need to get started. What
kind of profits can you earn? Can you get help
when you need it? Just keep on reading. You’ll
find the answers to all these questions and more!
1.8X on recurring revenue
Ref: Part 1: The Booming Cloud Opportunity. An IDC eBook, sponsored
by Microsoft

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 WHAT IS THE
CSP PROGRAM?

As we mentioned earlier, the CSP, or Cloud Solution Provider program, is an initiative set up by
Microsoft. The CSP lets you set your own prices and profit margins for reselling Office 365, Dynamics
365 and Azure, three of Microsoft’s most popular products. The program has no restrictions regarding
company size, location or your level of competence. In other words, your cloud business can join
from anywhere in the world and with any number of employees, even if you’re a newcomer to cloud
solutions.

Here’s how Microsoft defines the CSP Program:

“ The Microsoft Cloud Solution Provider program
enables partners to directly manage their entire
In other words, the CSP is a way for partners
to resell Microsoft products by working with
Microsoft cloud customer lifecycle. Partners in this Microsoft directly, or going through a trusted
program utilize dedicated in-product tools partner that is already a member of the CSP
to directly provision, manage and support their program. These two options are called Direct
customer subscriptions. Partners can easily and Indirect CSP. We’ll talk more about that later!
package their own tools, products and services
and combine them into one monthly or annual
customer bill. ”
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 What Products Are
Available in the CSP?
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Everyone knows about Office 365. It’s a set of Microsoft Office applications
that includes Word, Excel, PowerPoint, Outlook and OneNote. But it also
“Everyone needs
has other services such as Exchange for business class email, online email. Everyone
storage with OneDrive and Skype for Business. With Office 365 you get
the full, installed Office experience on PCs, Macs, tablets and phones, uses documents
all synced together, no matter where you are. There’s no doubt about it.
This product is the corner store for modern business. As a CSP program
during their
subscriber, you get to build offers by moving your clients to the cloud with workday. This
Office 365.
makes your
Take advantage of this opportunity to transform your business and develop
monthly recurring revenue by offering value-added services for Office 365
such as business consulting, integration work and app development. Don’t
strategy simple. ”
forget about the managed services you can offer your clients under the
CSP, such as support and deployment. Because most of your potential
customers already know Office and need it to run their business, you can
use it to draw attention to your services. Everyone needs email. Everyone
uses documents during their workday. This makes your strategy simple:
Go in, get the client talking and sell Office 365. Build a relationship based
on trust. The door is now open for you to upsell the client to any other
services you offer, whether they’re your own or a third-party product.

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Microsoft Azure is a growing collection of integrated cloud services,
such as analytics, computing, database, mobile, networking and
“WONDERING WHICH
storage. Azure supports the broadest selection of operating systems,
programming languages, frameworks, tools, databases and devices.
OPTION WILL WORK
It’s a leader in infrastructure and a lot of businesses rely on its services FOR YOU? YOU DON’T
for their day-to-day computing. As a CSP partner, you have two
choices to integrate Azure into your business: HAVE TO CHOOSE. YOU
• Add Azure to your offering
CAN DIFFERENTIATE
• Wrap your managed services around Azure YOUR BUSINESS WITH
Most people start by reselling Azure. This allows you to resell other YOUR OFFERING AND
services such as VMs, backups or data, which are all valuable items to
add to your portfolio. Under the CSP, you can even sell these services
MANAGED SERVICES
as a white-label offering. If you already offer Infrastructure-as-a-Service AND QUICKLY
you can decide to provide a hybrid experience, such as doing develop-
ment tests with Azure on your own environment. Take advantage TRANSFORM AZURE
of Azure’s hyperscale presence and use its 24 worldwide locations
as a backup for your clients’ data.
INTO MORE PROFITS. ”
Branch out into different kinds of offerings with Azure’s integration
of Visual Studio Online. You can manage the complete application
lifecycle for your customers.

