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Managed Reseller Incentives
SMB | Incentive Guide v1.4
July 1, 2014 – June 30, 2015
Contents
Contents ..............................................................................................................................................2
Overview ..............................................................................................................................................6
Summary of FY15 program changes ....................................................................................7
Managed Reseller Eligibility .........................................................................................................7
MPN Eligibility Criteria ...............................................................................................................8
Microsoft Management Status ...............................................................................................9
Performance Thresholds ...........................................................................................................9
System Requirements.................................................................................................................9
Eligibility confirmation ............................................................................................................ 10
Incentive Structure and Rates ................................................................................................... 10
Global incentives ....................................................................................................................... 10
Locally-Chosen Accelerators Activity, Definitions, and Requirements .................. 11
Treatment of Public Sector .................................................................................................... 12
Revenue eligibility ......................................................................................................................... 12
Cloud via Open Revenue........................................................................................................ 14
Duration of Open & Open Value Contract Terms & Office 365 Subscriptions .. 16
Earning Incentives: Managed Reseller versus Advisor ................................................ 17
Earnings & payments ................................................................................................................... 18
Mechanics of Earning and Usage Periods ....................................................................... 18
Payment Frequency.................................................................................................................. 19
Payment Mechanics ................................................................................................................. 19
Compliance and Performance .............................................................................................. 19
Earning Example ........................................................................................................................ 20
Understanding Coop.................................................................................................................... 21
Marketing Activities Eligible for Coop............................................................................... 21
Aligning Marketing Coop Activities to Microsoft Priorities ....................................... 21
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Resources ......................................................................................................................................... 22
Useful links .................................................................................................................................. 22
Support .................................................................................................................................... 22
FAQ ............................................................................................................................................ 22
Other Incentives .................................................................................................................... 23
Appendix .......................................................................................................................................... 23
Market Definitions .................................................................................................................... 23
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Version
1.0
1.1
Modification
First release
- Addition of Azure via Open as an eligible product under Cloud
table “Cloud Product Categories for Commercial Distributor
Incentive”
- Inclusion of Azure via Open SMB Incentive Promotion
- Removal of MS Authorization and MS Agreement from
Eligibility Requirements
- STB CAL Suites is changed to CnE CAL Suites in the Core and
Growth Product Categories in “On-Premise Product Categories
for Managed Reseller Incentives”
- Cloud product chart updated for all cloud products and license
types sold via Open license.
1.2
-
Removed “Active Inherited” status for eligibility
Clarified Eligibility by Customer Segment
Cloud product chart updated for new Office 365 SKUs
Removed resource link for Coop preapproval service
1.3
-
Corrected statement on the frequency of eligibility assessment
from “Every six months” to “Each year”
Data Analytics, Datacenter, and Small & Midmarket Cloud
Solution added to qualifying MPN competencies for eligibility.
Active-Inherited added to qualifying MPN competency statuses
for eligibility.
CRM Online via Open added to Table 5 – Eligible Cloud via
Open SKUs. As of February 1, 2015, CRM Online via Open will
earn the standard base incentive rate of 8% consistent with
other Cloud via Open products.
Incremental CRM Online via Open Promotion announced to
award an additional rate of 12% from Feb 1 to Jun 30, 2015.
Corrected deadline for tool registration with valid banking
information and updated email address from September 30th to
December 31st 2015 for H1 FY15 enrollment.
-
-
1.4
-
4
Added H2 Office 365 Global Accelerator that will run from February –
June, 2015
Clarified payment of Cloud via Open on Annuity contracts
Clarified payment alignment of EMEA partners to the global program
calculation process for Managed Reseller incentives.
-
-
5
Campus replaced with School in the Cloud via Open eligible revenue
(Table 5)
Combining Incentive Guides for (EMEA & Global MR)
Updated the “Plans” and “License Type” columns in Table 5
Clarified Eligibility Confirmation section on page 10
Added Appendix with market maturity chart
Overview
Microsoft is pleased to offer the Managed Reseller Incentive, dedicated to
supporting partners who drive the product portfolio through the Open Licensing
program. Managed Resellers broaden Microsoft’s customer reach (sales and
deployment) for Open License Agreements and Cloud products sold via Open
License agreements (Cloud Open), particularly within the vast Small and Midsized business (SMB) market, as well as the public sector markets.
In FY15, the Managed Reseller Incentive will continue to reward partners as they
accelerate sales and share of Microsoft’s newest products while growing the
established base of well-known products. It balances rebates with coop
marketing funds to enable partners to increase profitability through cash rewards,
and reimburse them for the sales and marketing efforts that generate demand
and awareness for the product portfolio, especially for the fast growing Cloud
opportunity.
These partners vary in their focus and contributions to Microsoft’s business. Some
are large resellers that leverage their marketing and sales engines to scale
Microsoft’s license sales reach into the market. They generally have nationwide or
multi-country coverage, focus on Direct Marketing activities such as selling online
and through outbound telesales teams, sell in high volumes, and differentiate
themselves through their licensing expertise. Others leverage their local and
regional brands, established solutions practices, and sales and marketing engines
to help extend Microsoft’s solution reach into the market. Over the coming years,
Managed Resellers will also be a significant sales engine for Microsoft cloud
offerings.
Managed Reseller Incentives for FY15 promote:

