This small MSP-turned-ISV is projecting more than $1 million in revenue growth this year with even bigger growth potential next year by embracing the Microsoft CSP program through Ingram Micro.
If there is one thing Jerod Powell, founder and CEO of managed services provider (MSP)-turned-independent software vendor (ISV) INFINIT Consulting, knows that many of his competitors don’t, it is this: the biggest opportunities come to those who respond quickly — especially when it comes to the cloud.
Rather than taking a “wait-and-see” approach, Powell made the decision years ago to move his customers to the cloud when it made sense to do so. Rather than replacing a legacy on-premises Exchange Server with a newer model, his salespeople would take the initiative to show customers how moving Outlook and other Microsoft Office apps to the cloud could provide them with additional business benefits.
When Microsoft announced Office 365 as a successor to Microsoft Business Productivity Online Suite in 2011, INFINIT jumped at the opportunity to begin selling it. Not long after, when Microsoft debuted its Advisor program, INFINIT reacted in the same manner and quickly embraced that new program.
While being an early adopter provided INFINIT the competitive advantage needed to take the company to new levels of success, it hasn’t been without its challenges and rough patches, too. Through the Microsoft Advisor subscription model, INFINIT would send its customers a link which would allow them to purchase and install Microsoft products, including Office 365, on their computers. Although Microsoft could identify and credit INFINIT based on this unique URL, limited customer reporting functionality combined with high subscription volumes soon made tracking commissions a daunting task for the 12-person company.
“We had to spend several hours each month investigating and correcting errors and making sure customers followed strict downloading and implementation procedures to ensure we were properly credited for our sales,” Powell says.
Though it wasn’t easy, INFINIT Consulting managed to grow its Microsoft Advisor sales to more than 300 accounts, representing 20,000 seats and yielding $400,000 in Microsoft Advisor commissions in 2014. While the Microsoft Advisor program did provide fiscal benefits over the previous program, another big downside, ironically, was that the program weakened the trusted “advisor” status INFINIT Consulting had previously enjoyed with its customers.
“After the initial sale, customers received monthly invoices from Microsoft, and they contacted Microsoft’s helpdesk for any support issues,” says Powell. “Unless we sold additional, non-Microsoft cloud and managed services, we basically lost the relationship.”
Microsoft CSP and Ingram Micro Empower Partners to Be Trusted Advisors
In 2014, Microsoft announced a new cloud subscription model that truly recognized the value of enabling channel partners to own the customer relationship — the Microsoft Cloud Solutions Provider (CSP) program. Shortly after the announcement, leading master cloud service provider, Ingram Micro took action by making the Microsoft CSP program available for its channel partners through the Ingram Micro Cloud Marketplace. True to form, INFINIT Consulting was one of the first Ingram Micro partners to sign up for the program.
“Obviously, we loved the fact that we could earn much healthier margins selling Microsoft cloud services, but that’s just the tip of the iceberg,” says Powell. “Through CSP, we can once again become trusted business advisors to our Microsoft customers and more easily provide them with other complementary cloud and managed services. And, because Ingram Micro integrates its Cloud Marketplace with our ConnectWise PSA [professional services automation] tool, we can significantly cut down on manually trying to keep track of thousands of invoices each month.”
To date, Powell says his company has been able to convert 35% of customers who were previously on the Microsoft Advisor program to the CSP program.
“For customers that were purchasing multiple services from us, it was an easy conversation and a no-brainer for them to simplify their billing and support processes by switching,” says Powell. “Where it gets tricky, however, is re-connecting with companies we sold only Advisor services to and convincing them to make the switch. This requires well thought out sales planning and true consultative selling. And, you often don’t get second chances to make your pitch, so you have to present a concise and compelling offer the first time.”
Ingram Micro once again stepped up to help channel partners in INFINIT Consulting’s situation by offering a number of special incentives, such as its “CSP Accelerator” promotion, which gives partners 30 days free of unlimited Microsoft CSP subscriptions purchased through the Cloud Marketplace. Ingram Micro also offers partners a discounted annual pre-pay option for all Microsoft CSP purchases, which can significantly lower rates and yield profits more than five times higher than the Microsoft Advisor model (16.5% vs. 3%).
Since switching to the Microsoft CSP Program, Ingram Micro has become an invaluable strategic partner in helping INFINIT build long-term relationships with its customers.
“They’ve proven themselves time and time again by supporting our sales and services with value-added incentives, training, support, consulting, and a variety of complementary services,” says Powell. “Our combined efforts are really paying off in a big way, too. Our sales revenue is up more than $1 million over last year, and next year we have the potential to surpass this year’s performance.”