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Rackspace becomes Microsoft cloud distributor, recruits partners

Rackspace is recruiting channel partners to resell and refer Azure and Office 365 as the company expands its role in Microsoft's Cloud Solution Provider program.

Channel partners working with Rackspace will be able to resell and refer Microsoft Azure and Office 365, with Rackspace serving as a cloud distributor.

The reseller program, which Rackspace unveiled July 7 in the run up to next week's Microsoft Worldwide Partner Conference 2016, marks an expansion of the company's participation in Microsoft's Cloud Solution Provider (CSP) program. Rackspace in May 2015 began offering support plans for Office 365, which included email migration and access to experts, as well as round-the-clock support. Support plans for Microsoft Azure debuted in July 2015.

Rackspace delivers both of those services directly to end customers as a 1-Tier Microsoft CSP. As a 2-Tier cloud distributor, Rackspace now lets Rackspace Partner Network participants resell Office 365 and Azure support to their customers. Rackspace said less than 10 hosting providers worldwide offer 2-Tier distribution across Microsoft's cloud suite. Specifically, channel companies will be able to tap Rackspace for customer migration, deployment assistance and support escalations. In addition, partners will have a dedicated reseller team and support for sales and marketing, Rackspace noted.

"I think Rackspace has done a great job of simplifying the solutions from Microsoft," said Ben Greiner, president of Forget Computers Ltd., an IT services and device support company focused on Apple products. Forget Computers, based in Chicago, is an early access partner in Rackspace's program.

Greiner said he has been looking for Rackspace to resell Microsoft's cloud offerings for a while. He said his company wanted the ability to offer Microsoft's Office 2016 for Mac suite to its customers via the Office 365 purchase option. For the past year or so, Forget Computers has been reselling Office 365 through SherWeb. But now, the company will sell all new Office 365 licenses through Rackspace and will eventually migrate its SherWeb accounts to Rackspace.

I think Rackspace has done a great job of simplifying the solutions from Microsoft.
Ben Greinerpresident, Forget Computers

As for simplifying Microsoft products, Rackspace had "always done a nice job of taking the back end of Exchange and putting a clean and simple interface on it for those of us who are not Exchange administrators," Greiner said. "They have done the same things with Office 365."

But while Rackspace has made it a simple task to spin up an Office 365 license for a client, the final configuration is still done on the Office 365 interface or the Microsoft Control Panel. It is easy get lost at this stage, but Greiner said he can turn to Rackspace with questions.

"They are responsive and easy to work with," Greiner said of Rackspace. "If we had to work with Microsoft directly, we would feel a little lost and out on our own."

Partner collaboration

Chris Rallo, director of global partner programs and operations at Rackspace, said the company will use Microsoft's Worldwide Partner Conference to launch the Microsoft cloud distributor program and recruit partners. The conference runs July 10 to 14 in Toronto.

Now that Rackspace sells Microsoft cloud offerings both directly and through partners, Rallo said the company will typically defer to partners on deals to reduce the potential for channel conflict. For example, if Rackspace and one of its partners are engaged on the same deal, more often than not, the company will work with the partner, he said.

"We always try to collaborate and work ... with partners," he said.

Kirk Averett, senior director of product at Rackspace, said the company's partners will help it reach customers that have a different set of needs. For instance, Rackspace offers remote support, but some customers may want someone on site for cloud assistance.

"That is not what we traditionally do," Averett said.

Rackspace partners can also play a role in providing deep vertical market expertise, Averett said. He noted some of the company's partners specialize in providing IT services for car dealerships.

Extending cloud reach

Averett said Rackspace's distribution arrangement can help partners extend their reach in the cloud. He said Rackspace partners that already sell hosted Exchange and Rackspace email products can now add Office 365 to the mix. For partners just becoming a managed service provider or value-added reseller in the cloud space, the Rackspace relationship can help them jump into the market, with Rackspace's support backing them up, he added.

Rackspace's reseller and referral program for Azure and Office 365 is available to U.S. partners. The Azure program is available to partners in European Union and European Free Trade Association member countries.

Next Steps

Read more about Rackspace's initiative to simplify cloud adoption for enterprises

Learn how channel partners resell cloud-based security offerings

Find out about BitTitan's Azure migration kit

Dig Deeper on Cloud Reseller Strategies for Cloud Services

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Would you resell cloud offerings from a cloud distributor, or would you prefer to work directly with a cloud vendor?
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Actually, I avoid the cloud like the plague.  Until such time as they resolve security issues, and the bandwidth issue that they have, I will avoid it, and that is my recommendation to my clients.  I number of them have already been burned by the security issues.
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Thanks for the feedback. About what percentage of your customers have de-clouded/unclouded due to security (or other) issues? 
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The cloud 'distribution market' is proving challenging for all with Ingram, Avnet and the like all forming cloud portals to attempt to change their value proposition to the channel.  Cloud through channels in itself has been challenging for most, with many vendors opting to sell direct . Rackspace is likely to find it challenging to scale this proposition profitably based on the margins it will make on 3rd party cloud provision compared to its historical own offerings.  In addition many resellers will look to consolidate their breadth of cloud offerings and may find the broader portals on offer more attractive.
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