Technical support is probably the easiest managed service you can

offer. Provide your clients with a premium support experience and
uptime SLAs for the applications they run in the cloud. You’ll set
yourself apart from the competition. Familiar with data migration?
Offer your clients migration services to the cloud, either as a lift and
shift or as a virtualization platform. You’ll be providing them with all the
speed, agility and scale that the public cloud has to offer. Looking for
other possibilities? How about infrastructure, application performance
or database monitoring on top of Azure?

Management services, such as patching, updates and user

configuration monitoring is a great way to relieve your customers
of several administration headaches. Azure will let you offer deep
security and endpoint protection to optimize their environment.

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 “LOOKING FOR MORE
Dynamics 365 combines the capabilities of CRM and ERP into a
“EARNING
OPPORTUNITIES TO
INCREASEMICROSOFT
YOUR
single application that can be used for sales, customer service,
field service, operations, financials, marketing and project service
COMPETENCIES
REVENUE? CONSIDER
Dynamics 365 combines the capabilities of CRM and ERP into
automation. GOES A LONG
MANAGED SERVICES
a single application that can be used for sales, customer service,
field service, operations, financials, marketing and project service
As a CSP Partner, you can resell Dynamics 365 and transform this
WAY IN BUILDING
LIKE TRAINING AND
automation.
into revenue and more profits for your cloud business. Microsoft YOUR PROFILE
SUPPORT OR EVEN
offers rebates and discounts for partners, which allows you to buy
As a CSP Partner, you can resell Dynamics 365 and transform this
licenses at a lower cost and make a profit on every sale. You can
AS A DYNAMICS
PROFESSIONAL
into revenue and more profits for your cloud business. Microsoft
also make easy money by offering services such as data migration 365 RESELLER.
SERVICES SUCH
offers rebates and discounts for partners, which allows you to buy
or deployment for your Dynamics 365 projects.
licenses at a lower cost and make a profit on every sale. You can YOU CAN STILLOR
AS ADVISORY
SELL DYNAMICS
BENCHMARKING
”
also make easy money by offering services such as data migration
Whichever services you choose, you’ll be strengthening your
or deployment for your Dynamics 365 projects.
relationship with your customers and building up your
monthly revenue!
WITH AN INDIRECT
Looking for more opportunities to increase your revenue? Consider CSP PARTNER
managed services like training and support or even professional
services such as advisory or benchmarking. Whichever services AND EARN YOUR
you choose, you’ll be strengthening your relationship with your COMPETENCIES AT
”
customers and building up your monthly revenue!
THE SAME TIME.

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How the CSP Program Will
Change Your Business
Be prepared. If you embark on this journey without knowing what to expect, you’re just setting yourself
up for trouble. We’ve seen many MSPs and VARs stall or fail simply because they weren’t properly
equipped for the ride.

Do your research. Take a hard look at your business and decide what you have to do to succeed.
SMB owners rarely have the time to give the proper attention to their daily tasks, which usually includes
everything from accounting to customer relations to marketing and sales. Going solo on your cloud
journey can be tricky. By joining a solid partner program, you can skip ahead and jump into the action
right away. Forget the small details. Use your provider’s knowledge and tools to start growing and
profiting right away.

A QUICK WAY TO INCREASE YOUR PROFITS

It wasn’t too long ago that people were reluctant to move to the cloud. Fast forward a few years and
the situation has changed dramatically. Bad experiences with hardware or fears of losing data have
convinced a lot of business owners that the cloud is important. Companies are now spending more of
their budget on IT. A recent study by IDC Research has shown that more than 90% of businesses are
either evaluating, adopting or embracing the cloud. Only 8% of those surveyed claimed they weren’t
interested. That’s a big shift from the 21% who made that claim in 2014!

