Transform Your Business

with the Power of Azure

Jan 2016
 Cloud Is Changing the Game
Partners are in a unique position to capitalize on the opportunity

80% 60% 52%

of businesses consider
of companies expect to of IT spending is choosing the best cloud
adopt cloud services within on growth applications provider to be of the utmost
the next 12 months1 importance3

$127B – IT’s WW public cloud services

spend by 2018 with a 22.8% CAGR1
80,000
of customers implementing

45%
of businesses consider

56%
cloud, prefer that their 60,000 22.8%
CAGR 1 using an external service
connection to public cloud 40,000 provider for help with their
is through a service provider cloud strategy
20,000

0
2010 2011 2012 2013 2014 2015 2016 2017
Worldwide Cloud Software Revenue

62%
of all deployments in 2015
will be in hybrid or public
cloud environments4 45%
of applications will be in the
cloud within 2 years $84.6B hybrid cloud market
size in 20192

1: Gartner, “Three Factors Will Significantly Impact Enterprise Cloud Use in the Near to Midterm Future”, http://www.gartner.com/newsroom/id/2581315, August 2013.
2: http://www.infosys.com/newsroom/press-releases/Pages/cloud-ecosystem-integrator.aspx
3: http://www.infosys.com/newsroom/press-releases/Pages/cloud-ecosystem-integrator.aspx
4: 451 Research, 2014. Hosting and Cloud Study 2014 Hosting and Cloud Go Mainstream.
Other sources: Gartner Press Release, “Gartner Says Nearly Half of Large Enterprises Will Have Hybrid Cloud Deployments by the End of 2017”, October 1, 2013; Forrester Research, Inc., The Public Cloud Market Is Now In Hypergrowth: Sizing The Public Cloud Market, 2014 To 2020. April 24, 2014
IDC eBook, sponsored by Microsoft, Successful Cloud Partners 2.0, May 2014
 Azure Cloud Solution Provider (CSP)
Microsoft has expanded the CSP program to more
partners with access to new Azure cloud services, more
markets and new capabilities.

Own the end-to-end customer lifecycle and

relationship with direct provisioning, billing, and Sell
Own and
support of Microsoft cloud services. Integrated
Control the
Offers and
Billing
Services
Partners create the offer, set the price, and own the
billing terms with their customers.
Provision,
Manage and
Partners can attach and/or bundle their own services Support
with Azure.

Talk to your Microsoft account representative about the CSP Program

Register your interest www.MicrosoftCSP.com
Visit http://aka.ms/cloudsolutionprovider to learn more
Azure in CSP Business Model
Rich partner economics Microsoft
• Wholesale discount of 15%
• Additional 6% channel incentives available
• Follows Azure direct pricing
CSP Partner 1 Tier CSP Partner 2 Tier
Partner opportunity in the value add and
managed services

Understand how pay-as-you-go impacts your GTM Reseller

Customer
Usage = Revenue in CSP
Understanding Pay-as-you-Go in CSP

Azure Services are created

Usage Microsoft bills Partner bills the
subscription in the Azure
occurs over the partner for customer for
“Sold” to Management
the month the usage the usage
Customer portal

Microsoft Azure
How Partners Benefit from CSP in Azure

Enhance Your Solution Unlock Lucrative Opportunities

Portfolio with Managed Services

Offer new cloud and hybrid solutions Increase profitability with a

to customers Managed Services practice around Azure
Enhance Your Solution Portfolio
Offer new cloud and hybrid solutions to customers based on IaaS services from Azure

Add new cloud services to your portfolio without

the cost of developing them in-house

Expand your existing solutions to other geographies

with Azure’s global presence. BI & Analytics Dev/Test
Scale infrastructure resources on-demand without
purchasing additional hardware

Stand out from your competition by offering a choice

of multiple clouds—in your datacenter or in Azure

Better protect data and meet compliance requirements

Expanded Capabilities
with Azure’s industry-leading certifications

Differentiate your solutions and increase wallet share

among customers by bundling complimentary Azure
services with your existing offerings Compliance
Enhanced Security
 Platform Services
Security & Compute Web and Mobile Developer Services Hybrid
Management Operations
Cloud Service Web API API Visual Azure
Services Fabric Apps Apps Management Studio SDK
Portal Azure AD
Connect Health
Remote Mobile Logic Notification Team Application
Active Batch App Apps Apps Hubs Project Insights
Directory AD Privileged
Identity
Management
Integration Analytics & IoT Data
Multi-Factor
Authentication Backup
Storage Biztalk Machine SQL SQL Data
Queues Services HDInsight Learning Database Warehouse
Automation
Operational
Insights
Hybrid Service Data Event Redis Search
Key Vault Connections Bus Factory Hubs Cache
Import/Export

Store / Media & CDN Stream Mobile Document

Marketplace Analytics Engagement DB Tables Site
Recovery
Content
Media Delivery
VM Image Gallery Services StorSimple
& VM Depot Network (CDN)

Infrastructure Services
Compute Storage Networking

Virtual Disk & Virtual Load Express Traffic VPN Application

BLOB Azure DNS Gateway
Machines Containers Premium Network Balancer Route Manager Gateway
storage files Storage

Datacenter Infrastructure (24 Regions, 19 Online)

Azure’s global presence takes you to
new markets
20+ regions online and growing

100+ datacenters

One of the top 3

networks in the world

2x AWS and 6x Google

—number
of offered regions

G Series—largest VMs
available in the market

Operational Announced
Azure Certifications Unlock New Segments
Global
ISO/IEC 27001 SOC 1 SOC 2 PCI DSS L1 version 3 Cloud Security Alliance ISO / IEC 27018
Cloud Security Matrix

United
States
FedRAMP HIPAA FIPS 140-2 Life Sciences GxP Family Educational Rights
(Healthcare) & Privacy Act

Regional
European Union United Kingdom China China Singapore Australian Signals
Model Clause G-Cloud Multi Layer CCCPPF Multi-Tier Cloud Directorate I-RAP
Protection Scheme Security Assessment

Coming
soon
Sarbanes Oxley Criminal Justice Defense Information ITAR Defense Information
Information System Systems Agency L2 Systems Agency L3-5
 Example Scenarios for CSP Partners
Extend Use Azure to Build New, Cloud only
your Datacenter with offerings
hybrid offerings

Support a Customer in Disaster Recovery of Disaster Recovery of Managed Highly Available Dev/Test
a New Region Existing Customer Apps SQL Databases SQL Server LOB Apps

Backup On-premises Backup On-premises

Desktop-as-a- N-Tier Apps (Windows Web Apps
Workloads Databases
Service or Linux)
Unlock Lucrative Opportunities
Increase profitability with a Managed Services practice Endpoint
and reach new customers globally with Azure Protection

Business Continuity
Planning
Add value to your solutions by offering managed
services—support, monitoring, deployment, migration,
consulting, etc.—in addition to the cloud services you
Cloud Usage
deliver to customers Management
Drive recurring revenue streams through a value-added
services upsell Infrastructure
Monitoring
Build deep relationships with customers as their trusted
advisor along their cloud journey

Enhance revenue opportunities as customers begin their

migration to public cloud services
Managed Services Lifecycle
Expand your practice bi-directionally to become the cloud vendor of choice

for customers along their cloud journey

Traditional SI Services Traditional MSP Services

Cloud Assessment Cloud Enablement Cloud Operations

• Education • Lift & Shift • Service Delivery

• SLA
• Assessments • App re-platform • Support
• Strategy definition & • New App Development • Operations & Monitoring
roadmap • App Optimization • Security
• Analytics
• Workload Migration • Tools & Processes
• Backup & Recovery
• App optimization
• Governance
• Compliance
• Managed Billing
Managed Services Opportunities
Cloud Assessment Cloud Enablement Cloud Operations

Cloud Readiness Systems Integration Proactive Backups & Hybrid Environment

Assessment Anti-Virus Monitoring Support
Datacenter Migration
Solution Analysis, Scope, Update & Patch Security Management &
& Design Management Identity Protection
Backup & Storage
Deployment
Data Architecture Design Reactive Help Desk Virtual Machine
Support Management & Upgrading
Disaster Recovery
Workflow Creation in Deployment
SharePoint User Rights & Account Network Monitoring
Management
Proof of Concept
User Experience Cloud Usage Forecasting
Consulting Performance and App
App re-platform
Troubleshooting
Billing Management
Training Database Infrastructure
Desktop & Device
Development Capacity Planning
Support/Management
Business Opportunity
Identification Deployment Services
VoIP Maintenance 3rd Party Application
Management

