Stacking Three Microsoft Incentives to Reach 47% Margin on New 365 Seats
TL;DR
- As of April 2019, three Microsoft partner incentives reward the same action: net-new customers moved to Office 365 or Microsoft 365.
- The Shift Campaign adds 15% margin for one year on net-new M365 Business seats or E3 upgrades, ending May 31, 2019.
- Silver Competency adds up to 20% margin through global and accelerator kickbacks after four net-new customers and a $1,670 fee.
- Sky's the Limit pays up to $3,500 per customer with no monetary commitment to enroll.
- Stacked on six 10-seat M365 Business customers, the three programs reach roughly 47% margin plus a $1,000 Sky's the Limit payout.
Microsoft wants its partners to move customers to the modern workspace, and as of April 2019 it is willing to pay three separate ways for the same outcome. The trick most MSPs miss is that the three programs are not alternatives. They reward the same action, net-new seats on Office 365 or Microsoft 365, so the payouts stack on a single set of customer adds.
This is a walkthrough of all three programs, the eligibility details, and the worked math that gets a typical MSP to roughly 47% margin on a batch of new seats. For the full reference, see the complete Sky's the Limit guide (opens in new tab).
The Shift Campaign: 15% for a year on cloud moves
The Shift Campaign (opens in new tab) is the simplest of the three.
- Applies to net-new seats on Office 365 Business Premium
- Applies to upgrades from an existing Office 365 plan to a Microsoft 365 Business SKU
- Pays an additional 15% margin on top of your normal CSP margin for one year
- Offer ends May 31, 2019
The ideal candidates are clients with hardware renewals coming up, organizations that need to move to the cloud for compliance and security reasons, and customers adopting Exchange Online. M365 Business is the standout for any client looking to decommission on-prem infrastructure: Intune replaces Group Policy and Azure AD replaces AD DS.
Silver Competency: up to 20% from kickbacks
Think of competencies as a reward program. Earning one demonstrates that your organization is delivering more Microsoft solutions and meeting the technical requirements to support clients. For the full breakdown, see our Microsoft competency guide.
The path through Silver:
- Earn the Small and Midmarket competency
- Acquire 4 net-new customers
- Pay the $1,670 fee
- Program ends July 31, 2019
The kickbacks that follow:
- 6% margin on 365 products as a Silver partner
- 2% on CSP customer adds in Global Accelerators
- 2% on global strategic products such as M365 Business
- 10% on local accelerators for M365 Business customer adds
Stacked together, Silver adds an additional 20% margin to your seats.
Sky's the Limit: cash per customer, no commitment
Sky's the Limit (opens in new tab) is an incentive to move more seats to 365, paid as cash rather than margin.
- All-Up Customer Adds target: new O365 customer adds (any eligible SKU, any seat count)
- 50-or-Greater Seats target: new O365 customer adds (any eligible SKU, seat count over 50)
- No monetary commitment to enroll
- Maximum payouts of $3,500 per customer
Worked example: six M365 Business customers
The common theme across all three programs is net-new customers to 365. Here is the math on a single realistic scenario.
Business scenario: bringing over 6 net-new customers to the M365 Business plan with 10 seats per customer.
- Billed revenue for the year: $14,400 (6 customers x 10 seats x $20/seat x 12 months)
- Shift Campaign: an additional 15% margin for one year (by May 31)
- Silver Competency: an additional 20% margin (6% global rate, 4% Global Accelerator, 10% Local Accelerator) by June 30, after the $1,670 fee
- Sky's the Limit: an additional $1,000 ($50/seat rate for 2 customers, $500 + $500)
- Total: 47% margin plus $1,000 from Sky's the Limit
The same stack on Business Premium seats
Business scenario: bringing over 6 net-new customers to Office 365 Business Premium with 10 seats per customer.
- Billed revenue for the year: $9,000 (6 customers x 10 seats x $12.50/seat x 12 months)
- Shift Campaign: an additional 15% margin for one year (by May 31)
- Silver Competency: an additional 8% margin (6% global rate, 2% Global Accelerator) by June 30, after the $1,670 fee
- Sky's the Limit: an additional $750 ($35/seat rate for 2 customers, capped by the program at $350 + $350)
- Total: 35% margin plus $750 from Sky's the Limit
What we would do
We would push M365 Business as clients move to 365. It can replace on-prem infrastructure and unlocks more security and compliance features, and it earns the highest kickbacks in this stack. If you need help getting acclimated to Intune for policy management, see our Intune implementation guide. These SKUs are the future of Microsoft licensing, and the earlier you adopt them for your customers the better.
Frequently asked questions
Do these three incentive programs conflict with each other?
No. As of April 2019 they reward the same behavior, net-new seats moved to Office 365 or Microsoft 365, so the same customer adds count toward all three. That is why the margins stack rather than compete.
Which Microsoft 365 SKU should an MSP push during these campaigns?
We would push M365 Business. It lets customers decommission on-prem infrastructure and use Intune to replace Group Policy and Azure AD to replace AD DS, and it earns the highest accelerator kickbacks in this stack.
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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.