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 Today
AVERAGE IT BUDGET DISTRIBUTION OVER THE NEXT 2 YEARS In 24 Months

10.5

13.6% 8.9% 9.6%

10.5% 5.5% 6.1%

Public On-demand Dedicated

Cloud Hosted Public Cloud Hosted Public Cloud

10.5

16.3% 7.8% 40.7%

21.4% 10.9% 48.8%

Traditional Entreprise Traditional

Outsourced Private Cloud In-house Deployment

Source: IDC CloudView Survey, 2016, n=11350

Generally speaking, most IT partners will provide a service based on a client’s request. Since the
majority of clients want to migrate their data to a more secure environment, it is critical that partners
find solutions to this problem and deploy them quickly.

The CSP can help you launch your business and address your clients’ IT needs faster and easier
than you could as an independent provider.

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The Difference Between
CSP Direct and Indirect
CSP Direct Customers

CSP Indirect Partners Customers

Direct CSP Partner Indirect CSP Partner

As the name implies, resellers who opt for the Direct On the other hand, if you work as an Indirect Partner,
CSP program will work directly with Microsoft. They’ll the whole process is a lot easier. You can cut through
purchase all their SKUs from Microsoft and sell them the red tape and be ready to go to market a lot faster.
to their customers at a profit margin of about 20 You can buy all your SKUs from the CSP distributor
percent. Reseller who opt for this program usually and sell them to your clients at the profit you choose.
have the resources required to handle their customers’ You don’t have to be a migration or support expert.
needs because Microsoft offers very little in terms of Some CSP distributors offer professional partner
technical support. However, going solo as a Direct support and white-label services that you can use
CSP Partner is a complicated process that could take to grow your business. They’ll give you access to a
about four months to complete. Direct CSP Partners business portal plus business guidance and flexible
must also meet the following requirements: rates and terms.

• Be capable of providing 24/7 technical support As an Indirect Reseller, you deal with your CSP
• Have a solid customer billing structure Partner and not Microsoft. You can also rely on your
• Commit to selling a minimum of 5,000 new Office partner’s experience and infrastructure to do most
365 seats every year
of the heavy lifting. This scenario is by far the most
• Maintain at least one Microsoft Gold Productivity
popular, accessible and the fastest way to go to
Competency
market. It’s a great option for resellers:

You have to be sure the commissions you earn as

• You can ramp up quickly
a Direct CSP Partner exceed your initial expenses. If
• You can focus on your investment
you decide to work directly with Microsoft, you’ll need
• You can evolve at a slower, more controlled pace
a Microsoft Partner Network ID number (MPN). Then,
• You can take advantage of your partner’s
you’ll have to apply for a Microsoft Live ID. To qualify,
services
you have to meet the billing and support requirements
we referred to earlier.

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 MICROSOFT EXPECTS

80% - 90%
OF CSP SUBSCRIBERS
TO BECOME INDIRECT
PARTNERS.
Which Model Source: Microsoft Partner
Network website

is best for you?

Direct or Indirect?
This question can be daunting if you don’t know where to start. By purchasing from an Indirect Provider,
you get a renowned mentor who can collaborate with you for customer support and billing. This model
is great for businesses that want to focus on strengthening their cloud service offerings and invest more
gradually in support and billing capabilities. Most MSPs or VARs rarely have the time, capital or resources
to sell directly with Microsoft.