Critical Response Support

Remote Device Monitoring

Health Checks
Mobile Device Management
 Managed Services Business Models*
A La Carte Predefined Bundles – Flat Rate Predefined Bundles – % of Cloud Spend

Aligns to the Cloud MSP business model. MSP fees goes up

Aligns to traditional VAR/MSP model for support services. Services are charged based
as customer cloud spend goes up. Typical gross margins for these managed
on a flat monthly—or other unit (VMs, Service Request Hours, etc.)—rate
service bundles lie in the 40-50% range

*These models are used for illustrative purposes only and are not the only way to bundle services and sell to customers. All monetary values associated with these models are to be used as examples only.
 Cloud MSPs are moving towards a dynamic Pricing
Model
Charge customers as a percentage of cloud spend—actual percentage depends on the Managed Services
tier
Feb
Service Basic Advanced Premier
(20%) (30%) (40%) March
Azure Fundamentals – Subscription
ICON
management, OS patching, IaaS   
management, basic authentication
Usage and Billing management (Basic)–
Monthly Azure consumption reporting
  
Usage and Billing management April
(Advanced)– Capacity planning, usage
forecasts, billing concierge, usage forecasts

by workload/deptt Premier
Monitoring (basic)– OS monitoring, network
monitoring, ticket/service request logs, 24/7   
help desk
Monitoring (Advanced) – Workload/App Advanced
monitoring, log analytics, audit reporting,

alerting and proactive troubleshooting,
superior response time SLA (e.g. 15 min) Basic
Security management – firewall, antivirus,
security updates, data encryption, compliance   MSP revenue

Business Continuity Services – Automated

disaster recovery and backup, monitoring,   Customer Azure Spend
ICON and testing

The “Service” table above is an illustrative representation of potential Managed

Services packages/tiers. This example will be used when calculating sample
profitability scenarios.
 Empowering Partners
CSP has enabled partners to launch unique service offerings around Azure

ICON

Managed Cloud for Microsoft Azure Fanatical Support for Microsoft Azure
ICON
Azure Cloud Start Package
 Examples of CSP Partner Offers

ICON

ICON
In summary, CSP opens the gate for new revenue
streams
• Usage management, capacity planning
• Optimization: Improved user experience,
Managed Services

Performance, BI Capabilities, Security, Billing

management, Dev Ops management
• Outsourcing: Migrations, Cloud Integration,
Cloud managed
Workload discoverability services = More $$
• Monitoring/ Management:
Patching, Monitoring, Break Fix, Service
Management
Value add

Traditional Hybrid Offers Geo Expansion New App Advanced Services

Resell Development • Azure ML
• Disaster Recovery Supporting customer’s
datacenter • Multi-Cloud IaaS
• Backup growth without new capital• Dev Ops framework • HD Insight
• Dev/Test Scenarios
management • Cloud Marketplace
• Capacity Bursting investments • App Life Cycle
management
• Advanced Analytics
• Modern DW
• Identity & Access
Management • SAP/Oracle/Sharepoint • IOT Suite
on Azure • Power BI

Add new offers to your portfolio

Offer complexity
Azure business scenarios
(deep-dive)
CSP partners can offer managed services around
multiple Azure use cases
Extend Use Azure to Build New, Cloud only
your Datacenter with offerings
hybrid offerings

Support a Customer in Disaster Recovery of Disaster Recovery of Managed Highly Available Dev/Test
a New Region Existing Customer Apps SQL Databases SQL Server LOB Apps

Backup On-premises Backup On-premises

Desktop-as-a- N-Tier Apps (Windows Web Apps
Workloads Databases
Service or Linux)
Extend the Datacenter
(Hybrid offerings)
Multi-geo Support
Leverage Azure to support a customer in a new region where the customer/partner does not
have a datacenter presence
Scenario Description
This is a common partner scenario where an end customer has their primary location of
Profitability Model*
business in the same general region to where their partner is situated, but they also have $3,138
a branch office (or offices) in another region where the partner does not have any
datacenter presence/operations. By connecting to Azure, the partner can more easily Annual Revenue = $163,184 Managed

Managed
support the customer’s remote office in another region.

Services
Annual Profit = $43,306 Services
In this scenario, we are assuming that the partner is extending an n-tier app with 10 small

Total Monthly Revenue = $13,599

VMs for web-tier and three large VMs for DB tiers. Gross Margin = 27% ADVANCED
Tier
Partner Opportunity $2,197
Azure Spend: Year 1
To offer this scenario, partners will deploy the app on an Azure datacenter using 10 Azure Discount

Discount
Revenue
A1 VMs for a web tier, three D13 VMs with SQL Server Enterprise licenses, 5TB of

Revenue
additional storage, 50GB of additional networking, and a VPN connection. The total Azure
spend in this example is $8,264 per month. This factors in the CSP and Year 1 discounts CSP
(Azure spend before discounts amounts to $10,460). Discount
CSP Discount:
$8,264
Partners receive the typical 15% discount on Azure services as well as an additional 6%

discount in the first year of the CSP program (ending June 30, 2016). Based on the Azure
Spend in this example, the total discount per month is $2,197.
Managed Services:
In this example, a Managed Services bundle (ADVANCED) is applied—Azure
Fundamentals, Usage and Billing Management (Basic), Monitoring (Basic), Security
Management, and Business Continuity Services. The total markup for this ADVANCED
Managed Services tier is 30% of Azure spend per month (before discounts). All Managed
Services profitability calculations assume a 45% gross margin.
All monetary calculations are estimates and to be used as examples only. Microsoft does not claim that partners will be
able to achieve the revenue, profit, or margins associated with this model. All estimates are made in US dollars.
Azure Spend
Multi-Geo
Support
*Assumptions
The partner provides Azure A1 VMs (x10) for a web-tier, Azure D13 VMs (x3) with SQL Server Enterprise (x3) licenses for
a database tier, additional storage (5TB), additional networking (50GB), a VPN (50 DNS Zones / 50mil Queries)
connection and an ADVANCED Managed Services bundle to a customer every month. In this scenario, it is assumed the
partner has an existing relationship with the customer and is offering them additional services to support a net new
opportunity. All costs associated with the partner’s hosted solution are not factored into this example. It is also
assumed that the partner’s gross margins on managed services are 45%
Multi-geo Support
Leverage Azure to support a customer in a new region where the customer/partner does not
have a datacenter presence

Service Provider Cloud Azure (Australia East)

Web Tier (10x) SQL Tier (3x) Add’l Storage (5TB) Web Tier (10x) SQL Tier (3x) Add’l Storage (5TB)

VPN

N-Tier Application N-Tier Application

Add’l
Networking
(50GB) Customer Environment
Customer Environment

North America
Australia
*Assumptions
The partner provides Azure A1 VMs (x10) for a web-tier, Azure D13 VMs (x3) with SQL Server Enterprise (x3)
licenses for a database tier, additional storage (5TB), additional networking (50GB), a VPN (50 DNS Zones /
50mil Queries) connection and an ADVANCED Managed Services bundle to a customer every month. In this
scenario, it is assumed the partner has an existing relationship with the customer and is offering them
additional services to support a net new opportunity. All costs associated with the partner’s hosted solution are
not factored into this example. It is also assumed that the partner’s gross margins on managed services are
45%

Customer HQ Partner Datacenter Customer Branch Office

Disaster Recovery of On-premises Applications
Disaster recovery of existing customer apps in a partner/customer datacenter
to Azure using Azure Site Recovery*
Scenario Description Profitability Model*
In this scenario, the partner has an end customer running several applications in the partner’s $1,038
datacenter. To provide disaster recovery without the partner having to build out an additional
datacenter, the partner leverages Microsoft’s Azure Site Recovery (ASR) to replicate the application
from the partner environment to Azure for failover. Annual Revenue = $53,953 Managed

Managed
Services
In this scenario, we are assuming that the partner is going to provide protection and recovery services Annual Profit = $14,318 Services
to a mid-market customer with several mission critical applications running over 30 VMs (15 on mid- Gross Margin = 27% ADVANCED

Total Monthly Revenue = $4,497

size VMs like Azure A6 and 15 on large VMs like Azure D3). These VMs are virtualized on Hyper-V and
are being managed using System Center VMM in the partner datacenter and the partner is using Azure Tier
Site Recovery (ASR) VMM to Azure replication capabilities $726
Partner Opportunity Year 1
Discount

