In-Depth

Partnering for Success

Teaming with other partners can help you solve more customer problems— and generate more revenue. Here's how to do it effectively.

• By Joel Shore
• July 01, 2005

When one of the world's largest retirement communities replaced its decades-old real estate management system, it did business with not one, but two Microsoft Partners. For California's Leisure World of Seal Beach, moving to Linux from its existing Unix-based system would have been the path of least resistance. Los Angeles-area Microsoft Partners Net Solutions and RSM McGladrey teamed up to make sure that didn't happen. The result: Leisure World migrated from a home-brewed accounting system written in Unibol that once ran on an IBM System 36 to newly installed servers running Windows Server 2003 and Microsoft Great Plains software.

"We do networks, but accounting software is not one of our core competencies," says Bob Whiton, Net Solutions' managing director. To win Leisure World's network infrastructure business, Net Solutions would have to provide a complete solution.

To do that, Net Solutions needed to work with a provider of business-solutions software. But who? Barbara Lacy, Microsoft's partner ccount manager (PAM) for Southern California, brought McGladrey into the picture. Both were members of a "circle of trust," an informal group of Microsoft partners with complementary areas of expertise facilitated by Lacy.

Jeff Woods (left) of RSM McGladrey and Bob Whiton (center) of Net Solutions teamed up to get a complex job done well for Jim Gilbert of Leisure World.

Joining forces to win customer contracts is nothing new, but it's happening with increasing frequency. More than half of all technology customer engagements now involve two or more systems integrators, according to analyst Paul DeGroot from industry think tank Directions on Microsoft. And the number, he says, is poised to rise.

"Microsoft is envious of the communities that have formed around open source, and putting its own partners together is one way of responding."

Making Connections
As a result, Microsoft now finds itself in the business of playing matchmaker, staging events where Certified and Gold Certified Partners with non-competing competencies can meet face-to-face. Often held at regional Microsoft offices, these "open door days," as Lacy calls them, provide partners with a private forum where they can pitch their areas of expertise and fill their needs. "Once the contact is made, Microsoft tries to get out of the way," Lacy says.

"Think of it as speed dating for systems integrators," DeGroot says.

Another venue for developing relationships is through the the independently run International Association of Microsoft Certified Partners (IAMCP). With chapters around the globe, the IAMCP helps Microsoft Partners find opportunities with members locally and worldwide, according to Tom Upton, Microsoft's PAM in Dallas, Texas.

No matter how you find a partner, Bob Crissman, general manager of Microsoft's partner enablement programs, stresses due diligence. "If their business model is drastically different from yours, if they invest less in sales and marketing, or if their customers are much larger or smaller than yours, then this isn't the right partner for you," he says. Even after finding a credible match, Crissman suggests continuing your research by working with the local Microsoft office. "We're out there with these partners frequently."

Adds Lacy, "These partners must be able to deliver the message, close the business and deploy the product successfully." Not all make the cut.

Once relationships are established, it's best not to stray, says Jonathan Leaf, manager of large account reseller (LAR) Softchoice's Dallas location. "We've found it's best to limit who we work with. We're loyal to them, and that means they'll be loyal to us." Leaf belongs to a greater-Dallas partner circle that includes New Horizons Computer Learning Center of Dallas, a provider of IT training for technicians and end users.

Whether it's dubbed a "solution circle" as in Dallas or "circle of trust" as in Los Angeles, understanding the role of each partner in such groups is essential. Overlapping responsibilities or core competencies may cause friction among partners in the circle, but tasks that fall through the cracks are sure to sour the customer.

Latest Channel Tool Extends Partners' Reach Not even 6 months old, Microsoft's new Web-based Partner Channel Builder tool is fast becoming the method of choice for Gold and Certified Partners looking to form alliances and deliver solutions beyond their core competencies and home territories. Conceived as an online adjunct to Microsoft's larger Partner Channel Builder initiative, partners can describe the solutions they offer along with the markets and customer types they serve. And in a collaborative twist, partners lacking a specific competency to meet a project requirement can post their needs, allowing others to respond and potentially join forces in delivering an end-to-end solution. Launched in 2003, the Partner Channel Builder initiative is a networking and resource-sharing community for members of Microsoft's Partner Program. In addition to the online tools, the initiative includes structured networking events in select cities. The philosophy is to help partners engage in projects previously beyond their reach, share leads generated by other partners, and enter new markets and geographies. Following one of these face-to-face local channel builder events, Dwight Dowell, a marketing executive with Aspect Business Solutions in San Antonio, Texas, forged a relationship with an ISV that had demonstrated its human-resources portal, the very piece Aspect needed to complete a payroll solution. But not all partners attend these events. To extend Aspect's reach, Dowell, in a parallel effort, is using the newly released online tool to post profiles of Aspect's solutions. The endeavor is already yielding results: Dowell says he's had several partners contact him in order to expand their own vertical offerings. According to Kevin Wueste, general manager of Microsoft's Partner Program, the online tool clearly is expanding partners' horizons. "With over 240,000 partners in the Microsoft Partner Program, the ability for partners to find the complementary skills their customers need is tremendous." Microsoft's online Partner Channel Builder tool is located at www.microsoft.com/partner/channelbuilder. — Joel Shore

A Matter of Protection
With multiple partners serving the same customer, delineating each other's responsibilities and limits would seem to make sense. After all, if the cabling isn't finished, or the servers aren't configured properly, the accounting software can't be installed and users aren't able to be trained. Protection usually means a formal contract.

