CDW Disses Microsoft With Blockbuster Google Apps Partnership

One of Microsoft's largest channel partners is making the shift to Google.

CDW announced Tuesday that it would start offering Google Apps for Business as part of its growing cloud portfolio. According to the announcement, CDW will also offer "professional services to help customers migrate on-premise or cloud applications to Google Apps.

CDW's Google pact comes shortly after Microsoft slashed its sales commission fees for cloud products such as Office 365. At the time, many partners CRN spoke to said they were in an uproar over the news and were evaluating other options, namely Google Apps.

CRN reported that partners that sell Office 365 and other cloud services in Microsoft's Advisor Enterprise Agreement Deploy program expect to see their incentive payments drop as much as 40 to 50 percent. On top of that, Microsoft also cut fees specifically for large account resellers, such as CDW, by 1 to 2 percent in fiscal year 2014, sources told CRN.

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CDW, No. 8 on the CRN SP500, is the first major national solution provider to sign up for Google Apps for Business in the wake of the Microsoft cuts.

"For CDW to team up with Google says they are not selling enough of Office 365 or the margins Google is offering them are equal to or better than the Microsoft Office 365 margins," said a top executive for a large national Microsoft partner. "For CDW to make a deal like this it would have to move the margin needle for them. It wouldn't make sense for them otherwise."

The national solution provider executive said he expects the landmark deal to have a ripple effect in the channel with other LARs and solution providers adding Google Apps for Business to their sales cards.

As part of the deal, CDW said that it will partner with service providers experienced in migration to help more customers make the switch. The first partner will be Denver-based Tempus Nova, a Google Apps Premier reseller and migration tool developer.

CDW said in the announcement that Google Apps partnership is part of the company's goal to provide a growing portfolio of cloud solutions to its clients. The national solution provider first partnered with Google last year around Chromebooks.

CDW executives were unavailable for comment at press time.

"With Google Apps for Business and CDW's migration and integration services, we continue to build a best-in-class portfolio of compelling cloud solutions," Stephen Braat, CDW senior director and general manager, cloud and managed solutions, said in a prepared statement.

However, the deal raises potential sales conflict issues for CDW, honored as Microsoft Large Account Reseller partner of the year in 2010, which is going to have juggle selling Google Apps for Business while selling Microsoft enterprise licensing agreements as one of just 10 Microsoft LARs, the Microsoft partner said.

"It's going to be interesting to see how CDW plays that card selling Microsoft Enterprise licensing agreements and Google Apps For Business," said the national solution provider executive. "They are going to have to walk a fine line."