Discount
Revenue
Azure Spend:

Revenue
To offer this scenario, partners will replicate the application on Azure by using Azure Site recovery and
ExpressRoute for high performance. They will run a DR drill for 2 weeks every year using Azure DNS
services, Azure IaaS for DR drills and storage and bandwidth costs. The total Azure spend in this CSP
example is $2,732 per month. This factors in the CSP and Year 1 discounts (Azure spend before Discount
discounts amounts to $3,459). $2,732
CSP Discount:
Partners receive the typical 15% discount on Azure services as well as an additional 6% discount in the

Azure Spend
first year of the CSP program (ending June 30, 2016). Based on the Azure Spend in this example, the
total discount per month is $726. Disaster
Recovery
Managed Services:
In this example, a Managed Services bundle (ADVANCED) is applied—Azure Fundamentals, Usage and Services
Billing Management (Basic), Monitoring (Basic), Security Management, and Business Continuity
Services. The total markup for this ADVANCED tier is 30% of Azure spend per month (before
discounts). All Managed Services profitability calculations assume a 45% gross margin.
*Assumptions
The partner provides Site Recovery instances (x30 site-to-Azure), Azure ExpressRoute (100MB pipe), Azure DNS Services (100GB
bandwidth US), temporary A6 VMs for DR drills (x15), temporary D3 VMs for DR drills (x15), bandwidth for DR drills (6TB US), additional
All monetary calculations are estimates and to be used as examples only. Microsoft does not claim that partners will be storage (6TB LRS), and a ADVANCED Managed Services bundle to a customer every month. In this scenario, it is assumed the partner has
able to achieve the revenue, profit, or margins associated with this model. All estimates are made in US dollars. a similar existing customer workload running in their on-premises environment that they are looking to protect. All costs associated with
the partner’s hosted solution are not factored into this example. It is also assumed that the partner’s gross margins on managed services
are 45%
Disaster Recovery of On-premises Applications
Disaster recovery of existing customer apps in a partner/customer datacenter
to Azure using Azure Site Recovery*

Service Provider Azure

Virtual Machines (30x) Virtual
VirtualMachines
Machines(10x)
(30x) Customer Environment

ExpressRoute

System Center VMM DNSServices

DNS Services
ASR
VMM DNS
DNS
Customer Environment Customer Environment

Existing Connection

*Assumptions
The partner provides Site Recovery instances (x30 site-to-Azure), Azure ExpressRoute (100MB pipe), Azure DNS Services (100GB
bandwidth US), temporary A6 VMs for DR drills (x15), temporary D3 VMs for DR drills (x15), bandwidth for DR drills (6TB US), additional
storage (6TB LRS), and a ADVANCED Managed Services bundle to a customer every month. In this scenario, it is assumed the partner has
a similar existing customer workload running in their on-premises environment that they are looking to protect. All costs associated with
CustomerHQ
Customer HQ Partner Datacenter the partner’s hosted solution are not factored into this example. It is also assumed that the partner’s gross margins on managed services
are 45%
Backup On-premises Applications
Backup of existing customer applications running in a partner datacenter to Azure (using either
System Center Data Protection Manager to Azure or Azure Backup Server to Azure)
Scenario Description Profitability Model*
In this scenario, Microsoft Azure is the target for “backup” of an end customer’s workloads $148
running in the partner’s datacenter. The end customer content is backed up following a
routine backup schedule, with digital backups stored in Microsoft Azure. Annual Revenue = $10,656

Managed
Services
Annual Profit = $2,664 Managed
In this scenario, we are assuming that the partner is using System Center Data Protection Services
Gross Margin = 25%

Total Monthly Revenue = $888

Manager (DPM) or Azure Backup Server (ABS) to backup all the customer’s data spanning 50 BASIC Tier
instances on their own datacenters. ABS and DPM allow partners to use Azure as a backup
target for long-term retention needs. $155
Year 1
Partner Opportunity Discount

Discount
Revenue
Revenue
Azure Spend:
To offer this scenario, partners purchase 50 Azure Backup instances, and 10 TB of LRS storage
in Azure. The total Azure spend in this example is $585 per month. This factors in the CSP and CSP
Year 1 discounts (Azure spend before discounts amounts to $740). Discount
$585
CSP Discount:
Partners receive the typical 15% discount on Azure services, as well as an additional 6%

Azure Spend
discount in the first year of the CSP program (ending June 30, 2016). Based on the Azure Backup
Spend in this example, the total discount per month is $155. On-
Managed Services: premises
In this example a BASIC Managed Services bundle is applied—Azure Fundamentals, Usage Apps
and Billing Management (Basic), and Monitoring (Basic). The total markup for this BASIC tier is
20% of Azure spend per month (before discounts). All Managed Services profitability
calculations assume a 45% gross margin.
*Assumptions
The partner provides Azure Backup instances (x50) and 10 TB (LRS) of additional storage, and a BASIC Managed
All monetary calculations are estimates and to be used as examples only. Microsoft does not claim that partners will be Services bundle to their customer every month. In this scenario, it is assumed the partner is storing the customer’s
able to achieve the revenue, profit, or margins associated with this model. All estimates are made in US dollars. existing data on-premises and using Azure as the backup target. All costs associated with the partner’s hosted solution
are not factored into this example. It is also assumed that the partner’s gross margins on managed services are 45%
Backup On-premises Applications
Backup of existing customer applications running in a partner datacenter to Azure (using either
System Center Data Protection Manager to Azure or Azure Backup Server to Azure)

Service Provider Azure

Data Protection
Virtual Machines (50x) Manager VMs (1x) Virtual Machines (50x)

DPM Internet Azure

Backup

= Agent

Customer Environment Customer Environment

Existing Connection

*Assumptions
The partner provides Azure Backup instances (x50) and 10 TB (LRS) of additional storage, and a BASIC Managed
Services bundle to their customer every month. In this scenario, it is assumed the partner is storing the customer’s
existing data on-premises and using Azure as the backup target. All costs associated with the partner’s hosted solution
Customer HQ Partner Datacenter
are not factored into this example. It is also assumed that the partner’s gross margins on managed services are 45%
Backup Hosted Databases
Replication of existing Microsoft SQL databases running in a partner datacenter to Azure (using
Microsoft SQL AlwaysOn availability group technology)
Scenario Description Profitability Model*
In this scenario, a SQL Server is running in the partner’s environment, and a secondary of $2,469
the database is running in Microsoft Azure. The secondary could serve the purpose of a
disaster recovery replica of the SQL database, providing redundancy for operations, or the Annual Revenue = $177,768

Managed
Services
secondary could be in a different region to provide closer access to data services for the Annual Profit = $44,442 Managed
end customer in a region that the partner does not directly service. Services

Total Monthly Revenue = $14,814

Gross Margin = 25%
BASIC Tier
Partner Opportunity $2,592
Azure Spend:
In this example, partners purchase two Azure A1 VMs for a customer’s web tier, two Azure Year 1
D14 VMs for the SQL tier with SQL Server Enterprise license, and a VPN connection. The Discount

Discount
Revenue
total Azure spend in this example is $9,753 per month. This factors in the CSP and Year 1

Revenue
discounts (Azure spend before discounts amounts to $12,345).
CSP
CSP Discount:
Partners receive the typical 15% discount on Azure services as well as an additional 6% Discount
$9,753
discount in the first year of the CSP program (ending June 30, 2016). Based on the Azure
Spend in this example, the total discount per month is $2,592.

Azure Spend
Managed Services:
In this example a BASIC Managed Services bundle is applied—Azure Fundamentals, Usage Backup
and Billing Management (Basic), and Monitoring (Basic). The total markup for this basic tier Hosted
is 20% of Azure spend per month (before discounts). All Managed Services profitability Databases
calculations assume a 45% gross margin.