But surprisingly, that's not the case. None of the partners interviewed for this story has established a formal, contractual relationship with any other partner. And according to Microsoft's Lacy, that's true of other trust circles.

It's not necessary, says Sem Aykanian, a Marlborough, Mass., attorney. Although risks can never be eliminated completely, "all you'd be doing is creating more paperwork, more expense and another layer of bureaucracy," he says.

"We have no formal contractual arrangement with the other partners in our circle of trust," says Jeff Woods, managing director and practice leader at McGladrey's Riverside, Calif., location. "Anyone we work with already has been under continual scrutiny from Microsoft. We just need to be sure the personalities fit."

That said, McGladrey did execute a contract with a subcontractor to provide CRM expertise for the Leisure World project. But Woods noted that McGladrey was acting as a customer, not a partner, and that the subcontractor was not a member of the circle of trust.

Though Microsoft's Crissman suggests that companies establish safeguards to ensure neither party "steals" business from the other, most partners don't see it as necessary.

Making the Scene Interested in getting in on a Microsoft open-door partnering event? In Southern California, partners receive e-mail invitations from Partner Account Managers. Microsoft's Area General Manager, Donna Armstrong, also distributes a quarterly newsletter listing upcoming events. And a partner-only Web site carries similar information. Other regions hold similar events under varying names. Check with your account manager to find out what's available in your region.

"The whole point is to have a group of partners with non-overlapping areas of competency," says Bill Markman, director of sales at New Horizons Computer Learning Center of Dallas. "All we do is training. We're not about to hire away someone who sells servers or installs networks."

And it is called a circle of trust. Handshake arrangements are common. With each partner in a circle of trust expected to bring in leads that benefit the others, the field is self-leveling, says Microsoft's Lacy.

Though unaware of an entire solution circle fading into oblivion, self-governance ensures that members pull their own weight, says Microsoft's Upton. "Partners have been kicked out. Not often, but it does happen." Though it's rare, a partner leaves a circle usually due to a personality mismatch or an inability to bring in adequate business for the other partners.

United Front
With multiple partners participating in a customer engagement, in the end, it's the view from the customer's angle that is perhaps the most crucial. Should the customer be aware that several partners are working as a team? Or should the partners come across as a single continuum? Then there's the matter of billing: single billing by the group to cover the project or separate invoices for each partner's portion?

To Leisure World Controller Jim Gilbert, it's a non-issue. "The project was bid to us as individual contracts by each company. There was a clear delineation of which company was handling each aspect."

The answer for Softchoice's Leaf lies somewhere in the middle. Even though the customer sees business cards with different company names and logos, "they need to see all of us as a single entity, working together in a coordinated, professional way to implement one solution."

Although they considered presenting an aggregate invoice to Leisure World, Net Solutions and McGladrey opted to follow the more common practice of invoicing the customer separately. Doing so provides several advantages.

For one, the partners avoid the expense and labor of creating a combined bill. And there's no need for one partner to be saddled with the task of disbursing funds to the others. As for the customer paying each partner separately, generating an additional check or two in a monthly check run is typically less than a blip.

Back-room administrative policy aside, everyone agrees that a partner circle will succeed only if you present a coordinated front to the customer.

McGladrey's Woods says that in his trust circle, the partners work diligently to provide a "transparent, single-source solution," even though the customer has separate contracts with each participating partner. The planning and scheduling to make that happen takes place far away from the customer's site.

That was the case for Leisure World, according to its systems operations supervisor, Barry Holland. "It was a seamless transition," he says. "When the hardware and networking aspect of the project was complete, Net Solutions phased out and McGladrey phased in. If there were any conflicts it certainly wasn't apparent to us."

Crissman's Commandments Before calling on a customer with another partner in tow, get the preliminaries out of the way. Bob Crissman, Microsoft's general manager of U.S. Partner Enablement, suggests following these steps for starting and maintaining a circle of trust. Attend Microsoft-sponsored partner events to meet others with non-competing areas of competency. Use your local Microsoft Partner Account Manager to learn about potential partners, establish trust circles and provide qualified leads. Set up an equitable financial arrangement, if necessary, to ensure that marketing expenses and revenue are properly divided. Create reciprocal lead-sharing rules to ensure that partners won't steal business from each other. Spell out terms of each customer engagement so that partners know the exact scope of the work and which is responsible for each piece. Make the arrangement seamless for the client so that a team, rather than individual partners, manages all aspects of the account. Settle disagreements among partners in private, never in front of the customer or on the customer's premises.

One More Time
For New Horizons, Net Solutions, RSM McGladrey and Softchoice, the establishment of trust circles was beneficial. They all won new business and established new customers as a result of leads passed from other partners. And by sharing its Leisure World lead with McGladrey, Net Solutions retained an account that required expertise it wasn't equipped to deliver on its own.

If there's a downside, it's minor, partners say. McGladrey's Woods is happy to bring leads to the table, but he expects others to do the same. Though a business will never suffer from having too many referrals, he warns about relying solely on the circle. "It can turn into a real problem if you grow dependent on the circle and partner leads dry up." His advice: Don't cut back on marketing.

Happy with these successes and others, Microsoft's Crissman, along with Lacy and Upton and their counterparts in other territories, plan to launch additional trust circles. Indeed, Crissman already is eyeing opportunities in Denver, San Francisco and Washington. And with roughly 12,000 Gold and Certified Partners in the United States, there's no shortage of partners.