Evolution not Revolution – Microsoft’s Partnering Strategy

July 23, 2008 at 8:00 am Leave a comment

By Diane Krakora

As Alison Watson, Microsoft’s Corporate Vice President, Worldwide Partner Group, laid out the high level next generation partnering strategy at the Microsoft Worldwide Partner Conference (WPC) in Houston, I was impressed with the partnering machine that is the organization that spends billions — that’s with a B — on partnering every year. They certainly turn out a mountain of programs, initiatives and confusion.   So, during Watson’s keynote at WPC, I ended up expecting more radical ideas and innovative initiatives and yet wanting less for the sake of simplicity.   Alison Watson has four pillars to her partnering strategy evolution.  The first pillar of her vision is to continue to encourage business specialization within the partner community.  There are three facets of this business specialization — the way the customer decided, the way the partners market, and the way Microsoft goes-to-market with partners.

There was a lot of underlying hallway chatter at the event about Microsoft’s overall shift to a customer centric view and we expect the uptake of the Software+Services offering is what Microsoft means by the “way customers decide”.   The topics of the way partners market and the way Microsoft goes-to-market with its partners is focused on promoting technologies and business model specialities instead of as a generalist.   Microsoft is expecting to treat partners more uniquely in the future, developing specific benefits for partners for their specific alignment with Microsoft.

The second pillar of the partner program evolution is recognizing and rewarding differentiated performance.  The tiered performance metrics of the next generation of the Microsoft Partner Program will be based on technical and business depth, customer satisfaction and business investment.  In the future, Microsoft is expecting to shift away from simply requiring technical certifications and to also include business competency along side technical competency.  There was a lot of buzz in the bars that there will be better customer satisfaction stories toward earning program points and specialties.  The business investment is an interesting metric and basically rewards partners for selling and business investment is an interesting metric which basically rewards partners for selling and supporting the full Microsoft application stack.  We’ve seen this before from companies like HP and SAP rewarding ‘loyalty’ or cross selling.    With Microsofts’ diverse set of solutions, it will be interesting to see the specifics on this program participation requirement.   I’m also curious how this business investment expectation aligns with the focus on specialization.  Its seems you can have one or the other — either specialization on technologies and business models or the ability to sell the full suite of solutions.

The third pillar of the partner program evolution is improving partner’s ability to drive growth and profitability.   This is a new set of tools and resources to help partners attract customers, close more sales, support the customer and better utilize the partners’ investment in Microsoft.   There are a whole slew of cool tools and gadgets that are incorporated into this evolutionary pillar.   Stuff like the Pinpoint Solution Finder that has been a partner to partner tool, which is being expanded to foster partner to partner connections as well.  Watson dropped that an astounding 500 selling tools are available to partners.   Now they just need PhD to locate and diagnose which tools to use and when.  Announcements in this third pillar of growth and profitability also included new support SLA’s and digital software distribution available to partners.  More details are to follow, of course.

The fourth pillar of the partner program evolution is … wait for it…Software + Service.  Ah, there it is.  Software + Service has been mentioned in every presentation at WPC, so I knew it had to be part of the next generation Microsoft Partner Program.  Watson stressed 5 business models for partners to leverage Software + Service offerings and three tools to help them transition to the new model.  There’s nothing revolution about the five business models — they are what you’d think for software in the cloud — selling (and influencing), consulting services, web site development, application development and hosting.  However, the tools are a bit more innovative than before.  They are all designed to help the partners understand the Software + Service business model and transition to it.  The first tool Watson announced is a partner evolution guide, which is an interactive tool set that helps partners grow their business in Software + Service.  The second instrument is partner profitability benchmarks, tools to help partners compare the 12 to 15 KPIs for driving and growing a solution provider business.   And, the third tool sis a partner profitability modeler, a gismo where partners plug in all their sensitive company information.  The tool produces the ROI of developing a new practice around Software + Services, specifically.

All of these tools and initiatives are appealing if you are revolutionary solution provider that is interested and optimistic about new business models.   Most solution providers I spoke with are eager to hand on to what they have and grow in a measure and predictable way.   But, for a spreadsheet geek like me, these tools are pretty cool.

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