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Microsoft: Partners to handle Dynamics CRM Online billing

Microsoft partners will have more customer control as the company loosens its grip on Dynamics CRM Online billing.

NEW ORLEANS -- Microsoft Business Solutions partners will eventually be able to bill their Dynamics CRM Online customers directly, although the company still seems to be of two minds on the subject.

Microsoft Business Solutions (MBS) will make sure that its Dynamics CRM Online billing plan follows the lead of the rest of the company, Corporate Vice President Kirill Tatarinov told Tuesday at Microsoft Convergence 2009. For partners that currently get referral fees but no recurring revenue from CRM Online deals, that means they will be able to bill for the Microsoft-hosted service and thus be the primary customer point of contact in those accounts.

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"We will align ourselves with the rest of Microsoft, and we will give sufficient notice," Tatarinov said in a post-keynote interview. "We are very cautious on any changes we might introduce."

Another Microsoft source confirmed that the company will in fact let partners bill for CRM Online. Tatarinov would not disclose a time frame for these billing changes.

Still, the company's plans appear to be in flux and Tatarinov's comments continued a confusing week for partners looking for guidance on the billing practices for the vendor-hosted Microsoft Online Services. Sunday, Microsoft Software-Plus-Services Director Shannon Day told CRN that the company was reversing course on Microsoft Business Productivity Online Suite (BPOS) and would let partners own and bill the customer. But on Monday, a Microsoft spokesperson retracted Day's statements, according to CRN.

BPOS includes Microsoft-hosted Exchange, SharePoint and Office Communications Server (OCS). Observers say the offering competes directly with partner-hosted Exchange, SharePoint and OCS, but Microsoft has said it will price BPOS above these partner-led services.

The coming change in CRM Online billing is significant to VARs and other Microsoft partners, that prefer to own the customer relationship and be the first point of call for customers.

USA.NET and other hosting partners have said their advantage over Microsoft BPOS is that they enable VARs to maintain their billing and other relationships with customers. For most VARs, the billing relationship is sacrosanct, and the issue has become a sore spot as more and more software services are served up from vendors' servers.

"All partners want to own the customer relationship, and billing is the ultimate proof of that relationship," said Andy Vabulas, CEO of IBIS Inc., an Alpharetta, Ga.-based MBS partner.

Albert Pang, director of research for IDC, said the change in billing represents good news for partners.

"This proves that Microsoft will open up all kinds of opportunities to partners and is a strategic move to cement partner relationships," he said.

One big issue for Microsoft is the looming presence of Google Inc., which is trying to move beyond Web search and establish itself as a provider of business productivity services.

Microsoft also announced an update to CRM Online today that is designed to help partners work with their customers in a more programmatic way. "We want bigger uptake in Microsoft CRM by traditional, or classic, Microsoft Dynamics partners," Tatarinov said.

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