Increasing and accelerating customer reach and expansion, especially
for Cloud Open offerings

Growing sales of key workload and cloud solutions that address critical
customer requirements, and improving product attach to customer
solutions

Growth of revenue and profitability, and enhancing the value of
partner’s sales and delivery practices
For the purpose of this document, fiscal year 2015 is the period running from July
1, 2014 to June 30, 2015. It can be designated as FY15. In addition, the first fiscal
half of fiscal year 2015, running from July 1, 2014 to December 31, 2014, may be
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referred to as H1FY15, while the second fiscal half of fiscal year 2015, running
from January 1, 2015 to June 30, 2015, may be referred to as H2FY15.
Starting in H2 FY15, this document covers the Managed Reseller incentive
program for all geographies except the United States.
Summary of FY15 program changes
The incentive framework that was in place for FY14 will remain in place for FY15.
In FY15, the Managed Reseller incentive will no longer offer a global accelerator
for Office sold via on-premise Open licenses. The incentive investment will be
aligned to maintaining attractive rates for Cloud Open offerings, including Office
365, and healthy local accelerator options. All recurring revenue will be excluded
from the incentive calculation, with the exception of recurring revenue associated
with Cloud products as defined in Table 5. Recurring Cloud product revenue will
be included in the incentive calculation.
Managed Reseller Eligibility
In an effort to ensure consistency across Channel incentives and enhance clarity
for partners participating in multiple programs, Microsoft has created a standard
format for Eligibility Criteria.
Each year, Microsoft invites and enrolls partners into the Managed Reseller
incentive. To be eligible to participate in the Managed Reseller incentives, a
partner must meet the following criteria.
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Figure 1: Eligibility at a Glance
MPN Enrollment
Eligibility
Type
Eligibility Requirement
Program Specific Criteria
Enrollment Status
Active MPN ID
Membership Level
Silver, Gold
One of these Competencies
Application Integration, Business Intelligence,
Data Analytics, Data Platform, Collaboration &
Content, Communications, Messaging, Devices,
and Deployment, Identity & Access, Datacenter
Management & Virtualization, Server Platform,
Midmarket Solution Provider, Small Business,
Small & Midmarket Cloud Solutions, Customer
Relation Management, Software Asset
Management, Volume Licensing.
Competency Status
Active Earned, Active Inherited, Active NonCompliant or Active Pre-Approved
Microsoft Management Status
Performance Thresholds
System Requirements
Managed Partner
75,000 per year, USD Open License (12 month
period) or $50,000 in Emerging Markets.
MS Sales ID (TPID)
MPN Eligibility Criteria
Eligible partner organizations must hold an active MPN membership and an
active MPN ID. In addition, your organization must earn and maintain MPN gold
or silver level in one of the following Microsoft Competencies:







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Application Integration
Business Intelligence
Data Analytics
Data Platform
Collaboration & Content
Communication
Messaging











Devices and Deployment
Identity & Access
Datacenter
Management and Virtualization
Server Platform
Midmarket Solution Provider
Small Business
Small & Midmarket Cloud Solutions
Customer Relations Management
Software Asset Management
Volume Licensing
Competency status must be Active-Earned, Active-Inherited, Active PreApproved, or Active-Non Compliant status per Microsoft subsidiary by June 1,
2014. Partners that cannot meet this eligibility requirement by June 1, 2014, have
an opportunity to earn the incentive for the H2 period by achieving the MPN
competency requirement by December 1, 2014 (assuming other eligibility criteria
are met). A full description of each MPN ID status please can be found at MPN
ID Status
To review the specific requirements to attain Silver or Gold level MPN
Competency, please visit the MPN site:
https://mspartner.microsoft.com/en/us/Pages/Membership/competencies.aspx.
Microsoft Management Status
The partner must be managed by a Microsoft resource, either a Partner Sales
Executive (PSE) or Tele-Partner Sales Executive (TPSE) at the global or local level.
Performance Thresholds
Partners must meet or exceed a revenue threshold of $75,000 per year USD in
Open License revenue during the 12-month period from June 1, 2013 through
May 31, 2014 in Mature Markets, or $50K/year USD in Emerging Markets. In the
US, partners designated as Scale Resellers and VAR Champions will be eligible for
this incentive and are considered to meet the eligibility criteria.
System Requirements
Partners must have an MS Sales ID to be eligible for the incentive.
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Eligibility confirmation
Partner Sales Executives notify partners of their selection and enrollment into the
Managed Reseller Incentive. Eligible partners receive incentive contracts from the
Microsoft Regional Operations Center (ROC), typically during the first month of
the fiscal year (July). To be successfully enrolled, Partners must have received an
incentive contract from Microsoft each year. Additionally, Partners should have
successfully completed incentive tool registration, provided valid banking
information and an updated email address by December 31st, 2014 for H1 FY15
enrollment or March 31st, 2015 for H2 FY15 to insure successful enrollment.
The incentive contracts contain the description of key terms and definitions,
payment dates and an incentive rate table. The incentive rate table
communicates the types of products rewarded and the associated percentage
rates, based on the revenue and/or activity.
Whereas in the past, all participating Partners in EMEA had access to an incentive
rate table containing the types of products rewarded and their associated dollar
per unit payouts, starting in H2 FY15, incentive earnings will be calculated using
the rates outlined in this guide on a straight percent of revenue basis, using net
price (the price charged by Microsoft).
Incentive Structure and Rates
The Managed Reseller Incentive rewards sales of Incubation, Growth and Core
products on Open License Annuity and Non-Annuity revenue, as well as Cloud
products sold via Open license (i.e. Office 365). Additionally, the incentive
includes local accelerators that address the specific sales and marketing goals
within individual Microsoft subsidiaries.
Global incentives
Rates for corporate-defined, global Open volume license incentives are seen
below in Table 1.
In this model, higher rates are paid for Growth products over Core products, and
even higher rates are paid for Incubation products. In addition, Open annuity
contracts are incented at higher rates than non-annuity contracts. Finally, unique
rates are offered for Cloud Open revenue.
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Table 1 – FY15 Managed Reseller Incentive Rates
Locally-Chosen Accelerators Activity, Definitions, and
Requirements
The subsidiary/Area augments the globally-defined incentives through local
accelerators, selected to address local market conditions and opportunities. The
menu of local accelerators are documented in Table 2.
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Table 2 – Managed Reseller Local Accelerator Options
Treatment of Public Sector
All Public Sector revenue booked via Open and Academic License agreements are
included in the Managed Reseller incentive calculation.
Revenue eligibility
For the Managed Reseller incentives, revenue is categorized as shown in the
Table 3 below.
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Table 3 – Eligible Revenue by Product Category
The section above shows the products in each of the product categories of Core,
Growth, and Incubation that are eligible for incentives.
Open license agreements sold to customers classified by Microsoft as a
Corporate Account (CA) or Enterprise and Partner Group (EPG) customer will be
eligible for incentive earnings, unless otherwise specified in the definition of the
lever or accelerator. In such instances, a sizeable Open License agreement (250+
seats), or an Open License agreement with greater than 5 servers is a good
indicator that the customer is in the CA or EPG segment in cases where this
revenue is excluded from the incentive calculation. This information will be
available on the incentive tool. Partners should not contact their Regional
Operations Center or Partner Sales Executive, as these resources will not have
accurate visibility of the customer segmentation for a specific transaction.
Below in Table 4 are the license types eligible for these incentives:
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Table 4 – Eligible License Types
Cloud via Open Revenue
Customers are increasing their purchases of Microsoft cloud-based solutions. To
help meet this growing demand, Microsoft offers exciting cloud-based products