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When Direct is a Better Option Why Go Indirect
If you’d like to be a Direct reseller, you’ll have to As an Indirect Reseller, you get the infrastructure
provide 24/7 technical support and be able to bill your you need to sell through the CSP. You won’t have to
customers directly. Direct resellers usually have the worry about set-up costs because your CSP
necessary tools in place or are ready to make the provider has the systems and infrastructures in
substantial capital investments required for their place to provide this level of support. This gives
business to become successful in the long term. you more time to focus on your customer offerings
and grow your business.
What You Need
As we already mentioned, Direct Partners run their Questions to Ask Your Potential CSP Distributor
own show. Make sure you’re set up to provide the
following: Services offered by Indirect Distributors vary.
Take a close look at the providers in your area to
Billing and Invoicing
determine which ones suit your needs. Make sure
You set the payment terms that are right for your
you get answers to these questions:
business and create the cash flow model you’re
looking for. You’re free to choose the billing systems
• Does the distributor offer technical support?
and software you want to facilitate your customer
• Will they market your products and services?
billing relationship. You’ll also prepare and send
• Do they offer data migration?
invoices to your end customers and maintain
• Do they establish financing and credit terms?
payment receipts.
• Will they help you grow your business?
Support • Do they sell additional products and services?
You’re responsible for end-customer support.
Direct Partners have to design a go-to-market strategy
to sell Microsoft cloud services and support managed
services, add-on projects and additional services. Kentucky MSP Increases
Incentives Productivity with CSP
As a part of the CSP Program, you’re eligible for

“THERE’S NO DOUBT OUR

Microsoft’s program incentives and funds. To be
admissible for the incentives, you have to meet
the following criteria:

• Be an active Microsoft Partner Network (MPN)

TECHNICAL STAFF IS EASILY
member SPENDING 20% LESS TIME
• Have a valid Cloud Distributor Agreement for
Distributors and/or a Reseller Agreement for
DEALING WITH EXCHANGE-TYPE
Resellers ISSUES. IN A GIVEN MONTH, WE’RE
• Be a Managed Partner on Microsoft’s FY16
Managed Partner List
EASILY SAVING A 40-HOUR WEEK
• Be enrolled for incentives before the end of the OF MANAGEMENT TIME SPREAD
fiscal year
Licensing
You’ll have to manage your licenses manually
ACROSS OUR TECHNICAL STAFF.
”
through the Microsoft Partner Network Center Mike Hopkins, President of
rather than provisioning them through your DEVsource Technology Solutions
provider’s partner portal.

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Four Keys
to Success

As an Indirect Reseller, all you have to do is set

aside time and money to build your offers and start
your marketing strategy to get your business off the

ESTIMATE
ground.

On the other hand, if you want to become a

YOUR
Direct Partner, you will have to invest more capital
in your infrastructure and the requirements we
mentioned. You’ll have to assess your current
structure, redefine your business model and

INVESTMENT available capital in order to define your current

solutions and see where you need to expand.
Remember, the Direct model is designed to fit the
reality of bigger business. Only 10-20% of enterprises
will be able to take this path.

The CSP Program is a great opportunity to

differentiate yourself from most VARs and MSPs
in your region. Your strategy should focus on why
your customers should do business with you.

•

What can you offer your clients that
other resellers can’t? DEFINE YOUR
DIFFERENTIATOR
• What makes you more relevant than
your competitors?

Your differentiator should be unique to your business

and will depend on your business model and the
products you sell. You should also consider the
type of services you’ll be offering.

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 In the Products section, we talked about

build your
different strategies for bundling and packaging
your offers. Take your pick and think hard about
what your clients need from you, what you are

Offers willing to provide and how. Your offerings will

be the base you’ll use to build your business
and be successful.

Marketing is a lot of work, but you should at least

know the basics to get your message across.
The important part is to leverage any marketing

get your
strategies you can, measure your efforts and see
what works for you! Marketing is a big factor in
business success. When it’s time to evaluate your

marketing
business, make sure you have at least a couple of
marketing tactics up your sleeve. If you’re currently
in search of a distributor for reselling indirectly,
make sure that you partner with someone who
cares about your success. You need to access
marketing material and make sure there are sales
reps available to help you close more deals.
going
Some Indirect Providers also have white-label
material and campaigns in a box that you can use
to get started.

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Getting
as a CSP Partner
Started

So, ready to take the plunge? We know it’s not always easy to make adjustments to your business plan.
You’ve already read about the Direct and Indirect models and chosen which option is best for you.
Now, it’s time to get started. Don’t be afraid of change. Kodak, RIM, Nokia and Blockbuster are all
perfect examples of businesses that failed to respond to a changing world, and they probably had
more resources than you do. Embrace the change and seize the opportunity. Where do you start?
It’s quite easy. Follow these 3 steps and then read on for more details.