All monetary calculations are estimates and to be used as examples only. Microsoft does not claim that partners will be
able to achieve the revenue, profit, or margins associated with this model. All estimates are made in US dollars.
*Assumptions
The partner provides Azure A1 VMs (x2) as the customer’s web tier, Azure D14 VMs (x2) as the database tier, SQL Server
Enterprise (x2) licenses, VPN (50 DNS Zones / 50mil Queries) connectivity, and a BASIC Managed Services bundle to
their customer every month. In this scenario, it is assumed the partner is running existing customer SQL Server
deployment of a similar configuration in their on-premises datacenter. All costs associated with the partner’s hosted
solution are not factored into this example. It is also assumed that the partner’s gross margins on managed services are
45%
Backup Hosted Databases
Replication of existing Microsoft SQL databases running in a partner datacenter to Azure (using
Microsoft SQL AlwaysOn availability group technology)

Service Provider Cloud Azure

Web Tier Web Tier
SQL Tier (2x) SQL Tier (2x)
(2x) (2x)
VPN

Customer Environment Customer Environment

Existing Connection

*Assumptions
The partner provides Azure A1 VMs (x2) as the customer’s web tier, Azure D14 VMs (x2) as the database tier, SQL Server
Enterprise (x2) licenses, VPN (50 DNS Zones / 50mil Queries) connectivity, and a BASIC Managed Services bundle to
their customer every month. In this scenario, it is assumed the partner is running existing customer SQL Server
Customer HQ Partner Datacenter
deployment of a similar configuration in their on-premises datacenter. All costs associated with the partner’s hosted
solution are not factored into this example. It is also assumed that the partner’s gross margins on managed services are
45%
Hosted/On-premises SQL DR to Azure
Protect on-site SQL databases via SQL Server AlwaysOn

Scenario Description Profitability Model* $1,500

In this example scenario, a CSP partner can protect a SQL Server instance running in a hosted or on-
premises environment by replicating the database synchronously or asynchronously in Azure, providing
an affordable and reliable disaster recovery solution using SQL AlwaysOn. Databases running in Azure Setup Fee
VMs can also be used for read-only queries for applications, BI, or backup solutions. There is no need to $1,349
modify the application when the primary database goes down, since one of the secondary copies will
quickly assume the role of the primary without causing any application interference. Combine this Annual Revenue = $70,168 + $1,500
Managed

Managed
scenario with solution bundles such as monitoring, VM and DR deployment, architecture support,

Services
and/or SQL support to grow revenue and margin. In this profitability example, we assume that once the Annual Profit = $18,621 Services
replication occurs, the VMs remain running perpetually in Azure.
Gross Margin = 27% ADVANCED

Total Monthly Revenue = $5,847

Partner Opportunity Tier
Azure Spend:
$945
To offer this scenario, partners purchase two Azure A6 VMs with two SQL Server Enterprise licenses for
recovery purposes, Azure A2 VM for Active Directory replica as well as ExpressRoute connectivity for Year 1
high throughput service. The total Azure spend in this example is $3,553 per month. This factors in the Discount

Discount
Revenue
CSP and Year 1 discounts (Azure spend before discounts amounts to $4,498).

Revenue
CSP Discount:
1 Tier Partners receive the typical 15% discount on Azure services as well as an additional 6% discount CSP
in the first year of the CSP program (ending June 30, 2016). Based on the Azure Spend in this example, Discount
the total discount per month is $945. $3,553
Managed Services:

Azure Spend
In this example an ADVANCED Managed Services bundle is applied—Azure Fundamentals, Usage and
Billing Management (Advanced), Monitoring (Advanced), and Security Management. The total markup SQL
for this ADVANCED tier is 30% of Azure spend per month (before discounts). All Managed Services
profitability calculations assume a 45% gross margin. Recovery
Setup Fee:
to Azure
In this example, a one-time setup fee is charged to a customer to stand up the solution. The total price
for the Solution Architect’s time is $1,500.

*Assumptions

All monetary calculations are estimates and to be used as examples only. Microsoft does not claim that partners will be
able to achieve the revenue, profit, or margins associated with this model. All estimates are made in US dollars.
The partner provides Azure A6 VMs (x2), SQL Server Enterprise licenses (x2), Azure A2 VM (X1) for Active Directory, Azure
ExpressRoute (100MB pipe) all in West US and an ADVANCED Managed Services bundle to a customer every month, plus
an additional one-time setup fee comprised of 10 hours of labor from a Solution Architect. In this scenario, it is assumed
that the partner has an existing SQL and web app environment running in an on-premises datacenter. All costs associated
with the partner’s hosted solution are not factored into this example.
Hosted/On-premises SQL DR to Azure
Protect on-site SQL databases via SQL Server AlwaysOn

Service Provider Cloud Azure

Active Directory
Virtual Machines (x2) + SQL Domain Virtual Machines A6 (x2) + Virtual Machine
Server Enterprise (x2) Controller (x1) SQL Server Enterprise (x2) A2 (x1)

SQL SQL AD ExpressRoute SQL SQL AD

Web Tier

Customer Environment Customer Environment

Existing connection

*Assumptions
The partner provides Azure A6 VMs (x2), SQL Server Enterprise licenses (x2), Azure A2 VM (X1) for Active Directory, Azure
ExpressRoute (100MB pipe) all in West US and an ADVANCED Managed Services bundle to a customer every month, plus
an additional one-time setup fee comprised of 10 hours of labor from a Solution Architect. In this scenario, it is assumed
Customer HQ that the partner has an existing SQL and web app environment running in an on-premises datacenter. All costs associated
Partner Datacenter with the partner’s hosted solution are not factored into this example.
Azure Blob Backups
Backup hosted databases to Azure blobs for cost-effective, long-term retention
Scenario Description Profitability Model*
In this scenario, CSP partners can perform backup of databases running in hosted or on-premises
environments to Azure using Blob Storage. This provides an affordable, reliable, long-term backup
solution for databases, eliminating the complexity of dealing with tapes and traditional backup solutions
for an inexpensive solution. Using Azure blob storage, the data is replicated 3 times within the same $300

Setup Fee
Azure region at no additional cost and can also be replicated into other Azure regions improving
resilience. The data can also be restored on-premises, in hosted environments, or in Azure for reduced
RPO and RTO. Additionally, data in Azure is encrypted guaranteeing its safety. By offering long-term
backup retention for SQL databases, CSP partners can enrich current SQL offerings and provide Setup Fee
customers with greater data security. The solution can also be combined with service bundles.
$0.50
Partner Opportunity Year 1
Azure Spend: Discount

Total Monthly Revenue =

Discount
Revenue
To offer this scenario, partners purchase 100GB of Locally Redundant Storage (LRS). The total Azure

Revenue
spend in this example is $1.90 per month. This factors in the CSP and Year 1 discounts (Azure spend
before discounts amounts to $2.40). CSP
CSP Discount: Discount
$1.90

$2.90
Partners receive the typical 15% discount on Azure services as well as an additional 6% discount in the
first year of the CSP program (ending June 30, 2016). Based on the Azure Spend in this example, the total
discount per month is $0.50

Azure Spend
Setup Fee: Azure Blob
In this example, a one-time setup fee is charged to a customer to stand up the solution. The total price
for the Solution Architect’s time is $300. Backup
Added Value:
The goal of this scenario is not to generate high revenues or margins but to provide an inexpensive
backup solution to add to a partner service portfolio at a low cost to the partner.

All monetary calculations are estimates and to be used as examples only. Microsoft does not claim that partners will be
able to achieve the revenue, profit, or margins associated with this model. All estimates are made in US dollars.
*Assumptions
The partner provides 100GB of LRS Storage in Azure every month, plus an additional one-time
setup fee comprised of 2 hours of labor from a Solution Architect. In this scenario, it is assumed the
partner has an existing database on-premises that they are backing up. All costs associated with the
partner’s hosted solution are not factored into this example. It is also assumed that the partner’s
gross margins on managed services are 45%
Azure Blob Backups
Backup hosted databases to Azure blobs for cost-effective, long-term retention

Azure Blob Storage (100GB)

Service Provider Cloud
Existing
Domain Web App
Database
(100GB)
Controller (x1) (x1)
Azure (West US)
Redundant
Azure Blob Storage (100GB)
Internet Copy (LRS)

Customer Environment
Customer Environment

Existing connection

*Assumptions
The partner provides 100GB of LRS Storage in Azure every month, plus an additional one-time setup fee
comprised of 2 hours of labor from a Solution Architect. In this scenario, it is assumed the partner has an
Customer HQ Partner Datacenter
existing database on-premises that they are backing up. All costs associated with the partner’s hosted solution
are not factored into this example. It is also assumed that the partner’s gross margins on managed services are
45%
Build Cloud-only
offerings
Basic Managed SQL-as-a-Service
Quickly deploy SQL Server solutions and bundle Managed Services

Scenario Description Profitability Model*

In this example scenario a CSP partner can quickly deploy a SQL Server instance with an
Azure virtual machine. Using the new Resource Manager templates through the Azure $158
Portal, the deployment will be simple and fast. Backup and patching can be
automatically enabled through the new simplified SQL installation via Azure Resource Annual Revenue = $11,362

Managed
Manager in the new Azure Portal, ultimately reducing operational costs. Combined with Managed

Services
a Managed Services package, partners can offer monitoring, deployment and basic Annual Profit = $2,840
support options to grow revenue and margin. Services
Gross Margin = 25% BASIC Tier

Total Monthly Revenue = $947

Partner Opportunity
$166
Azure Spend:
To offer this scenario, partners purchase one Azure A6 VM with a SQL Server Standard Year 1
license. The total Azure spend in this example is $623 per month. This factors in the CSP Discount

Discount
Revenue
and Year 1 discounts (Azure spend before discounts amounts to $789).

