Microsoft Changing Channels?

For the 400,000 resellers whose businesses depend on Microsoft’s partner programs, the past year has been spent watching Bill Gates wean himself from the company he built and wondering what the future holds for the world’s biggest technology partner ecosystem.

Microsoft’s 400,000 worldwide partners drive about 95 percent of Microsoft's revenue, according to Michael Speyer, a senior analyst at Forrester Research. 

"It's really in the DNA of the company, and it's in their best interest to keep the VAR channel stable and keep their resellers supported," said Speyer.

With such an incredible amount of personnel and infrastructure devoted to maintaining those 400,000 partners, he added, there's no question the management team will avoid rocking the channel boat.  "Microsoft has always been and will continue to be very active with their channel, whether or not Gates is there," said Speyer.

Rick Bahl, owner of Microsoft partner Quality Systems Solutions, said Gates always realized how important the channel was for his company but remained hands-off—preferring to focus on Microsoft's products rather than on the go-to-market strategy.

"He's always viewed himself as the software architect and the chief evangelist,” said Bahl. “Certainly he recognized the value of the channel, but I don't think it was a significant area of focus for him.”

“Microsoft’s vision has been channel-centric from the beginning,” said Robert Deshaies, vice president of the US Partner Group. “We recognized early on that we needed the partner channel in order to provide the deep value customers need to realize their full business potential. As we move toward the future, we’re committed to evolving the Microsoft Partner Program to deepen our engagement with partners, continue to help them grow their business profitably, and renew our strong commitment to customer satisfaction.” 

Industry experts say Microsoft's channel really hit its stride with the releases of Windows 95 and 98. As demand for the operating systems increased and Microsoft blew its competitors out of the water, the company needed to be able to scale much more quickly than it could simply by selling directly to consumers and businesses.