Why Any MSP Billing $2,500/Month in Microsoft Should Be a Silver Partner
TL;DR
- Microsoft competencies are a reward program: earning Silver or Gold unlocks recurring kickbacks on your Microsoft spend.
- As of April 2019, if you manage at least $2,500/month of Microsoft, the Silver program is worth participating in.
- The Small and Midmarket competency requires only four net-new customers in a year plus the $1,670 Silver fee.
- A 6% kickback on $3,750/month of spend returns $2,700 a year, a net $1,030 after the fee, before any other accelerators or free licensing.
- Competency membership also includes free internal-use licensing and additional kickbacks on Azure and Dynamics.
Most MSPs treat Microsoft competencies as a badge for the website. They are actually a kickback program, and as of April 2019 the math is hard to argue with for any partner managing a meaningful book of Microsoft seats.
This post runs the numbers on the lowest-effort competency under Silver and shows why the $1,670 fee pays for itself. For the full reference covering every program, free licensing, and Partner Center navigation, see the Microsoft competency guide (opens in new tab).
What competencies actually pay
A competency demonstrates that your organization is delivering more Microsoft solutions and meeting the technical requirements to support clients. The reason to care is the money: Microsoft pays partners to keep growing in this space. The two programs worth discussing are Silver and Gold, and the kickbacks below apply to both.
Our rule of thumb: if you manage at least $2,500 of Microsoft per month, you should be participating in the Silver program. If you are not there yet, these programs may not be for you.
The baseline scenario
Walk through a realistic small MSP.
- You sell O365 Business Premium to most of your customers
- You have 25 customers with 15 seats each
- You work with a distributor at 12% margin off the $12.50/seat MSRP, so your cost is $10/seat
- Monthly Microsoft spend: $3,750 ($10 x 25 x 15)
Now earn the competency:
- The easiest competency under Silver is the Small and Midmarket competency
- It takes 4 net-new customers to Microsoft during the year, plus the $1,670 Silver fee
- You earn it and now receive an additional 6% kickback on all your spend for the year, plus an additional 2% on new customer adds
Looking only at the 6% kickback, you net $1,030 a year ($2,700 minus the $1,670 fee)
That is $3,750 x 12 x 6% = $2,700 a year, minus the $1,670 fee. It is not a fortune, but it is a simple example that jumpstarts the returns you make from Microsoft as your business grows, and it does not include the free internal-use licensing that comes with these programs.
The bigger incentive items
The 6% baseline is the floor. The top-paying incentive items pair with Microsoft's fastest-growing subscriptions.
What the full guide covers
We highly encourage working through the complete guide, which explains:
- The financial kickbacks from Microsoft on a yearly basis
- The different competency programs and how to achieve them
- The free licensing you receive as part of these programs
- How to navigate Partner Center to make sure you are actually being paid
Frequently asked questions
What is the easiest Microsoft competency for a small MSP to earn?
As of April 2019, the Small and Midmarket competency under Silver. It requires four net-new customers to Microsoft during the year and payment of the $1,670 Silver fee, with no advanced technical exams attached.
Is the Silver fee worth it for a small MSP?
If you manage at least $2,500/month of Microsoft, yes. On a $3,750/month spend the 6% kickback alone returns $2,700 a year, netting $1,030 after the $1,670 fee, before accelerators or free internal-use licensing. Below that spend level, the math is closer and these programs may not be for you yet.
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Written by
Nick Ross
CEO · Microsoft MVP · Founder, T-Minus 365
Nick is not just a CEO, he's a respected thought leader and influencer in the MSP space. Tens of thousands of MSPs learn through his YouTube channel, T-Minus365. Nick has been honored as a three-time Microsoft MVP for his educational content; his expertise and influence are the backbone of our mission, ensuring that you are in the best hands when it comes to security.
Nick joined Pax8 in 2017, where he would ultimately oversee product management for PSA and Microsoft integrations. Following his tenure at Pax8, Nick has continued to demonstrate his leadership prowess as an executive at various MSPs, culminating in his most recent role at Sourcepass.
Nick holds a Bachelor's Degree in Business Management from Florida State University, as well as a Minor Degree in Entrepreneurship. In his free time, Nick is an avid hiker, reader, and fitness-junkie.
