Intermedia Cuts Hosted Exchange Prices; Joins Microsoft Cloud Billing Debate

I ran the UK's leading Microsoft Dynamics CRM hosting business and we were a one-time Intermedia hosted Exchange reseller. Leibholz is right: lots of channel partners want to own the end-user billing relationship. The trouble is that few, if any, channel partners have any idea how difficult and expensive it is to build a subscription billing system. You need to handle: free trials, different subscription periods (monthly, quarterly, annually), pro-rated billing, bundling, add-ons, etc. I would rather that Intermedia or Microsoft took care of that for me, even if that means I don't get to bill my customer directly. Also, it's very dangerous to use future subscription payments as cashflow in advance of actually delivering the service. Most accountants would never allow that practice, and Leibholz's suggestion should be taken with caution. Imagine a customer that signs a twelve month contract paid upfront, you blow all that cash on a new hire, customer has a service issue and legally quits the contract and wants the remaining fee refunded. Oops.

Neil@1: Thanks for sharing your first-hand experiences. I appreciate your thoughts on the potential accounting issues with up-front cloud deals as well. I'll keep them in mind as we plan future coverage. Bo@2: I respect your thoughts. I respect Microsoft as well. But is it really "prestigious" to resell any third-party cloud service? Generally speaking I think channel partners should lead with their own brands. -jp

Exchange Expert: Thanks for sharing some perspectives. Are you a VAR, MSP or Intermedia rival? We always push comment authors to share some more background, so that readers can reach more informed conclusions about the discussion. My own two cents: I think the Intermedia price change may have been part of a long-term Intermedia plan. Did Office 365 influence Intermedia? In some ways I suspect yes. But I doubt the move was a "100% response" to Office 365. -jp

AK: I appreciate your perspectives but I'll respectfully disagree. Seems like service providers are beating Microsoft out the door with Microsoft's own applications. The big example is Hosted Exchange 2010 delivery. Service providers were at least a year ahead of MSFT on that one. -jp

Hi Jeremy: I will check in with Intermedia and its resellers during Microsoft Worldwide Partner Conference (WPC), which starts July 10 in Los Angeles. Thanks for the suggestion. -jp

David, We welcome comments from all readers. Thanks for explaining your thought process re: embracing Office 365. Can you disclose your company name? -jp

Rhonin: Intermedia a few months ago became an Office 365 syndication partner. I believe that means Intermedia can bill end customers directly for Office 365. Yet Intermedia still hosts Exchange on its own, and continues to have momentum with such major partners as Ingram Micro Cloud. Still, I need to do a deeper dive update on Intermedia and will reach out to the company for a conversation. Stay tuned and thank you, in the meantime, for re-starting this comment area. Best -jp