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Dynamics 365 Licensing for SPLA

Over the past several weeks, I’ve received several inquiries around Dynamics 365 what it means for CRM SPLA partners.  In this article, we will review the changes and when the changes will take effect.

Dynamics 365 for SPLA

In today’s SPLA licensing model, there are three products available –  CRM Essential, CRM Basic, and CRM Professional.  All come with different functionality and all come with different price points.  Those products will remain up until your agreement expires.  As with other products, once your agreement expires, you should report or license the new products.  In some cases, you are allowed to downgrade and run previous versions, but you must report the latest and greatest.  As an example, SQL 2016 is the latest edition of SQL, but that doesn’t mean you have to deploy SQL 2016; you can run 2012 or 2014 or God forbid 2008.  However, once you sign a new SPLA, you must follow the terms in the SPUR at the time of signing.  In this example, even though you deployed 2008, doesn’t mean you can license SQL 2008 by processor, you must still report it by core.  Dynamics CRM works the same way.   With Dynamics, the new products are Dynamics 365 Sales, Customer Service, and Team Members.  All come with bells and whistles and all come with higher pricing.  If you have an active SPLA prior to the announcement (November, 2016) you can continue to report the old products up until your agreement expires.  Once you sign a new agreement, you must report the higher priced products.

What are the options?

I’ve worked with a couple of Dynamics CRM hosters who had their agreement expire two months after Microsoft made this announcement.  In other words, Microsoft announced these changes in September (give or take – most widely known to resellers and partners in November) but their agreement expired in October.  The poor CRM providers are really in a pickle.  Microsoft dropped the bomb on them and two months later their pricing almost doubled!  What are they supposed to do?  Blame their reseller? Sure.  Everyone does.  Blame Microsoft?  Yes.  But that only gets you so far.  Cry?  Always.

Microsoft made some adjustments and offered “transition pricing”.  Transition pricing allows SPLA partners who have an active SPLA prior to November, 2016, the ability to report lower transition pricing up until their agreement expires.  The transition pricing is lower than new pricing but still doesn’t offer much of a discount.  When your agreement does expire, Microsoft will force you to license the under the new licensing and pricing model.

My Opinion

In my opinion, CRM provider are the old Exchange provider.   When Office 365/BPOS came about, small Exchange providers found it very difficult to compete.  It wasn’t just from a licensing perspective but also managing and deploying Exchange became too costly.  What happened?  Smaller Exchange providers are now CSP or out of business.  Dynamics CRM is now the old Exchange.  Microsoft is not going to lower SPLA pricing for Dynamics CRM.  It is not in their best interest to do so.  Harsh reality?  Yes.

Allow me to put on my Microsoft hat. What do you do?  There’s a couple of ways to think about it.  On one hand, Dynamics 365 isn’t all that bad.  I do think Microsoft rushed to market with the product.  I also think there are ways to up sell customers into the latest product.  There are opportunities to offer Dynamics CRM and deploy CRM and manage CRM.  For many organizations, CRM is the lifeblood of their sales.  CRM goes down, it’s bad for their business.  In speaking to a colleague, the LinkedIN acquisition makes Dynamics 365 an interesting proposition.  If you are able to seamlessly host Dynamics 365 on your platform and integrate their LinkedIN contacts as well, there could be a compelling reason to transition to the latest and greatest.

Ok, now my Microsoft hat is off.  I think Microsoft should be more patient and lengthen the transition pricing to make it more compelling for CRM hosters and to their customers.  I think service providers are the bread and butter to Microsoft hosted offerings.  SPLA is the one program that differentiates Microsoft v. Amazon v. Google.  Thirty thousand service providers worldwide who are willing to host Microsoft technology.  You don’t want to abruptly interrupt their business.  After all, no matter if they get Dynamics from a Microsoft datacenter or from a partner, Microsoft wins.  Amazon can’t say the same thing.

Would love to hear comments.  You can email me at info@splalicensing.com or leave a comment below.

Thanks for reading,

SPLA Man

 

 

 
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Posted by on May 9, 2017 in Dynamics 365

 

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Two heads are better than one!

We all know Amazon. What was once known as an online bookstore has transformed into an online behemoth of hosted services. What’s interesting about Amazon, like Microsoft and others, is they leverage strategic partnerships to grow their business. Microsoft does this through the partner channel (you, me, and others). Amazon, because they are in several industries, is a bit more unique. I read an article recently on how Amazon is going after consumer products. According to the Wall Street Journal, they established alliances with companies such as Proctor and Gamble to lower shipping costs, establish warehouses, and deliver goods to the end customer more quickly then doing it on their own. What they are doing is setting up shop inside Proctor and Gamble’s warehouses, thus reducing the cost of storing and transporting their goods. This program is called “Vendor Flex.” This is a great way to compete against the Wal-Mart’s of the world. Watch out grocery stores, Amazon is knocking on your customers door! (literally) In the end, Amazon recognizes where it is strong (e commerce) and utilizes partners where it lacks resources.

Microsoft is placing a big bet on hybrid cloud environments (big surprise..right?). They already have strategic partners with AT&T and the like to build out diverse scenarios, but they are also leveraging their biggest licensing program, the Enterprise Agreement (EA) to gain market share.  I won’t divulge into the Enterprise Agreement, you can read about it via the Microsoft website, but they are going after this group with a vengeance.  They took Office 365 and made it into a billion dollar business by leveraging partnerships and will do the same with Azure. They created incentives for system integrators to deploy it, had resellers promote it, and utilized their own licensing agreements to sell it.

I used to manage Office 365 (at the time BPOS) on the reseller side. I thought this was the perfect program for small companies that do not have the resources to manage an infrastructure. In a way that’s true, but I underestimated how larger companies can leverage hosted solutions. They utilize their existing volume licensing agreement and have certain departments off premise while others on premise. For companies that do not have the resources to configure it, they can use the partner channel to deploy it. Microsoft turned around Office 365, they will do the same with Azure, all the while leveraging their partners.

If players like Microsoft and Amazon have strategic alliances…shouldn’t you? Does your partner offer the resources you need to succeed or are they just less expensive? Do you have a white labeling program or consider white labeling yourself? How are you leveraging SPLA? Have you reached out to your vendors for support? How does your SPLA reseller help? If interested, you should attend the Microsoft Hosting Summit or attend Hosting Con, where resellers and partners connect. Check it out for yourself http://www.hostingcon.com. Reach out to me, I can help too! Maybe in the end I’m right, two heads can be better than one!

Thanks,

SPLA Man

 
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Posted by on October 16, 2013 in In My Opinion

 

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