Microsoft To Expand Azure Sales Through Partners To Keep Amazon, Google At Bay In Cloud War

Microsoft said it will let partners resell Azure cloud services through its Open Licensing program starting Aug. 1, in what could be a bid to keep small and medium businesses from drifting to Amazon Web Services and Google.

As things stand now, Microsoft customers have two choices: They can either buy Azure services directly from Microsoft or get them as part of an Enterprise Agreement. Under Open Licensing, Microsoft's huge base of partners will be able to buy Azure services from distributors and resell them to customers.

Microsoft partners will be able to "grow margins and deepen customer relationships" and take advantage of "flexible monetary payments" through Open Licensing, Josh Waldo, senior director of cloud partner strategy at Microsoft, said in a blog post Wednesday.

[Related: Microsoft Adds Amazon To List Of Companies It Doesn't Want Showing Up At Partner Conference ]

To resell Azure services through Open Licensing, partners will buy tokens from distributors and apply the credit to their customers' Azure portal in $100 increments. When customers want more Azure services, partners simply buy more tokens and add them to their account, according to Waldo.

"This gives you the opportunity to manage your customers' portal, setup services, and monitor consumption, all while maintaining a direct relationship," Waldo said in the blog post.

Microsoft partners already use Open Licensing to resell Windows, SQL Server, Office 365 and other Microsoft products and services.

Putting Azure into distribution makes sense because SMBs are one of the largest untapped markets for cloud services. And since Microsoft is locked in a cloud pricing war with Amazon and Google, getting more partners selling Azure services could help prevent SMB customer defections.

Many SMBs are interested in cloud storage, and ones that are still running Windows Server 2003 are also prime candidates for Azure compute services, Ric Opal, vice president at Peters & Associates, a Microsoft partner in Oakbrook Terrace, Ill., told CRN.

"Eventually, the dial is going to be turned, and the logical place for them to go is Azure," Opal said.

Reselling Azure through Open Licensing will make life easier for managed service providers, Dave Sobel, director of partner community at GFI Software, a Durham, N.C.-based Microsoft partner, told CRN.

"Now you'll be able to put customer systems on Azure, manage them on their behalf and put everything all on one bill," Sobel said.

Jason Sauers, founder and director of connected systems at Phidiax, a Denver-based Microsoft Azure partner, said adding Azure to Open Licensing will help partners generate more cloud- related business.

"Microsoft Open Licensing allows for a graduated scale of discount on Azure services, depending on quantity of use, as well as visibility into client usage for invoicing scenarios," Sauers said in an email.

While selling Azure through Open Licensing is an interesting development, Microsoft partners with well-developed cloud businesses say the more important move came last November when Microsoft began letting MSPs, system integrators and ISVs sign up for its new Azure EA.

The Azure EA lets partners host and manage applications that are owned by their end customers. Chris Hertz, CEO of New Signature, a Washington, D.C.-based Microsoft partner that signed up early on, told CRN this has been a "big win" for his business so far.

"It's great that we will now have the opportunity to resell Azure in Open Licensing. But the real money is in building managed services and solutions on top of Azure, not reselling it," Hertz said.

PUBLISHED MAY 21, 2014