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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

“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

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.”