that can be sold via Open license agreements. These include Office 365, Azure via
Open, CRM Online via Open, Power BI and Intune products, among others.
These cloud offerings enable Cloud via Open offerings to be sold by a Distributor
to a Managed Reseller, who subsequently sells the service directly to an end
customer. Thus, a Reseller can manage the billing relationship with their customer
and combine these Microsoft offerings with other services to deliver a
comprehensive solution and manage all aspects of the customer engagement.
The Cloud Open incentives are an added component to the existing Managed
Reseller Incentives and follow the same guidelines as the other eligible products
do within the framework. The incentive rate for Cloud Open products in the
global component of the incentive is 8%. Managed Resellers are incented on the
Cloud Open SKUs documented in Table 5.
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Table 5 – Eligible Cloud via Open SKUs
Please note the following:
1 Products qualifying for Office 365 incentive may change during FY15.
2 An order is allowed only in those Subsidiaries where Cloud Open offerings
are available.
3 Azure via Open is being added to the eligible Cloud via Open product list
as of August 2014 and will earn the standard base incentive rate of 8%
consistent with other Cloud via Open products. Microsoft Azure is
purchased as a prepaid monetary commitment with a 12 month
consumption period upon redemption. The rate of consumption is
completely dependent on usage and the metered rate of the specific
Microsoft Azure services consumed. Unused balances expire at the end of
12 months and cannot be rolled over into future periods. Calculators are
provided to model expected usage scenarios for customers, in addition to
configurable alert e-mails for low balances.
4 CRM Online via Open is being added to the eligible Cloud via Open
product list as of February 1, 2015 and will earn the standard base
incentive rate of 8% consistent with other Cloud via Open products.
SPECIAL AZURE VIA OPEN INCENTIVE FOR SMB PROMOTION
ANNOUNCEMENT
Microsoft is offering an incremental promotional incentive of 12% for Azure via
Open sales to SMB customers between August 1, 2014 and March 31, 2015, in
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addition to the base rate of 8% for FY15. The incremental 12% promotional
incentive will follow the same Coop/Rebate apportionment as the base
incentive. Microsoft Azure via Open sales to SMB customers will therefore earn a
total 20% incentive through March 31, 2015. Note - sales to CA and EPG
customers are excluded from this promotion.
SPECIAL CRM ONLINE VIA OPEN INCENTIVE PROMOTION
ANNOUNCEMENT
Microsoft is offering an incremental promotional incentive of 12% for CRM
Online via Open sales from February 1 until June 30, 2015, in addition to the base
rate of 8% for FY15. The incremental 12% promotional incentive will follow the
same Coop/Rebate apportionment as the base incentive. Microsoft CRM Online
via Open sales will therefore earn a total 20% incentive through June 30,
2015. Note – sales to CA and EPG customers are included in this promotion.
NEW IN FY15 H2 – GLOBAL OFFICE 365 VIA OPEN ACCELERATOR
Microsoft is offering an incremental incentive in February-June FY15 (February 1,
2015 thru June 30, 2015) to Managed Resellers for Office 365 products sold
through Open licenses to SMB customers. This offer will provide an additional
4% incentive for qualified sales made during this period. The eligible license types
and products for this accelerator are those found in Table 5, except for Azure via
Open, CRM On-line via Open, and Office 365 Small Business Premium (which is
sold via ESD). The incentive will be paid as 50% rebate and 50% coop funds,
which will be available to claim against approved activities during H1 FY16 (per
standard coop program guidelines).
Duration of Open & Open Value Contract Terms &
Office 365 Subscriptions
All existing program rules and ordering processes of Open and Open Value
remain the same for Office 365 as they do for on-premise licensing. What differs
is the duration of Open and Open Value license contract terms, 2 and 3 years
respectively, and an Office 365 subscription period of 1 year.
The expiration of an Office 365 Subscription is independent from the Open and
Open Value contract terms and their expiration dates. They are not coterminous
as depicted in the example below.
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Users can be added to the subscription midterm. If additional seats are
purchased through the Open Programs, the service time will be distributed
evenly across all users to maintain the same coterminous end-date and ensure
the simpler renewal management. Once the 1 year subscription is close to its
expiration date, renewals can happen in a number of ways: buying the same
Office 365 SKU from Open and Open Value licensing, renew directly with
Microsoft, or renew with the support of Microsoft Online Services Advisor
Partners.
Earning Incentives: Managed Reseller versus Advisor
Customers have two options to purchase Office 365. The first option is to buy
directly from Microsoft and leverage a Partner as an Advisor. In this instance, the
partner can earn Advisor Incentives under the Microsoft Online Services Partner
Agreement (MOSPA) Partner Incentives. For the second option, a customer can
buy Office 365 SKUs directly from a partner. If the partner is an eligible Managed
Reseller, then they can earn incentives for the sale as outlined in this document.
Partners cannot earn both Advisor Incentives and Managed Reseller Incentives on
the same transaction. For more detailed information on the Advisor Incentives,
please refer to FY15 Online Services Advisor Incentives Guide.
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Earnings & payments
Mechanics of Earning and Usage Periods
The two periods that make up the Incentives business cycle are:

Earning Period: the 6 month period where partners earn rebates
through their sales performance against the incentives’ objectives and
eligibility criteria. A new Earning period will overlap with a current
Usage period, based on 6-month cycles as shown in the figure below.

Usage Period, or the claim period: the 6 month timeframe that
immediately follows the “Earning" period. If partners have met the
eligibility criteria, then they are awarded the rebate funds and can
claim earned coop funds for eligible marketing, business development
and readiness activities.
Rebate payments are paid on the scheduled date without needing to make a
claim. Unclaimed funds are forfeited at the end of the Usage period.
In the past, upon the awarding of funds, partners in the EMEA region were
required to make rebate claims at any time during the six-month usage/claim
period. As of FY15 Q3, rebate claims in EMEA will no longer be required. Instead,
EMEA will join Asia, Latin America, and Canada regions where rebate payments
are paid on the scheduled date without needing to make a claim.
Partner is eligible to earn rebates and
coop funds through sales of eligible
licenses and products during the
Earning period (6-month)
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When partner meets all
requirements, rebate and coop
funds are then AWARDED for
Payment & Usage. Rebates are
paid automatically and coop
funds are paid against eligible
activity claims.
Partner claims earned coop funds
after an eligible market
development, demand
generation, or readiness activity
is performed during the
6-month USAGE period.
Payment Frequency
Rebates are paid after the earning period once the calculations have been
conducted and verified.