1. Start 2. Grow 3. Optimize

Did you know that 60% As you gain visibility and Analyze what you did, where
of partners have been selling success, ramp up your cloud you failed, and most importantly
some kind of cloud offer for at efforts accordingly. Don’t stay where you succeeded. What
least 3 years? Jump in and start in one place. Make sure you did you do right? What are
selling cloud solutions and can always keep growing other partners doing - good or
services immediately. Falling and answer more prospects’ bad? Double down and extend
behind shouldn’t be an option! requests. Staying in one spot your lead on other solution
Planning incessantly should won’t help your business. providers who are still trying to
never be a substitute for real figure out their cloud game plan.
work.

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Frequently
Asked
Questions

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 What do I have to do to Partners participating in the Cloud Solution
Provider program will be required to provide
participate in the Microsoft the following:
Cloud Solution Provider • Customer support – Partners will be
program? responsible to provide their customers
with technical support. Your support
offering should meet industry standards
for availability and response time.

• One invoice – Partners will be responsible

for billing their customers for Microsoft
Cloud Services. Customers want a single,
straightforward bill for all the cloud services
they consume.

Although it’s not a requirement, many partners

will offer project implementation or managed
services in addition to their own add-ons or IP.

IP is defined as any customized service

resellers develop for their clients, such as
reactive help desk support or performance
and application troubleshooting.

There are two main paths to become a CSP

reseller:

Indirect – For partners who want to invest

gradually in developing the systems, tools,
and staff needed to take full advantage of the
cloud. CSP Distributors can provide help with
value added services, support and billing.

Direct – If you already have support and billing

capabilities, or are willing to invest in the
necessary tools, it might make sense for you
to work directly with Microsoft. If you already
work with a local Microsoft Partner Manager,
ask them for more information.

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 What are the benefits IDC forecasts revenue for worldwide public
IT cloud services will reach $141.2B USD by
of the CSP? 2019, which translates into a 19.4% compounded
annual growth rate. This is almost six times the
rate of overall IT spending growth!

The CSP makes it easy to build a managed

services business with Microsoft Cloud Services
and provides an opportunity to build monthly
recurring revenue.

What kind of investment New investments will vary based on your current
practice. Areas to consider:
is required?
• Support personnel and the technology needed
to adequately service customers
• Ability to bill customers on a monthly and/or
annual basis and provide billing and technical
support in the local language
• Local tax implications of selling a
subscription product versus a service
• Adjustments to your sales incentive programs
to reflect monthly revenue recognition
• Management of credit risk and
collections

How does THE CSP Customers find it easier to purchase partner

tools, products, and/or services with their sub-
benefit customers? scription in one predictable monthly bill. Beyond
the fundamental benefits of the cloud, custom-
ers will have more frequent partner interactions
which can only strengthen the relationship.
Studies show that 67% of customers
expect to purchase a wide variety of
cloud services from a single vendor and 84% of
customers want to establish a trusted relationship
with a vendor as their Cloud Service Provider*.
*IDC Successful Cloud Partners 2013, IDC Buying Into the
Cloud 2014, 2014 Forrester TRUE Brand compass

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 How does this affect How you sell Microsoft Office 365, Microsoft
Dynamics 365 and Microsoft Azure won’t change.
the way I sell today? This is simply one of the business models that
partners can consider when selling Microsoft
cloud subscriptions. If you have the resources
to manage the customer lifecycle, this model
may be a great fit for your business.

Are there any Partner Yes. The CSP Incentives reward Cloud Distribution
partners for driving the activation and enabling a
incentives available in resale channel and the sale of Online Services.
the CSP? The CSP 1-Tier and Indirect Reseller Partner
Incentives are designed to support partners
in the initial stages of building Cloud Solution
Provider practices.

