Microsoft Revamps Partner Program

Solution providers who want to rise to prominence in Microsoft’s partner program will need to sharpen their technology focus and prove their business and customer-service mettle under new program rules being drafted by the software maker’s channel executives.

The program changes coincide with an organizational realignment this week that split Microsoft’s U.S. Partner Business into two parts. U.S. Partner Group Vice President Robert Deshaies now oversees a new Partner Business Development & Sales unit while General Manager of U.S. Small Business Cynthia Bates has become a vice president leading the new Partner Strategy, Marketing and Programs unit. Deshaies and Bates are now jointly leading partner operations from these two “aligned, but distinct organizations,” according to a Microsoft spokesman.

“We need to increase the sophistication in how we think about and support the partner community as emerging industry trends and new business models take shape,” Deshaies says. “By creating these two centers of excellence, we will enhance the performance of our channel, as well as their satisfaction in working with us to deliver the broad portfolio of core and category solutions.”

Improving the way partners work with Microsoft is also the driver behind the restructuring of the Microsoft Partner Program, scheduled to be at least partially unveiled at next week’s Worldwide Partner Conference in Houston. The changes to the MSPP are designed to replace the company’s fragmented and often confusing channel program with “a much more holistic, value-based approach,” according to Julie Bennani, general manager of the program.

“Today we’re very volume based. We basically qualify very narrowly based on direct revenue, certification and customer references. That needs to change,” Bennani tells Channel Insider. “What we’re driving toward is a way to better organize partners and dial the benefits of our program based on the value partners drive to us.”

Bennani, who joined Microsoft a little over a year ago from the sales and marketing practice at Accenture, says many of the software vendor’s 400,000 partners have been pushing for changes to clarify how resellers can best interact with the company. “They want us focused on growth and profitability,” Bennani says. “They want to know where they should be pointing their businesses and how Microsoft will create opportunities in the marketplace.”

“We’ve traditionally been focusing on technical readiness, but we’re now seeing huge wave of momentum around business and sales and marketing readiness, so we want to broaden that concept of readiness,” says Bennani. “Business value and trust is a shift, it’s a different conversation in a different language, a different way of exploring and delivering solutions.

“Customers want to know that when Microsoft says this is a partner of ours and they are servicing CRM solutions, that they are indeed a capable CRM provider. They want to trust that,” Bennani says. “With these improvements, they can. We’re giving the partner program a much more customer-centric focus. We know we’re partner led, but we’re driving to a very customer-centric approach.”

If the MSPP was failing end users, it was coming up short for resellers as well. Microsoft’s current three-tiered partnering model has become increasingly complex, fragmented and confusing, especially since alliance partners and specialized “community” partners have increasingly sought access outside the normal program channels.

Over the next six months to a year, Microsoft will introduce new classifications to identify partners according to metrics that detail not only revenue and technical acumen, but also specialized market skills, innovative design and deployment efforts and market impact and potential. Microsoft has yet to come up with exact names for the new classifications, which are still being vetted in focus groups of partners and customers, according to Bennani.

“Microsoft is working hard to move from a fairly fragmented model to one which has consistent program levels and is much more aligned to the partners’ business model, which should be viewed as a good thing by the channel,” says Tiffani Bova, research vice president  for indirect channel programs and sales strategies at Gartner. “Partner investments and performance will become key measurement drivers and help Microsoft segment and profile partners better.”

In order to establish their place in the MSPP ecosystem, partners will now be assessed on five criteria: enablement; capability, commitment, revenue, and customer evidence. According to Bennani, the enablement criteria let Microsoft see “what impact that partner having on the customer. We assess that based on things like design and deployment wins.”

Capability, meanwhile, takes previous credit for certifications a step further by also including such things as industry accreditation. “For example, project management is a key skill to deliver ERP solutions,” Bennani says. “There’s already an industry standard PMI accreditation around that. So we’ll give partners credit for that.”

Revenue and customer evidence elements are being expanded to measure partners’ profit potential and customer satisfaction ratings based on blind surveys of end users. Both the results of the customer satisfaction surveys and the commitment portion of the program—the loyalty of a reseller to the Microsoft platform—will help differentiate top-tier partners, Bennani adds.

“This will be a change to the way Microsoft has constructed and measured the MSPP in the past, but I believe it is the right move to have Microsoft unify programs, reduce complexities for partners, improve customer and partner satisfaction while keeping an eye on customer demands and market dynamics,” says Bova. “Partners may need to make hard decisions about where they want to focus, and how they want to interact with Microsoft going forward – ultimately that will improve company focus and profitability.

“These changes take Microsoft’s Partner Program to the next level – looking at partners for their unique skills and capabilities and not just as another partner in the program,” Bova adds. “Also, moving to align the program with a partners’ business model will ultimately lead to greater collaboration both between partners and their customer, partners and Microsoft and partners with other partners.”

In crafting the changes to the program, Bennani says Microsoft surveyed and held focus groups with partners and customers. “We were encouraged by how aligned customer desires were wit what our partners were asking us to help them do,” she says, adding that the restructuring is particularly important in a time of economic uncertainty.

“I know the market is tight. That’s why this shift to solution selling, where margins tend to be higher, is a good one,” Bennani says. "We have a lot of initiatives around growth opportunities right now and we’re pretty bullish. Will it be easy? No. Depending on a partner’s business model and where they are focused, it might even require a deeper investment up front. But we think there’s plenty of opportunity.”

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