Revenue
CSP Discount:
1 Tier Partners receive the typical 15% discount on Azure services as well as an
CSP
additional 6% discount in the first year of the CSP program (ending June 30, 2016). Discount
Based on the Azure Spend in this example, the total discount per month is $166. $623
Managed Services:

Azure Spend
In this example a BASIC Managed Services bundle is applied—Azure Fundamentals,
Usage and Billing Management (Basic), and Monitoring (Basic). The total markup for this Managed
BASIC tier is 20% of Azure spend per month (before discounts). All Managed Services SQL-as-a-
profitability calculations assume a 45% gross margin. Service

All monetary calculations are estimates and to be used as examples only. Microsoft does not claim that partners will be
able to achieve the revenue, profit, or margins associated with this model. All estimates are made in US dollars.
*Assumptions
The partner provides an Azure A6 VM (x1), a SQL Server Standard license (x1) in West US, and a BASIC Managed
Services bundle to their customer every month. This scenario assumes that this is a net new Azure opportunity for a
partner and no connection to a partner on-premises environment is required. . It is also assumed that the application is
running in Azure, but the costs and margin for the application is not included in the scenario
Basic Managed SQL-as-a-Service
Quickly deploy SQL Server solutions and bundle Managed Services

Managed Service Provider

Azure
Virtual Machines A6 Web Tier (1x)
(x1) + SQL Server
Standard (x1)

SQL
Internet
(Web tier not
factored into
calculation

Customer Environment

*Assumptions
The partner provides an Azure A6 VM (x1), a SQL Server Standard license (x1) in West US, and a BASIC Managed
Services bundle to their customer every month. This scenario assumes that this is a net new Azure opportunity for a
partner and no connection to a partner on-premises environment is required. . It is also assumed that the application is
running in Azure, but the costs and margin for the application is not included in the scenario
Customer
High Availability Managed SQL
Provide highly available SQL Server solutions in regions with no datacenter presence

$555
Scenario Description Profitability Model*
In this example scenario, CSP partners can install highly available SQL instances in Azure, Setup Fee
combined with application tier running in Azure. Partners can replicate databases directly in other $1,943
Azure regions providing geo-replicated disaster recovery for SQL. Because the partner is installing
a full version of SQL Server, all features and capabilities will be present. The instance can also be
customized using familiar tools. Additionally, the solution can be combined with a service bundle Annual Revenue = $101,025+$555 Managed

Managed
Services
offering including monitoring, deployment, migration, architecture for the SQL cluster, Annual Profit = $26,810
infrastructure best practices advise, and advanced support. Services
Gross Margin = 27% ADVANCED

Total Monthly Revenue = $8,419

Partner Opportunity Tier
Azure Spend: $1,360
To offer this scenario, partners purchase two Azure A2 for Active Directory, two Azure D13 VMs
with two SQL Server Enterprise licenses that may or may not run in the same azure region. The Year 1
total Azure spend in this example is $5,116 per month. This factors in the CSP and Year 1 discounts Discount

Discount
Revenue
(Azure spend before discounts amounts to $6,476).

Revenue
CSP Discount:
1 Tier Partners receive the typical 15% discount on Azure services as well as an additional 6% CSP
discount in the first year of the CSP program (ending June 30, 2016). Based on the Azure Spend in Discount
this example, the total discount per month is $1,360. $5,116
Managed Services:
In this example an ADVANCED Managed Services bundle is applied—Azure Fundamentals, Usage

Azure Spend
and Billing Management (Advanced), Monitoring (Advanced), and Security Management. The total High
markup for this ADVANCED tier is 30% of Azure spend per month (before discounts). All Managed Availability
Services profitability calculations assume a 45% gross margin.
Managed
Setup Fee:
In this example, a one-time setup fee is charged to a customer to stand up the solution. The total
SQL
price for the Solution Architect’s time is $555.

All monetary calculations are estimates and to be used as examples only. Microsoft does not claim that partners will be
able to achieve the revenue, profit, or margins associated with this model. All estimates are made in US dollars.
*Assumptions
The partner provides Azure D13 VMs (x2), SQL Server Enterprise licenses (x2), Azure A2 VM (X2) for Active Directory, all
based in West or East US, and ADVANCED Managed Services bundle to their customer every month, plus an additional
one-time setup fee comprised of 3 hours of labor from a Solution Architect. This scenario assumes that an application
(web or LoB) is running in Azure VM, but the costs for the application are not factored. this is a net new Azure
opportunity for a partner and no connection to a partner on-premises environment is required.
High Availability Managed SQL
Provide highly available SQL Server solutions in regions
with no datacenter presence

Managed Service Provider

Azure (East US)
Azure (West US) VM D13 (x1)
+ SQL Server
Web Tier (1x) Active Directory
Virtual Machine
Enterprise (x1) A2 (x1)
VM D13 (x1) Web Tier (1x) Active Directory
+ SQL Server Virtual Machine
Enterprise (x1) A2 (x1)
SQL AD

SQL AD
(Web tier not
Internet factored into AD Replica
calculation
(Web tier not
factored into
calculation Customer Environment
Customer Environment

*Assumptions
The partner provides Azure D13 VMs (x2), SQL Server Enterprise licenses (x2), Azure A2 VM (X2) for Active
Directory, all based in West or East US, and ADVANCED Managed Services bundle to their customer
every month, plus an additional one-time setup fee comprised of 3 hours of labor from a Solution
Architect. This scenario assumes that an application (web or LoB) is running in Azure VM, but the costs for
the application are not factored. this is a net new Azure opportunity for a partner and no connection to a
Customer partner on-premises environment is required.
Premium Managed SQL
Deploy SQL Server on high performance VMs for advanced customer solutions

$900
Scenario Description Profitability Model*
In this scenario CSP partners can deploy SQL Enterprise in Azure using a high performance VM to run BI Setup Fee
services or data warehousing solutions or staging environment by replicating a customer's $2,470
on-premises/hosted data to Azure through AlwaysOn. Running SQL in Azure high performance VMs gives
customers the right speed charging SQL per usage per hour. Using the simplified experience to install and
configure SQL thru CSP, partners can reduce costs, eliminate errors, improve time to market, and meet Annual Revenue = $103,757+$900 Managed

Managed
Services
customer requirements. The solution can be combined with your Managed Services bundle by offering Annual Profit = $28,904+$618
monitoring, deployment, architecture for BI, data warehouse or N-1 staging, DBA consulting services, best Services
Gross Margin = 28% PREMIUM

Total Monthly Revenue = $8,646

practices, tuning, and data security.
Tier
Partner Opportunity $1,297
Azure Spend:
To offer this scenario, partners purchase one Azure D14 VM with one SQL Server Enterprise license and a Year 1
VPN connection. The total Azure spend in this example is $4,879per month. This factors in the CSP and Year Discount

Discount
Revenue
1 discounts (Azure spend before discounts amounts to $6,176).

Revenue
CSP Discount:
1 Tier Partners receive the typical 15% discount on Azure services as well as an additional 6% discount in the CSP
first year of the CSP program (ending June 30, 2016). Based on the Azure Spend in this example, the total Discount
discount per month is $1,267. $4,879
Managed Services:
In this example a PREMIUM Managed Services bundle is applied—Advanced Monitoring for VMs and SQL,

Azure Spend
advanced support for VMs and SQL, and DBA consulting Services for database tuning, security and
performance. The total markup for this PREMIUM tier is 40% of Azure spend per month (before discounts). Premium
All Managed Services profitability calculations assume a 45% gross margin. Managed
Setup Fee: SQL Server
In this example, a one-time setup fee is charged to a customer to stand up the solution. The total price for
the Solution Architect’s time is $900.

