What are the differences between direct and indirect CSP?
There are two models for the CSP program: Direct and Indirect. If you’d like to use CSP, you have to choose between the two. In order to understand which model is best for your organization’s needs, you have to understand each of their own unique benefits. Let’s take a look:
Becoming a Direct CSP partner means that you will be contracted directly with Microsoft. Essentially, you would be purchasing from Microsoft and reselling to your customers. The Direct CSP program has certain requirements, however, that could alter your decisions to take this route as not everyone who applies to go direct is qualified.
For starters, becoming a Direct CSP takes approximately 4 months to complete, which is something to consider if you’re eager to get into the market. In most markets, Microsoft are proactively reducing the number of existing Direct Partners, rather than approving more. Another additional factor is that Microsoft requires direct partners to purchase and maintain an Advanced Support Agreement, so you should be prepared for the level of support you would have to provide to your customers. Direct partners must also have their own IP built around the Microsoft cloud. Direct CSP partners also have to put a concrete customer billing structure in place to manage the complexity of CSP. There are also annual minimum revenue expectations to be achieved to maintain Direct CSP partner status.
Selling through an Indirect CSP program is overall a much quicker process than direct CSP. Since you are not working directly with Microsoft, your organization is able to get to market sooner. Indirect Providers are required to service you as a reseller by giving you the tools and platform needed to place orders, billing and license management. Whereas Direct CSP requires you to purchase your SKUs from Microsoft, working with an indirect CSP would have you purchase them right from a CSP Provider. Then, you would be able to sell to customers at the profit margin of your choosing.
While you can get to market quicker with an Indirect CSP, this type of program lets you scale at your preferred pace. You will be able to learn the ins and outs of the Microsoft cloud suite without having to meet specific guidelines or margins. Plus, if you are selling through Indirect CSP, you will have an experienced support infrastructure along the way.
Through Indirect CSP, you will still earn incentives directly from Microsoft, as well as the Partner of Record status (POR) and the revenue recognition goes towards your Microsoft Partner status.
Indirect Providers also have complementary services and IP that allow you to build a stronger and long-term customer experience.