Ellison: When will you be rolling out the new partner programs?
Flynn: We’ve looked at how we have been doing our partner programs and we wanted to focus on making changes. So we started this project about a year ago. it’s coming to fruition in the January time frame.
We decided to roll it out in phases to our partners. The first group we’re rolling it out to is our existing Gold Certified and Certified partners. That’s going to happen in the December.
In April we’re opening it up to Registered members. Microsoft has about 675,000 partners on a world-wide basis. About 35,000 of them are Gold Certified or Certified members. So the majority of our partners are not engaged in our Gold Certified or Certified program today. We have had traditionally a Web site for them and a set of benefits for them but it’s always been done in a rote manner. One of the things we’re doing is creating a home for these partners as Registered members. This will create much more of a community for them and give them much more recognition that they’re formally a Microsoft partner. They will receive more structured benefits instead of receiving things on sort of an ad hoc basis. That is one of the big changes with the new program.
In July we’re opening it up to our Microsoft Business Solutions partners. These are, traditionally, the old Great Plains partners that have been operating as a separate entity under Microsoft Business Solutions. Their program has been unique to that partner set. One of the things we’re doing is combining the MBS program and the traditional Microsoft program as one program. That will be happening in the July time frame. We’re doing this because our MBS partners are on a calendar year that runs from July until June so their program doesn’t expire until June.
Ellison: What are some of the other key changes partners can expect?
Flynn: We’re focused on three key areas of change.
The first has to do with focus. We introduced an area we call the Microsoft Solutions Competencies. These are areas of business that have high customer demand, that have a lot of partners focused on them in terms of delivering solutions in the marketplace, and that Microsoft has strategic interest. It is designed to help us understand what solutions the partners are delivering to customers and provide them very tailored support.
The second big element has to do with understanding the partners’ market impact and giving them recognition for everything they’re doing with their customers. We’ve introduced a concept we’re calling “partner points” where we look at traditional things such as what product certifications they have on board and the revenue they’re generating. But we also take into account things like the level of satisfaction they have with their customers, the full range of services they’re giving to their customers, whether they’re training their customers, how they’re supporting them, and how are they influencing their customers. We’re taking all of those things into account to help people move up and down in the program.
The third element uses technology to deliver one-to-one type benefits to help our partners tailor what they receive from us and have it custom-fit their business needs. For instance, today Microsoft participates in about 18 areas where we have go-to-market activities, ranging anywhere from the desktop to commerce servers to business intelligence applications. We know fully well that very few partners are participating in all 18 of those areas. There’s a different set of needs that an ISV might have, than a reseller might have, than a system builder might have. Additionally, they’ll get this matrix of benefits depending on they’re needs and what they’re specifically doing in the marketplace.
Through the structure of the program, we’re able to tailor what we’re delivering to those partners so they get relevant benefits that are very specific to them and have a lot of market impact for them. An easy example would be someone who’s a system builder. We would give them pre-installation support on how to load the operating system onto a PC or how to load Office onto a PC in a networking environment, whereas that’s not something that typically a service partner might need. A service partner might need more consultation on how to run a support business and so we would deliver that benefit to the support partner. It’s about tailoring what we can do for each of the partners based on what they do in the marketplace.
Ellison: Specifically, what are you doing for your various levels of partnerships—your Gold Certified Partners, for instance, and your Certified Partners?
Flynn: Our Gold Certified Partners are our very best partners. They’ve shown very strong dedication to Microsoft, have committed a lot of internal resources to supporting the Microsoft product line and have shown a great deal of success around Microsoft in the marketplace. We want to invest in them so that they are uniquely identified in the marketplace as being a best-in-class Microsoft partner.
Our Certified Partners are our better Microsoft partners. These are people who have focused on Microsoft and shown they have strong impact in the marketplace. They’ve shown they’re very knowledgeable about our products. So we deliver to them a core set of benefits that helps them differentiate themselves from the mass of partners who are out there. The third, the registered members, are our good partners who are engaged with Microsoft and are focused on our solutions. We want to provide those partners with everything they need to have a level of success in the marketplace. It’s all about giving people who have shown a deeper level of support, commitment, and success around Microsoft products a deeper investment from Microsoft.