*Assumptions
The partner provides Azure D14 VM (x1), SQL Server Enterprise license (x1), VPN (50 DNS Zones / 50mil Queries)
All monetary calculations are estimates and to be used as examples only. Microsoft does not claim that partners will be
connectivity all based in West US, and a PREMIUM Managed Services bundle to a customer every month, plus an
able to achieve the revenue, profit, or margins associated with this model. All estimates are made in US dollars.
additional one-time setup fee comprised of 6 hours of labor from a Solution Architect. This scenario assume that there is
an hosted or on-premises environment running primary database and application and the secondary replica in Azure
will be used for BI, data warehouse or staging. The costs for the on-premises environment, BI app, and Active Directory
running in Azure are not factored
Premium Managed SQL
Deploy SQL Server on high performance VMs for advanced customer solutions

Service Provider Azure

Virtual Machines (x2) + SQL Domain Virtual Machines A6 (x2) + Domain
Server Enterprise (x2) Controller (x1) SQL Server Enterprise (x2) Controller (x1)

Run BI solutions or
SQL SQL AD VPN SQL
Run data warehouse or AD

Run SQL staging

Web Tier BI Application

Customer Environment Customer Environment

Existing connection

*Assumptions
The partner provides Azure D14 VM (x1), SQL Server Enterprise license (x1), VPN (50 DNS Zones / 50mil Queries)
connectivity all based in West US, and a PREMIUM Managed Services bundle to a customer every month, plus an
additional one-time setup fee comprised of 6 hours of labor from a Solution Architect. This scenario assume that there
is an hosted or on-premises environment running primary database and application and the secondary replica in Azure
Customer HQ will be used for BI, data warehouse or staging. The costs for the on-premises environment, BI app, and Active
Partner Datacenter Directory running in Azure are not factored
LOB Apps on Azure IaaS
Line of business applications (e.g. SharePoint) running in Azure

Scenario Description Profitability Model*

In this scenario, an End Customer has a need to run a high availability and high capacity $6,176
application like an enterprise SharePoint server farm, and instead of draining the
Service Provider resources to host and manage this environment, Microsoft Azure is Annual Revenue = $259,392 Managed

Managed
Services
leveraged to run this environment. Annual Profit = $72,259 Services

Total Monthly Revenue = $21,616

Gross Margin = 28% PREMIUM
Partner Opportunity Tier
Azure Spend: $3,242
In this example, we assume that a customer deployment requires four Azure A6 VMs for
SharePoint frontend, two Azure D14 VMs for the SharePoint backend, one Azure A6 VM Year 1
as the SharePoint index server, two SQL Server Enterprise licenses, 5TB of additional Discount

Discount
Revenue
Revenue
storage, and 50GB of additional networking. The total Azure spend in this example is
$12,198per month. This factors in the CSP and Year 1 discounts (Azure spend before
discounts amounts to $15,440). CSP
Discount
CSP Discount: $12,198
Partners receive the typical 15% discount on Azure services as well as an additional 6%
discount in the first year of the CSP program (ending June 30, 2016). Based on the

Azure Spend
Azure Spend in this example, the total discount per month is $3,242.
Highly
Managed Services:
In this example, the customer agrees to purchase the PREMIUM Managed Services Available
bundle due to the critical nature of the application. This includes managed services on SharePoint
Azure Fundamentals, Usage and Billing Management (Advanced), Monitoring
(Advanced), Security Management, and Business Continuity Services. The total markup
for this premium tier is 40% of Azure spend per month (before discounts). All Managed
Services profitability calculations assume a 45% gross margin. *Assumptions
The partner provides Azure A6 VMs (x4) as the SharePoint frontend, Azure D14 VMs (x2) as the SharePoint backend,
All monetary calculations are estimates and to be used as examples only. Microsoft does not claim that partners will be SQL Server Enterprise (x2) licenses, 5TB of additional storage (LRS), 50GB of additional networking (500GB Bandwidth
able to achieve the revenue, profit, or margins associated with this model. All estimates are made in US dollars. US), and a PREMIUM Managed Services bundle to their customer every month. This scenario assumes that this is a net
new Azure opportunity for a partner and no connection to a partner on-premises environment is required. It is also
assumed that the partner’s gross margins on managed services are 45%
LOB Apps on Azure IaaS
Line of business applications (e.g. SharePoint) running in Azure

Managed Service Provider

Azure
SharePoint SharePoint Index Add’l Storage
Frontend (4x) Server (1x) (5TB)

SQL
Internet

SharePoint
Add’l Backend (2x)
Networking
(50GB) Customer
Environment

*Assumptions
The partner provides Azure A6 VMs (x4) as the SharePoint frontend, Azure D14 VMs (x2) as the SharePoint
backend, SQL Server Enterprise (x2) licenses, 5TB of additional storage (LRS), 50GB of additional networking
(500GB Bandwidth US), and a PREMIUM Managed Services bundle to their customer every month. This
scenario assumes that this is a net new Azure opportunity for a partner and no connection to a partner on-
Customer premises environment is required. It is also assumed that the partner’s gross margins on managed services
are 45%
LOB Apps on Azure IaaS
Highly available line of business applications (e.g. SharePoint) running in Azure in a dual
datacenter configuration
Scenario Description Profitability Model*
In this scenario, an end customer is already running a high availability and high capacity $7,302
application like an enterprise SharePoint server farm, and has a desire to also run SharePoint
services in Microsoft Azure, extending SharePoint in two separate datacenters for load balancing, Annual Revenue = $306,671 Managed

Managed
Services
disaster recovery or geo expansion purposes. Annual Profit = $85,430 Services

Total Monthly Revenue = $25,556

Gross Margin = 28% PREMIUM
Partner Opportunity Tier
Azure Spend: $3,833
In this example, just like in the previous example, we assume that a customer deployment Year 1
requires four Azure A6 VMs for SharePoint frontend, two Azure D14 VMs for the SharePoint
Discount

Discount
Revenue
backend, one Azure A6 VM as the SharePoint index server, two SQL Server Enterprise licenses,

Revenue
5TB of additional storage, 50GB of additional networking, ExpressRoute for high performance
throughput connecting partner datacenter to Azure, Azure DNS services, and Azure Traffic
Manager. The total Azure spend in this example is $14,421 per month. This factors in the CSP and
CSP
Year 1 discounts (Azure spend before discounts amounts to $18,254). Discount
$14,421
CSP Discount:

Partners receive the typical 15% discount on Azure services as well as an additional 6% discount
in the first year of the CSP program (ending June 30, 2016). Based on the Azure Spend in this
example, the total discount per month is $3,833.
Managed Services:
In this example a PREMIUM Managed Services bundle is applied—Azure Fundamentals, Usage
and Billing Management (Advanced), Monitoring (Advanced), Security Management, and
Business Continuity Services. The total markup for this premium tier is 40% of Azure spend per
month (before discounts). All Managed Services profitability calculations assume a 45% gross
margin.
All monetary calculations are estimates and to be used as examples only. Microsoft does not claim that partners will be
able to achieve the revenue, profit, or margins associated with this model. All estimates are made in US dollars.
Azure Spend
Highly
Available
SharePoint
(Dual DC)
*Assumptions
The partner provides Azure A6 VMs (x4) as the SharePoint frontend, Azure D14 VMs (x2) as the SharePoint backend,
SQL Server Enterprise (x2) licenses, 5TB of additional storage (LRS), 50GB of additional networking (500GB Bandwidth
US), ExpressRoute (500MB pipe), Azure DNS (100 DNS Zones / 100mil Queries), Traffic Manager (assuming 50 million
DNS queries per month, and 8 Azure and 8 external endpoints), and a PREMIUM Managed Services bundle to their
customer every month. This scenario assumes that the partner has a similar SharePoint environment running in their
own environment on-site. All costs associated with the partner’s hosted solution are not factored into this example. It
is also assumed that the partner’s gross margins on managed services are 45%
LOB Apps on Azure IaaS
Highly available line of business applications (e.g. SharePoint) running in Azure in a dual
datacenter configuration

Service Provider Cloud Azure

Managed Service Provider

SharePoint SharePoint Index Add’l Storage SharePoint SharePoint Index Add’l Storage
Frontend (4x) Server (1x) (5TB) Frontend (4x) Server (1x) (5TB)