Payment Frequency: Rebates payments are made 45 days after the end of
the semester earning period and after the calculations have been
conducted and verified.
Coop is paid during the Usage period after the activity has been
completed and approved by Microsoft as successfully submitted.
Payment Mechanics
Wire transfer is the preferred payment method for all Managed Reseller
partners. Partners are responsible for providing an updated bank detail
information in the tool. If Microsoft is unable to pay the partner due to
incomplete or inaccurate bank detail that was provided, the partner will need to
log into the tool and update their information immediately. If partner does not
provide the updated bank detail information as requested by Microsoft, they
will not receive timely payment and will forfeit any payment earned during the
semester. The PSE or T-PSE will contact partners when Microsoft is unable to
pay on the existing bank detail that the partner provided in the tool.
Compliance and Performance
Use of Coop Funds
Coop funds must be claimed during the six-month usage period that follows the
Accrual period. If funds are not claimed during the six-month usage period, they
will be taken away with no possibility of reinstatement.
Additionally, Microsoft expects participating partners to be prepared with their
marketing and sales teams by the beginning of their usage period, to be
prepared to perform marketing activities in accordance with the coop marketing
guidelines.
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Earning Example
In the following example shown in Table 6, we assume a Managed Reseller sold
$3.86M in Open License revenue for the year.
In this example, the partner would earn annual incentives of $126,600 (3.3% of
revenue). The partner would receive $63,600 in rebate and $63,600 would be
deposited to their coop fund for usage against eligible activities during the
subsequent fiscal semester.
Table 6 – Earning Example
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Understanding Coop
Marketing Activities Eligible for Coop
The eligible coop activities for Managed Reseller are listed in Table 7 below. For a
detailed description of these activities, please refer to the Coop Guide available
on the online Managed Reseller Activation Kit at: http://www.managed-reselleractivation-kit.com/ .
Please note that eligible activities can be leveraged to develop new business for
either on-premise or cloud-based solutions.
Table 7 – Eligible Coop Activities
Aligning Marketing Coop Activities to Microsoft Priorities
Microsoft has defined key priorities for FY15, as defined in Table 8. Microsoft will
be developing and launching sales and marketing campaigns around these
priorities worldwide.
Many Microsoft investments related to these priorities are driven locally as
promotions, offers, and activities. Managed Resellers are encouraged to work
with their PSE, T-PSE or Channel Development Manager (CDM) to align coop
investments to these priorities and understand how to participate in those local
initiatives throughout the fiscal year to best leverage Microsoft’s investment.
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Table 8 – FY15 SMB Priorities
Resources
Useful links
The following resources are available, explaining the Managed Reseller Incentive:

Managed Reseller Activation Kit – www.managed-reselleractivation-kit.com
Support
For questions related to the Managed Reseller Incentives, please contact your
local Partner Sales Executive or the Regional Service Center at
https://mspartner.microsoft.com/en/us/Pages/Support/partner-networksupport.aspx
FAQ
The Managed Reseller Incentive FAQ document can be found on the Activation
Kit referred to above.
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Other Incentives
Partners eligible for Managed Reseller incentives may also meet the eligibility
requirements for:

Online Service Incentives: Earn advisor incentives for Office 365
bought directly by customer from Microsoft

CRM Online Incentives: incentives offered to partners that sell
Microsoft Dynamics offerings

LSP Incentives: incentives offered to authorized Licensing Solution
Providers
Appendix
EMEA Market Definitions
Emerging: Central & Eastern Europe (excluding part of EU/EFTA), Africa and
Middle East. These regions collectively include Albania, Algeria, Angola, Armenia,
Azerbaijan, Bahrain, Belarus, Bosnia and Herzegovina, Bulgaria, Central Asia,
Croatia, Cyprus, Egypt, Estonia, Georgia, Indian Ocean Islands, Iraq, Israel, Jordan,
Kazakhstan, Kenya, Kuwait, Latvia, Lithuania, Lebanon, Libya, Macedonia (FYROM),
Malta, Moldova, Morocco, NEPA Indirect Markets, Nigeria, Oman, Pakistan,
Palestinian Authority, Qatar, Rest of East & Southern Africa, Romania, Russia,
Saudi Arabia, Serbia, Slovakia, Slovenia, South Africa, Tunisia, Turkey, Ukraine,
United Arab Emirates, and West and Central Africa.
Mature: Part of EU/EFTA including: Austria, Belgium, Czech Republic, Denmark,
Finland, France, Germany, Greece, Hungary, Iceland, Italy, Ireland, Monaco,
Lichtenstein, Netherlands, Norway, Poland, Portugal, Spain, Sweden, Switzerland,
United Kingdom.
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