Cleaning the house – Microsoft LSP (LAR) uncertain future

In different geographies Microsoft has asked LSP (Licensing Solution Providers) previously known as LAR (Large Account Resellers), to answer RFPs to maintain their status to transact Enterprise Agreements, and other higher licensing agreement transactions.

The idea behind is to recognize those partners that have done investments on Services offerings that can provide value to Microsoft customers beyond the transaction. Passing the test will mean the continuity of operations as LSP, failing means “out”, at least is what I get from my conversations with LSP friends across the globe facing this situation or from the ones that faced it recently.

I wanted to share some of the comments from this Microsoft partners:

• Revenue expectations pushed for volumes of sales beyond any services: The targets are aggressive, nothing new, but drive the behaviour of selling and upselling instead of consulting and servicing
• Cloud open to other reseller types is very competitive: VARs and others can help clients subscribe and get fees even when there is an LSP transacting an agreement. This also means that VARs better prepare for professional services offerings can be very competitive and if their alliance is with a competitor LSP then the relation with the customer may be at risk
• Global LSPs seem to be more attractive to Microsoft than national LSPs: selling agreements across borders is becoming a common practice especially when savings on price lists are so different between countries.
• Hardware Surface revenue target attempts are “distracting”: Some folks are wondering what kind of partner Microsoft has truly in mind in the new shift to a Device+SaaS company model.
• Fees cuts patterns, cadence and CRM type registration programs: For many years LSPs did not have requests to register deals and obtain fees from entering opportunities and properly track them on Microsoft CRM systems. Also LSPs have experience reduced fees for the same revenue as the partner programs have changed.

The common topic I heard is that the future of LSP as it is today is uncertain, if the new Microsoft RFPs and expectations changes will look for global LSPs then there was not much need for IT services afterall, and the Cloud has broken the boundaries between LSPs and the rest of partners in order to fulfill licensing needs specially in the shift to subscription licenses.

Interesting times!!!… for the LSP community