Microsoft Partner Funding For Office 365 Projects Exhausted In Less Than Two Months

Microsoft is telling partners that funding for a channel program aimed at driving high-end Office 365 pilots and deployments, which began in mid-August, has already been fully allocated.

When Microsoft started offering free email migrations to Office 365 customers on Sept. 1 under its Fast Track program, it also launched funding for partners that drive deployments of SharePoint Online, Lync Online, Yammer and Office 365 Pro Plus, which come with enterprise-focused subscriptions.

The deployment funding is part of several partner offers in the Microsoft Partner Investment Engine (PIE) initiative, which debuted in July at the Worldwide Partner Conference.

[Related: Partners Baffled By Microsoft's Mixed Messages On Free Office 365 Migrations Program]

Microsoft's rationale for offering free email migrations was to get partners focusing more on driving higher-value services. The deployment funding was seen as a way for partners to make the transition, if they hadn't done so already.

Now, the deployment funding has been fully allocated, a Microsoft spokesperson told CRN Tuesday.

While some partners are under the impression that the funding would be available until the end of the calendar year, the spokesperson said this was never the case.

"When we made these offers, they were on a limited-time, first-come first-served basis, unlike incentives that are in-market for the full fiscal year," the spokesperson said.

In addition to deployment funding, partners also get a certain amount of PIE funding for getting a customer to sign up for a trial, and that money is still available, the Microsoft spokesperson said.

Partners told CRN they've been told they can get up to $8,000 in deployment funding per workload for larger customer engagements, but the Microsoft spokesperson declined to confirm this figure.

Some partners told CRN they're surprised to see the deployment funding exhausted so quickly. Some are re-thinking their plans for pushing higher-end Office 365 services now that it's gone.

"We had baked the PIE funding into our go-to-market strategy. Given that it is already exhausted, that means we have to pull back," one Microsoft partner told CRN.

Despite rumors that Microsoft may add more funding in the second half of its fiscal year, which begins in January, the Microsoft spokesperson said there are no immediate plans to do so.

While it's not ideal that PIE was fully allocated so quickly, that's a risk with any channel funding model, Chris Hertz, CEO of New Signature, a Microsoft partner in Washington, D.C., told CRN.

"It would have been nice to see a bigger bucket and [for the funding to] be in market longer, but we have already adjusted course and will continue on without it," Hertz said. "At the end of the day these funding buckets are great to drive business, but we can’t be reliant on them to be successful as partners."

Microsoft is still providing funding to partners so they can offer discounted Office 365 services to customers. Microsoft will pay partners $15 per seat for up to 1,000 seats, and then $5 per seat after that, with a limit of $60,000 per customer.

That funding -- part of Microsoft's FY15 Adoption Offer -- will run through March 31, 2015.

PUBLISHED OCT. 29, 2014