ExpressRoute
DNS
Services

SharePoint SharePoint
Backend (2x) Traffic Add’l Backend (2x) DNS
Manager Networking
(50GB)

Existing Connection

*Assumptions
The partner provides Azure A6 VMs (x4) as the SharePoint frontend, Azure D14 VMs (x2) as the SharePoint
backend, SQL Server Enterprise (x2) licenses, 5TB of additional storage (LRS), 50GB of additional networking
(500GB Bandwidth US), ExpressRoute (500MB pipe), Azure DNS (100 DNS Zones / 100mil Queries), Traffic
Manager (assuming 50 million DNS queries per month, and 8 Azure and 8 external endpoints), and a
PREMIUM Managed Services bundle to their customer every month. This scenario assumes that the partner
has a similar SharePoint environment running in their own environment on-site. All costs associated with the
Customer partner’s hosted solution are not factored into this example. It is also assumed that the partner’s gross
Service Provider Datacenter margins on managed services are 45%
Dev/Test on Azure
Leverage Azure for Dev/Test in high-scale scenarios

Scenario Description Profitability Model*

In this scenario, the partner would offer Microsoft Azure VMs (either directly or white- $3,460
labelled) to offer a large, scalable Dev/Test environment to its customers. Rather than
having a service provider exhaust internal datacenter capacity spinning up hundreds or Annual Revenue = $249,120

Managed
Services
thousands of basic VMs, the service provider leverages Azure for this end customer’s need. Annual Profit = $62,280 Managed
Services

Total Monthly Revenue = $20,760

Gross Margin = 25%
Partner Opportunity BASIC Tier
Azure Spend: $3,633
In this example, the customer ends up spinning 250 Azure A1 VMs for basic Dev/Test
purposes, Azure Automation, and 12.5TB of additional storage. The total Azure spend in Year 1
this example is $13,667per month. This factors in the CSP and Year 1 discounts (Azure Discount

Discount
Revenue
spend before discounts amounts to $17,300).

Revenue
CSP Discount:|
Partners receive the typical 15% discount on Azure services as well as an additional 6%
CSP
discount in the first year of the CSP program (ending June 30, 2016). Based on the Azure Discount
Spend in this example, the total discount per month is $3,633.
$13,667
Managed Services:

Azure Spend
In this example a BASIC Managed Services bundle is applied—Azure Fundamentals, Usage
and Billing Management (Basic), and Monitoring (Basic). The total markup for this BASIC Azure
tier is 20% of Azure spend per month (before discounts). All Managed Services profitability Dev/Test
calculations assume a 45% gross margin.

All monetary calculations are estimates and to be used as examples only. Microsoft does not claim that partners will be
able to achieve the revenue, profit, or margins associated with this model. All estimates are made in US dollars.
*Assumptions
The partner provides Azure A1 VMs (x250) for Dev/Test purposes, Azure Automation, 12.5TB additional storage (LRS),
and a BASIC Managed Services bundle to their customer every month. This scenario assumes that this is a net new
Azure opportunity for a partner and no connection to a partner on-premises environment is required. It is also
assumed that the partner’s gross margins on managed services are 45%
Dev/Test on Azure
Leverage Azure for Dev/Test in high-scale scenarios

Managed Service Provider

Azure
Virtual Machines (250x)

SQL
Internet

Automation
Imaging
Dev/Test Validation Customer
Reporting Environment

*Assumptions
The partner provides Azure A1 VMs (x250) for Dev/Test purposes, Azure Automation, 12.5TB additional
storage (LRS), and a BASIC Managed Services bundle to their customer every month. This scenario
assumes that this is a net new Azure opportunity for a partner and no connection to a partner on-
Customer premises environment is required. It is also assumed that the partner’s gross margins on managed services
are 45%
Desktop-as-a-Service
Hosting VDI environments in Azure
Scenario Description Profitability Model*
In this scenario, an organization that has been running its own VDI environment on-premises is looking to
move their VDI environment to the cloud. Rather than the service provider exhausting internal datacenter $188
capacity to this specialized customer need, the end customer would have their VDI server farm built in
Microsoft Azure. The service provider marks up the cost of the Azure services to create a predictable
revenue and profit model, and adds on additional services to the end customer. The example below Annual Revenue = $9,750 Managed

Managed
Services
assumes one Azure A6 VM is used to power 15-20 Remote desktop sessions for the customer – with each Annual Profit = $2,587 Services
remote session being used to support branch office employees running Office 365, basic web surfing, and
some light LOB applications. The example below assumes that the partner is passing on the Azure direct Gross Margin = 27% ADVANCED

Total Monthly Revenue = $813

costs to the customer and only charging for its value add. In another scenario, the partner may white- Tier
label Azure and markup desktops and charge per user, per login, per machine, or per instance of remote $131
desktop. As an example, a partner can charge $50/month for each RDSH session.
Year 1
Partner Opportunity Discount

Discount
Revenue
Revenue
Azure Spend:
In this example, partners purchase two Azure A1 VMs to serve as the RDSH Gateway and FE Server and CSP
one Azure A6 VM to act as the RDSH Host Server. The total Azure spend in this example is $494 per
month. This factors in the CSP and Year 1 discounts (Azure spend before discounts amounts to $625). Discount
$494
CSP Discount:
Partners receive the typical 15% discount on Azure services, as well as an additional 6% discount in the

Azure Spend
first year of the CSP program (ending June 30, 2016). Based on the Azure Spend in this example, the total
discount per month is $131. Desktop-
as-a-
Managed Services:
In this example, a Managed Services bundle (ADVANCED) is applied—Azure Fundamentals, Usage and Service
Billing Management (Basic), Monitoring (Basic), Security Management, and Business Continuity Services.
The total markup for this ADVANCED tier is 30% of Azure spend per month (before discounts). All
Managed Services profitability calculations assume a 45% gross margin.
*Assumptions
The partner provides Azure A1 VMs (x2), Azure A6 VMs (x1), and an ADVANCED Managed Services bundle to their
All monetary calculations are estimates and to be used as examples only. Microsoft does not claim that partners will be customer every month. This scenario assumes that this is a net new Azure opportunity for a partner and no connection
able to achieve the revenue, profit, or margins associated with this model. All estimates are made in US dollars. to a partner on-premises environment is required. It is also assumed that the partner makes 45% gross margins on
managed services
Desktop-as-a-Service
Hosting VDI environments in Azure

Managed Service Provider

Azure
Remote Desktop
RDHS Backup (1x)
Session Host (1x)

Customer Employees
SQL
RDHS Gateway (1x)
Internet

Customer Environment

*Assumptions
The partner provides Azure A1 VMs (x2), Azure A6 VMs (x1), and an ADVANCED Managed Services
bundle to their customer every month. This scenario assumes that this is a net new Azure opportunity
for a partner and no connection to a partner on-premises environment is required. It is also assumed
that the partner makes 45% gross margins on managed services
Customer
N-tier Apps (Windows)
N-tier Windows-based app powering a high scale website

Scenario Description Profitability Model*

In this scenario, the end customer has a high scale B2C website that they want to be able to handle $56,852
thousands of requests per second. The website traffic peaks by about 30% in the holiday season. The end
customer’s users are primarily based in a single geographic region, but wants redundancy within the region Annual Revenue = $2,387,784 Managed

Managed
for website continuity. The website runs entirely on the Windows stack and uses ASP, .NET, SQL, and other

Services
Windows technologies. While the service provider could host this application, the resources required to Annual Profit = $665,168 Services

Total Monthly Revenue = $198,982

provide the desired SLAs may be more extensive than the service provider wants to accommodate, and Gross Margin = 28% PREMIUM
instead the service provider leverages Microsoft Azure to pay only for resources consumed and take Tier
advantage from cloud’s utility economics.
$29,847
Partner Opportunity Year 1
Discount

Discount
Revenue
Azure Spend:

Revenue
In this example, partners purchase 500 Azure A1 VMs to serve as the web tier, 18 Azure D14 VMs to serve
as the database tier, and 18 corresponding SQL Server Enterprise licenses. The total Azure spend in this
example is $112,283 per month. This factors in the CSP and Year 1 discounts (Azure spend before discounts CSP
amounts to $142,130). This is assuming an average traffic day. In reality, the number of VMs will fluctuate Discount
up or down by up to 30% according to demand. $112,283
CSP Discount:

