CRN Exclusive: SADA Systems Inks Deal To Open Up Microsoft Cloud Services Sales to Intelisys Partners

IT services provider SADA Systems Inc. is teaming up with master agent Intelisys in a blockbuster deal that will allow Intelisys’ solution provider partners to sell Microsoft's complete suite of cloud-based products, backed by SADA's managed services and support as a leading Microsoft Cloud Solution Provider (CSP).

The relationship could conservatively translate into millions of dollars of top-line revenue for SADA and Intelisys partners, said Tony Safoian, president and CEO of Los Angeles-based SADA Systems.

"The scale of this in unlike anything we've ever done. If it works, it could really define who we go to market [with] for many years to come," he said. "We are very excited about the potential."

[Related: Microsoft Exec To Partners: Good Job Selling Cloud Services, Now Let's Drive Consumption]

Through the new relationship between SADA as the Microsoft supplier and Intelisys, solution provider partners can break off a piece of the lucrative recurring revenue stream generated by Microsoft's cloud services offerings.

Intelisys touches about 1 million Microsoft users through its expansive partner community and breadth of offerings, according to the company. Until now, SADA has had to source all its own sales opportunities, and has primarily sold Microsoft directly to end customers. The partnership with Intelisys will provide an expansive "channel" of partners that can now sell Microsoft services through SADA.

According to Safoian, access to thousands of Intelisys sales partners will give SADA "more swings at the bat" for Microsoft sales opportunities, without having to hire their own sales staff. This relationship will also give these solution providers an opportunity to build up their own recurring revenue streams.

Intelisys is anticipating a groundswell of interest in the relationship, said Andrew Pryfogle, senior vice president of cloud transformation for Petaluma, Calif.-based Intelisys.

"If you think about it, nearly every single one of [a solution provider's] customers is a prospect for this -- they don’t have to go find a small percentage that might be a good fit -- everyone is a great fit for this deal," he said.

While Microsoft is channel-friendly, before now, Pryfogle said, the IT giant didn't provide a good commission opportunity for partners for the licensing of its popular cloud products, such as Office 365, SharePoint, Microsoft Dynamics and Azure. Partners were paid only on a referral basis for cloud offerings, he said.

"Those fees were never big enough for our partner community to be interested," he said. "Our community is all about building big basis of recurring revenue, and up until the CSP program, Microsoft didn’t really have an answer to that."

Microsoft introduced SADA to Intelisys when the master agent was looking for a way to help its solution provider partners make money off of Microsoft's cloud services. "We were getting this question all the time, so this is meeting a very large, pent-up demand in our partner community," Pryfogle said.

The relationship with SADA takes billing and support off of Intelisys, but still gives its partners access to Microsoft services. "It really does open up the Microsoft opportunity to our partner community ,and I think the effect of that will be enormous," Pryfogle said.

Intelisys will be orchestrating the relationships between its solution provider partners and SADA. When a solution provider brings in a new Microsoft customer, SADA will act as the cloud services supplier and bill the end customer on their own paper. Once the bill is paid by the customer, SADA will pay a commission to Intelisys. The majority of that commission will be passed down to the sales partner that sold the deal.

As a CSP, SADA can take over the billing and support for Microsoft's cloud services, and have access to deep discounts off the list price for these offerings. SADA can then sell Microsoft's services at its own price, with its own value-added services wrapper.

SADA enjoys being able to hold the paper on Microsoft's cloud services sales, but while engaging contractually with end customers is important, being able to work with customers directly to deliver and support their services is very attractive, Safoian said.

Though the CSP program, Microsoft is demonstrating that it is embracing the channel for cloud services sales, Intelisys' Pryfogle said.

"Microsoft wanted to figure out a model that would allow them to break into [the] sales partner community and they put a lot of energy into making this work," he said. Microsoft is recognizing the power behind the channel partner community. As a trusted adviser to the end user, partners have the power to direct buying decisions in favor of Microsoft, Pryfogle said.

The CSP program is also a big testament to Microsoft's cloud strategy. "Microsoft's stated goal is to move away from [the] traditional licensing model in favor of a Software-as-a-Service model, and we plan on being a big beneficiary of that," he said.

SADA is building a system to handle the referral process of a lead from an Intelisys solution provider partner. Once customers are processed, they'll have access to SADA's full portfolio of value-added managed services around Microsoft's services. SADA can support customers thanks to its experience with Microsoft services, as well as its direct access to Microsoft in case any issues arise, Safoian said.

SADA can also help customers obtain the highest level of user adoption, a critical consideration for any cloud-based service.

"In the world of cloud, unless the customer is realizing the full value, they can turn it off, and that’s dangerous," Safoian said. "We can help make sure the customer is using the platform in the best possible [way], like maybe help figure out what ... SharePoint could do for them, or if Skype for Business can displace another spend the customer has."

The commitment to support from SADA is important for both end customers and sales partners who are benefiting from the Microsoft sale, Pryfogle said. "That’s were SADA really shines," he added.

PUBLISHED SEPT. 16, 2015