A good example (of the difference) would be to look at not-for-resale software. To our Gold Certified Partners, we give 100 licenses for each of our software products; at the Certified levels, depending on the product we give them 10 to 20 licenses and it’s available for cost to the registered member.
Ellison: What objectives did you have in mind when you decided to change the program?
Flynn: Our objectives were pretty straight-forward. About 95 percent of Microsoft’s revenue flows through our partners. We wanted to make sure we had a partner-centric approach. Issues like partner flexibility, being able to measure the partner’s overall impact, making sure they were recognized for what they did in the marketplace—all of those things became central tenets for what we were trying to do.
We want to make sure that what we do as a vendor provides the best possible support for our partners. When we look at how the industry has changed over the last 10 years, how Microsoft has changed, how our partners have changed, how our customers have changed, we felt that it was time for us to take some leadership in the marketplace and make some fundamental changes in the way that the programs are put together. We want to make sure that we reward partner agility, that we give them the ability to be more reactive to their customer needs, that we recognize everything they’re doing in terms of making successes with their customers, that we’re able to support them as they segment their business and focus on delivering core solutions to their customers, and that we tailor the value we give them so that they’re seeing distinct value from us as a vendor supporting them.
The key at Microsoft is that we’re dedicated to our partners. We absolutely see them as the key to our success. One of the things that differentiates us is that our sales force is goaled and quoted on working with partners rather than competing directly against them. We want to provide our partners with the key sets of materials and the key partnerships that help them be more successful with our customers.
Ellison: Did you solicit partner input in devising the new program?
We interviewed probably close to 2000 partners over the course of the last year. We’ve done a series of focus groups. We’ve done all sorts of activities around the world—in Beijing and Taiwan, all over the United States, Canada, and South America. We’ve gone to every continent but Antarctica to get the feedback of the partners. So as we developed the program, we would test ideas with partners. We would find out what they thought worked and didn’t work, what they liked and didn’t like, what they felt were best practices within the industry, what they felt were the worst practices within the industry and shape the program from that point of view. We also wanted to validate and fine tune what we were doing to insure that we were able to help partners respond to a rapidly changing marketplace and not pigeon-hole them in tight segments like we see many partner programs doing today.
Ellison: Did any overwhelming request emerge from all that feedback?
Flynn: The message was ‘keep it simple.’ Most partners have seven to 10 vendors that they’re focused on. Vendors would always love to absorb more of their time and be able to have them have dedicated account management in the partner space. That’s not really very realistic. The partners want to have an easy way of dealing with us. They want to have one point of contact. They want to be able to easily navigate to find everything they need and they want it in a simple straight-forward manner.
Ellison: What tools do you make available to help link the customer with your resellers?
Flynn: We have a couple of different tools. The first is the Core Competency Framework. One of the things we’re looking to do is to promote to customers and partners what to look for in a partner. One of the things they should be looking for is someone who has a competency that is based on the solutions they’re looking to buy. Through the way we’re evolving the partner brand and the partner focus, it’s going to be much easier for customers to quickly and effectively identify what partners do in the marketplace and help them tune in on the partner that most specifically meets their needs.
Secondly, we have a series of leads programs. We have what we call a Resource Directory that helps customers find partners based on their competencies in the marketplace.
The third thing we’re doing revolves around what we call our Go-to-Market strategies where we work with partners who are specifically focused on delivering certain solutions. We help them leverage Microsoft marketing, working with the local accounts, helping them be more successful in selling specific solutions to targeted customers.
Ellison: What are some of the trends and opportunities partners should be watching in 2004?
Flynn: Customers are getting much more sophisticated in their buying behavior. They no longer see IT as a panacea. They want to make sure they’re getting the full bang for their dollar. But they’re also looking at their full stack of business needs. And they’re looking for partners who can deliver that full stack.
That puts a new way of thinking on partners. Their ability to partner with other partners, their ability to demonstrate the scope of what they can do in the marketplace will become higher needs than they are today. We’re trying to build our program to fundamentally help partners address both of those areas. We want them to be easily identified by customers in terms of the solutions sets they’re selling. And also to provide a framework that lets them partner with other partners to deliver more of that full stack to their customers.