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Making Money & Building a Business Using Office 365

Discover the opportunities with selling the cloudPartner economics in selling Office 365 to SMBs

Today’s objectives

Build a strong Office 365 businessBest practices for selling the cloud to the SMB segment

Choose the business model that fits your needsReview of the Office 365 business models offered today

Choose the right model for you

Little to no capital costs

requiredFixed payment

structure

More predictable

revenue stream

Own the customer

billingSell as you do

today

Increased upsell and

attach opportunities

Advisor

Office 365 Open & FPP

Expansion of the Open Channel

Office 365 ProPlus

Government & Academic SKUs

Standalone SKUs(Exchange Online Plan 1)

Enterprise SKUs(E1 & E3)

More choice and flexibility for your customers

Power of choice by SKU and by channel

Office 365 Enterprise &Government

Office 365 University1

1-10 Advanced IT Needs11 - 250Home / K-12Student

Office 365 Small

Business Premium

Office 365 Midsize Business

Office 365 Home

Premium

Advisor

Office 365 SKUs

Key Customer Segments

Open

FPP

Thou

gh

Dist

ribut

ion

Note: 1For academic customers, the following SKUs will be available in the Open License, and OVS-ES program instead of Office 365 University: Office 365 ProPlus for Students, Office 365 ProPlus for Faculty, Office 365 Plan A3 for Student, Office 365 Plan A3 for Faculty

The path of opportunity for Office 365

Office 365 Licensing Revenue

Deployment & Migration Services

Managed Services and

Support

Add-on Projects and Solutions

Baseline Good Better Best

High

Low

Structure of Office 365 Deal

Reve

nue

$48-240 / seat

$40-120 / seat

$50-80 / seat

$40+ / seat

Note: Estimates are based on partner interviews so actual numbers will differ from market to marketAll revenue streams are re-occurring except for “Deployment and Migration Services”, which is a one-time event

• Help desk (i.e. Tier 1 / Tier 2 support)

• New user set-up• Updates• End-user training

• Expansion• Customization• LOB integration• IT infrastructure

design• IT planning• IT training• Upgrades & desktop

remediation• Assessment / planning

• Migration of data• Establishment of

service

= Recurring

Office 365 and the cloud lead to attractive deals

Note: Estimates use Office 365 Midsize Business SKU and are based on partner interviews so actual numbers will differ from market to market

Licensing Deployment & Migration

Annual Support Add-on Software Projects0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Office 365 Deal Economics - Open(Assumes a 60 Seat Customer)

Recurring One-Time

= Recurring

$10,800

$4,000

$4,000

$5,300

$9,250

U.S

. Dol

lars

What opportunities exist and why are they attractive?



Managed Services and

SupportAdd-on Projects and Solutions

Baseline Good Better Best

Structure of Office 365 Deal

Note: Estimates are based on partner interviews so actual numbers will differ from market to marketAll revenue streams are re-occurring except for “Deployment and Migration Services”, which is a one-time event

Other Products and Services

Bigger deals driven by easier upsell/cross-sellOffice 365 Licensing Revenue


Managed Services and Support


Office

Increased margins by leveraging reusable offerings

3rd Party Migration Tools

Takes the complexity out of the sale so you can focus on selling rather than deployingCan resell these tools to customers for a healthy marginDon’t need technical engineers to complete the process

Tier 1 Support

Support with a centralized set of employeesAble to scale resulting in improved profitability over timeCan easily address most problems remotely

End User Set-up and Training

Most SMBs will not have familiarity with some of the workloads in Office 365Most of this baseline information will be the same for all SMB customers

Sharepoint Templates

Build once and then resell the IP to other customersMany partners focus on templates for certain industriesCan sometimes lead to follow-up work around customizing it to fit a certain need / purpose

Standardized Services that Partners Sell Successfully Today





How have high-performing partners found success?Used a low-touch,

centralized sales and service modelCreated simple packaged offerings that are easy to sellChanged conversation to focus on the capabilities of cloud

Used a low-touch, centralized sales & service model

Invest in digital marketing to drive demand generation

Take advantage of remote service delivery

Incubate the Office 365 sales team from mainline sales team

Leverage tele sales and support with smaller customers

Created simple packaged offerings that are easy to sell




Simple “Per User” Price

+ + =$180 / user $65 / user $65 / user $310 / user /

year

$0.84User Cost / Day

$25.83User Cost / Month

$18.6KCost in 60 User

Company

24%of a Starbucks

37%of an avg. cell phone

bill22%

Cost of an IT Pro

• Explain the cost in the context of something that the customer can understand

• Highlight the simplicity and cost predictability that moving to the cloud provides

• Discuss the relative up-front cost of replicating the same functionality with an on-premise solution

Example:

Note: Estimates are based on partner interviews so actual numbers will differ from market to market

Changed conversation to focus on the capabilities of cloud “The Pitch”Target

Audience

Business Decision Maker

Be More Productive Anywhere

WorkBetterTogether

LookMoreProfessional

Simplify,But Stay in Control

Get Morefor Your Investment

http://www.gettyimages.com/detail/photo/designer-using-tablet-computer-royalty-free-image/134429246

Next steps

Join the Cloud Essentials / Cloud Accelerate programs

Learn more about building a successful cloud business (IDC Research & Office 365 White Paper)

In the next 60 days, attach at least one seat of Office 365 to an existing Open/FPP customer

Don’t forget to join the Office 365 Yammer group!

www.yammer.com/office365partners

https://mspartner.microsoft.com/en/us/Pages/Solutions/microsoft-cloud-solutions.aspx

https://readytogo.microsoft.com/global/Asset/Pages/Five%20Keys%20to%20Partner%20Success%20in%20SMB%20with%20Office%20365.aspx

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