Azure Spend
Partners receive the typical 15% discount on Azure services as well as an additional 6% discount in the first
year of the CSP program (ending June 30, 2016). Based on the Azure Spend in this example, the total N-Tier
discount per month is $29,847. App –
Managed Services: Windows
In this example a PREMIUM Managed Services bundle is applied—Azure Fundamentals, Usage and Billing Based
Management (Advanced), Monitoring (Advanced), Security Management, and Business Continuity Services.
The total markup for this PREMIUM tier is 40% of Azure spend per month (before discounts). All Managed
Services profitability calculations assume a 45% gross margin.
*Assumptions
The partner provides Azure A1 VMs (x500), Azure D14 VMs (x18), SQL Server Enterprise licenses (x18), and a PREMIUM
All monetary calculations are estimates and to be used as examples only. Microsoft does not claim that partners will be Managed Services bundle to their customer every month. This scenario assumes that this is a net new Azure
able to achieve the revenue, profit, or margins associated with this model. All estimates are made in US dollars. opportunity for a partner and no connection to a partner on-premises environment is required. It is also assumed that
the partner makes 45% gross margins on managed services
N-tier Apps (Windows)
N-tier Windows-based app powering a high scale website

Managed Service Provider

Azure
Web Tier Database
(500x) Tier (18x)

SQL SQL

SQL
Internet SQL SQL

SQL SQL

*Assumptions
The partner provides Azure A1 VMs (x500), Azure D14 VMs (x18), SQL Server Enterprise licenses (x18),
and a PREMIUM Managed Services bundle to their customer every month. This scenario assumes that
this is a net new Azure opportunity for a partner and no connection to a partner on-premises
environment is required. It is also assumed that the partner makes 45% gross margins on managed
services
Customer
N-tier Apps (LAMP)
N-tier LAMP app powering a high scale website

Scenario Description Profitability Model*

In this scenario, the end customer has a high scale B2C website that they want to be able to handle $24,711
thousands of requests per second. The website traffic peaks by about 30% in the holiday season.
The end customer’s users are primarily based in a single geographic region, but wants redundancy Annual Revenue = $1,037,870 Managed

Managed
Services
within the region for website continuity. The website runs on an existing Linux-based configuration Annual Profit = $289,121 Services
that includes Apache Web Services. While the service provider could host this application, the

Total Monthly Revenue = $86,489

resources required to provide the desired SLAs may be more extensive than the service provider Gross Margin = 28% PREMIUM
wants to accommodate, and instead the service provider leverages Microsoft Azure to pay only for Tier
resources consumed and take advantage from cloud’s utility economics. $12,973
Year 1
Partner Opportunity Discount

Discount
Revenue
Revenue
Azure Spend:
In this example, partners purchase 500 Azure A1 VMs to serve as the web tier and 18 Azure D14 CSP
VMs to serve as the database tier. The total Azure spend in this example is $48,805 per month. This Discount
factors in the CSP and Year 1 discounts (Azure spend before discounts amounts to $61,778). $61,778
CSP Discount:

Azure Spend
Partners receive the typical 15% discount on Azure services as well as an additional 6% discount in
the first year of the CSP program (ending June 30, 2016). Based on the Azure Spend in this example, N-Tier
the total discount per month is $12,973. App –
Linux
Managed Services:
In this example a PREMIUM Managed Services bundle is applied—Azure Fundamentals, Usage and Based
Billing Management (Advanced), Monitoring (Advanced), Security Management, and Business
Continuity Services. The total markup for this PREMIIUM tier is 40% of Azure spend per month
(before discounts). All Managed Services profitability calculations assume a 45% gross margin. *Assumptions
The partner provides Azure A1 VMs (x500), Azure D14 VMs (x18), and a PREMIUM Managed Services bundle to their
All monetary calculations are estimates and to be used as examples only. Microsoft does not claim that partners will be customer every month. This scenario assumes that this is a net new Azure opportunity for a partner and no connection
able to achieve the revenue, profit, or margins associated with this model. All estimates are made in US dollars. to a partner on-premises environment is required. All additional charges for 3rd party solutions are not included in the
monetary estimates. It is also assumed that the partner makes 45% gross margins on managed services
N-tier Apps (LAMP)
N-tier LAMP app powering a high scale website

Managed Service Provider

Azure
Web Tier Database Puppet
(500x) Tier (18x) Enterprise (6x)

SQL SQL

SQL
Internet SQL SQL

SQL SQL

(Puppet
expenses not
Customer Environment factored into
calculation)

*Assumptions
The partner provides Azure A1 VMs (x500), Azure D14 VMs (x18), and a PREMIUM Managed Services
bundle to their customer every month. This scenario assumes that this is a net new Azure opportunity for
a partner and no connection to a partner on-premises environment is required. All additional charges for
3rd party solutions are not included in the monetary estimates. It is also assumed that the partner makes
45% gross margins on managed services
Customer
Highly Scalable Web-app
Run a highly scalable web-app with Azure PaaS services

Scenario Description Profitability Model*

In this scenario, the end customer has a high scale B2C web application that they want to $732
be able to handle hundreds of requests per second (peaking by 30% more in the holiday
season), but would prefer to get out of the “server management” business and have their Annual Revenue = $30,748

Managed
Services
application scale in a Platform-as-a-Service model. The partner decides to use Azure PaaS Annual Profit = $8,565 Managed
offerings (Azure AppService, SQL Database) to power the application infrastructure. Services
Gross Margin = 28%

Total Monthly Revenue = $2,196

BASIC Tier
Partner Opportunity $384
Azure Spend: Year 1
In this example, partners purchase fifty App Serve web instances, an elastic database, a Discount

Discount
Revenue
medium App Gateway, 1TB outbound queries, 50M Traffic Manager, 1TB CDN, 5TB of Blob

Revenue
Storage (GRS) and DNS services. The total Azure spend in this example is $1,446 per month.
This factors in the CSP and Year 1 discounts (Azure spend before discounts amounts to $1,830). CSP
CSP Discount: Discount
Partners receive the typical 15% discount on Azure services as well as an additional 6% $1,446
discount in the first year of the CSP program (ending June 30, 2016). Based on the Azure Spend
in this example, the total discount per month is $384.

Managed Services:
In this example a PREMIUM Managed Services bundle is applied—Azure Fundamentals, Usage
and Billing Management (Advanced), Monitoring (Advanced), Security Management, and
Business Continuity Services. The total markup for this premium tier is 40% of Azure spend per
month (before discounts). All Managed Services profitability calculations assume a 45% gross
margin.
All monetary calculations are estimates and to be used as examples only. Microsoft does not claim that partners will be
able to achieve the revenue, profit, or margins associated with this model. All estimates are made in US dollars.
Azure Spend
PaaS App
Scaling
*Assumptions
The partner provides App Serve – Shared web instances (x50 – Shared core / .5GB RAM / 1GB storage), eDTU
(database) - x400 (400 eDTUs / 39GB Pool / 5 max eDTU per DB), medium App Gateway, Outbound Transfer (1TB US),
Traffic Manager (50 million queries), CDN (1TB US), 1TB Blob Storage (GRS), DNS service (1000 DNS Zones / 1bil
Queries), and a BASIC Managed Services bundle to a customer every month. This scenario assumes that this is a net
new Azure opportunity for a partner and no connection to a partner on-premises environment is required. It is also
assumed that the partner makes 45% gross margins on managed services
Highly Scalable Web-app
Run a highly scalable web-app with Azure PaaS services

End users

Managed Service Provider

CDN
Azure
Web Tier (50x) eDTU (database) - CDN (1TB)
Azure Traffic x400
Manager
Medium App Blob Storage
SQL Gateway (5TB)

End users 1TB Outbound

Queries
CDN

CDN

End users *Assumptions

The partner uses App Serve – Shared web instances (x50 – Shared core / .5GB RAM / 1GB storage), eDTU
(database) - x400 (400 eDTUs / 39GB Pool / 5 max eDTU per DB), medium App Gateway, Outbound
Transfer (1TB US), Traffic Manager (50 million queries), CDN (1TB US), 1TB Blob Storage (GRS), DNS service
(1000 DNS Zones / 1bil Queries), and a BASIC Managed Services bundle to a customer every month. This
scenario assumes that this is a net new Azure opportunity for a partner and no connection to a partner
on-premises environment is required. It is also assumed that the partner makes 45% gross margins on
managed services