Microsoft Details Massive Reorganization Plan
In what amounts to one of the most ambitious efforts ever to align channel partner sales efforts with a vendor's sales organization, Microsoft revealed how it plans to go to market in collaboration with partners in the wake of a massive corporate reorganization.
At the Microsoft Inspire 2017 conference, the company took the wraps off a new One Commercial Partner initiative, through which it plans to create a compensation-neutral sales model that rewards the internal Microsoft sales staff for driving business to channel partners.
At the same time, the Microsoft sales and technical support staffs are being reorganized around six vertical industry segments: education, financial services, government, healthcare, manufacturing and retail. In addition, the Microsoft product teams have been reorganized around four classes of IT solutions: Modern Workplace, Business Applications, Applications and Infrastructure, and Data and AI.
The end goal is to break down the barriers between co-selling for Microsoft and its partners, said Ron Huddleston, Microsoft's corporate vice president for One Commercial Partner. "This is about bringing the right partner to the right customer at the right time," he said. "This is going to feel very different."
Connecting Partners to Customers
Huddleston said Microsoft is committing more than $250 million to connect partners to customers, including a massive increase in the size of the Microsoft inside sales force. As part of the effort, the vendor is setting up partner account managers (PAMs) who will be responsible for working with enterprise-class partners to target specific vertical industry opportunities.
Microsoft is also attempting to recruit new types of partners, such as Cubic Transportation Systems. The expectation is that PAMs will make bringing new partners into the ecosystem a smoother experience for everyone.
"Becoming a new Microsoft partner is like drinking from a fire hose," said Andy Taylor, director of strategy for Cubic Transportation Systems, a solution provider focused on metropolitan transportation systems. "It's a little overwhelming."
The success or failure of this reorganization will largely depend on the capabilities and expertise of those PAMs, said Steve White, an industry analyst with International Data Corp. (IDC). Every IT vendor has been trying to better align its channel sales partner effort for years, he noted. The fine line many of them are trying to walk is driving additional sales without turning the channel into a fulfillment engine for sales made by the vendors' sales staffs.
"Microsoft is not the first company to go down this path," White pointed out. "The challenge is getting the alignment right."
Vendors such as Microsoft have multiple partners operating in the same regions and vertical industries. By employing a more high-touch sales model in collaboration with partners, each PAM needs to be careful not to alienate one partner over another too often, White said.
However, Microsoft may have no choice but to pursue this option because sales organizational structures are one of the biggest barriers to cloud services adoption, said Daniel Saks, president and co-CEO of AppDirect, a distributor of cloud applications and services. "The cloud requires a much more consultative approach to selling," he said. "You need to have a lot more knowledge about vertical industries."
One way or another, Microsoft is making it clear to the entire partner community that it intends to gain that knowledge and expertise.