What does it mean to have Microsoft Azure is an open and flexible cloud
platform that enables partners to rapidly build,
Microsoft Azure as part deploy and manage secure applications at scale,
of the Cloud Solution on-premises, in the cloud, or both. Bringing Azure
to CSP enables partners to capitalize on the
Provider (CSP) program? Azure opportunity. Partners own the end-to-end
customer lifecycle with direct provisioning, billing
and support of Microsoft’s cloud services.
Partners are now able to transact the license
along with their services to customers.

How is the Microsoft Azure Microsoft Azure is sold as a pay-as-you-go

service and billed in arrears. This means that
business model different customers or partners set up a new Microsoft
from seat-based services Azure service under a Microsoft Azure
subscription and consume resources against
like Microsoft Office 365 those services during the month. At the end of
or Enterprise Mobility Suite the month, Microsoft will bill the CSP partner
for the consumption of those Microsoft Azure
in CSP? services at the relevant rates.

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 I have a lot of customers It is possible for a reseller to have subscriptions
under several agreements at the same time. If
under an EA, Open and Advisor you have customers in other Microsoft licensing
agreement – can they also programs, such as EA, Advisor or Open, you can
easily transfer them to the CSP through a new
purchase subscriptions from multi-channel feature. You don’t have to create
me as their Cloud Solution a new tenant or do a full migration for each
conversion. Take note that Microsoft’s Advisor
Provider? How do I move them program officially ends on July 1, 2017.
into this program?

What are my risks? As a partner, you own the billing relationship

and assume the responsibility for credit and
collections with your customers. Since you
directly provision, monitor and manage the
subscription, customers will contact you with
related provisioning, help and how-to questions
as well as all issues related to technical
support. You must be able to provide
quality 24/7 end-user support.

How does the Microsoft Microsoft offers a financially backed 99.9%

service uptime guarantee for Office 365. This
Office 365 Service Level translates to about 8 hours of downtime a year.
Agreement (SLA) work? A full copy of their Service Level Agreement
can be found here.

Approved service credits are provided to you

and it’s your responsibility to pass these service
credits to your affected customers. Note that
Office 365 offered by SherWeb is hosted and
owned by Microsoft and their SLA applies.

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 What are my revenue You will have access to a wholesale price
list that enables you to take advantage of
opportunities in the upfront margins at the initial sale and with
CSP model? every subsequent renewal. You have the
opportunity to attach the initial deployment
and migration services, ongoing maintenance
and support to every subscription. Many partners
develop their own add-ons which they sell as
additional services or IP.

And because of your ongoing customer

relationship, when a customer has questions
or wants to make a change in their subscription,
you will have a greater opportunity to drive
adoption services, customization, and upsell.
You can also consider financing customers’
initial deployment and migration services
to spread upfront costs in exchange for a
long-term commitment for ongoing
managed services.

Yes! As a member of the CSP Program, you

What if you’re already can choose to go Direct for some products
a Direct Partner? and pick other products to be sold through
Can you use a distributor’s a tiered system with an Indirect Provider.

service? This makes it easier for Direct Partners to offer

a wider variety of products without deploying
new infrastructure for every product line.

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About SherWeb
SherWeb has nearly two decades of experience
simplifying the cloud for MSPs. Today, more than 5,000
partners worldwide rely on our expertise in high-volume
provisioning, migration and support. SherWeb is an
Indirect CSP partner in Microsoft’s Cloud Solution
Provider (CSP) program. This allows SherWeb
to help partners go to market faster with Office 365.
You own the customer relationship, control the pricing
and billing and set your own margins.

THE CLOUD SOLUTION PROVIDER BIBLE:

is published by SherWeb Inc. Content from this publication may only be
reprinted with written permission and when credit is given to SherWeb.

The information in this document is based on best available resources

at the time of its publication. Opinions reflect judgment at the time and
are subject to change.

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© 2017, SherWeb Inc.