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The Changing Channel

In Nadella's Microsoft, Uncertainty About Where Partners Fit

The new CEO's mantra of "mobile- and cloud-first" has some uncomfortable implications for partners -- one of them being the possibility of competition from Microsoft itself.

For more than three decades, "partners" is the word that has been used to describe the relationship between Microsoft and those who sell Microsoft products and services. According to past Microsoft leaders, partners have been the foundation upon which Microsoft was built.

Feb. 4, 2014, is a historic date. It's when Satya Nadella was announced the third CEO at Microsoft and, for the first time, Bill Gates is no longer chairman of Microsoft. Also, Steve Ballmer is no longer CEO. Videos poured out of Microsoft all day from Nadella, Gates, Ballmer, new Chairman John Thompson and others.

If you watch these videos, you'll find that Susan Hauser, who was one of the Microsoft reps I worked with back in the 1990s, uses the word "partner" four times as she's interviewing Nadella and introducing him as CEO of Microsoft. That makes her the record holder. Nadella himself uses the word once at the beginning of the interview and once at the end. Gates, Ballmer and Thompson don't utter the word at all.

Our Industry Doesn't Respect Tradition
In all the videos and in his personal e-mail to all Microsoft employees, Nadella speaks of himself as "a lifelong learner" who "buys more books than I can finish." He talks about our mobile-first, cloud-first world. But he says one thing that gets me up on the roof and drawing my bow across my fiddle with fervor: "Our industry doesn't respect tradition. It only respects innovation."

Not only does this quote appear in his e-mail, in Susan Hauser's comments during the interview and in his video interview walking the halls of Microsoft, it may also bespeak the thinking of someone who, despite 22 years at Microsoft, didn't talk much about partners on his first day as CEO. Nadella also comments to Hauser that "the past is now all in the rear view."

Decision Time
It's time right now for all Microsoft partners to take a good, hard look at their businesses and, as noted business author Jim Collins likes to say, face the brutal truth. A Microsoft that will continue to embrace a "devices and services" strategy isn't only talking about "cloud" services such as Office 365 and Windows Azure. It's talking about consultative services, and product-attached services, development services and maintenance services. It's talking about all the services on which you've built your businesses.

Be prepared for competition from Microsoft.

Those of you who provide infrastructure services will find yourselves up against Windows Azure and an infrastructure that customers don't need to think about. If you've been an application implementer, be prepared to compete with Office 365. If you've elevated your practice to consult on business intelligence, watch over your shoulder for Microsoft Consulting Services.

Where To Go from Here
As I've discussed many times before in this column, it's important to approach Microsoft with a balanced view. It is a business that's in business to make money. Nadella states in his e-mail, "As we look forward, we must zero in on what Microsoft can uniquely contribute to the world. The opportunity ahead will require us to reimagine a lot of what we have done in the past for a mobile- and cloud-first world, and do new things."

Will those "new things" include partners? Does not respecting tradition include the tradition of partnering that has made Microsoft great? Is that in the "rear view" now? It remains to be seen.

But each of you also has a business that's in business to make money, and you must work to protect that business. In fact, we must all work together as one Microsoft partner community with one voice to ask the important questions and get the meaningful answers. So here's what I would ask each of you to do:

When and if Nadella gets around to speaking to you as a partner, ask him to speak from his heart about what his real plans are to engage and continue the no-longer-respected tradition of Microsoft working with partners.

Let me know what you find out.

More Columns by Howard M. Cohen:

About the Author

Howard M. Cohen is a consultant to IT vendors and channel partner companies and a board member of the U.S. chapter of the IAMCP. Reach him at hmc@hmcwritenow.com.

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