In-Depth

A Change for the Better

With few exceptions, members give thumbs up to the retooled Microsoft Partner Program, welcoming a new era of specialization and cooperation.

• By Kevin Ferguson
• July 01, 2005

For years, Microsoft resellers, system integrators and ISVs made a sport of biting the hand that fed them. Microsoft, depending on their mood, was too powerful, too lumbering or too greedy. Moreover, its software was too buggy and didn't address their specific needs.

Now, these same solution providers have gone from biting Microsoft's hand to kissing it.

With few exceptions, solution providers give the Microsoft Partner Program high marks since it was retooled to encourage specialization and cooperation among members. Those marks may get even higher this fall if Microsoft, as expected, streamlines the program registration process and institutes a major marketing push. Those changes are among the announcements expected at the Microsoft Worldwide Partner Conference in Minneapolis this month, says Kevin Wueste, general manager of the Microsoft Partner Program.

Microsoft's Partner Program has seen signficant change, especially in the last 18 months. The original Microsoft Certified Solutions Partner program, launched in 1993, had only one tier. In January 2001, when its name was changed to the Microsoft Certified Partner Program, partners were divided into two tiers: Certified and Gold Certified. In 2002, Microsoft increased the requirements and benefits for both levels.

The program was overhauled in October 2003, with changes and updates rolled out gradually throughout 2004 and into this year. The overhaul featured two major changes: the addition of a free, Registered Member level and a new competency program that encourages Certified and Gold Certified Partners to specialize in any of 11 different Microsoft technology areas.

Creation of the Registered Member level was huge. In just the past 18 months, the program's partner base ballooned from about 40,000 to 275,000, including an estimated 3,300 Gold Certified Partners, 31,500 Certified Partners and 240,000 Registered Members. "Microsoft knew there were a lot of small companies that weren't willing to pay fees and be part of the [Partner] Program," says Paul DeGroot, an analyst with Kirkland, Wash.-based research firm Directions on Microsoft. "They were largely invisible to Microsoft, although they were helping Microsoft increase its sales."

Now, not only are Registered Members on Microsoft's radar screen, they're listed on the Microsoft Resource Directory, an online partner directory available to potential customers and business partners. To boot, Registered Members have access to a slew of discount goods and services. Most notably, they can opt to receive "Action Packs," which are collections of multi-user licenses for business applications and utilities, such as Microsoft Office 2003 with Business Contact Manager and Microsoft Business Solutions CRM Professional. The software, which is distributed quarterly, would collectively retail for about $20,000. Registered Members can buy the lot for $299, provided they agree not to resell it.

"We liked Microsoft's approach [to the Partner Program] quite a bit, so w dove in head-first." Barry Martin, Senior Systems Engineer and Partner, The Mirazon Group

Point, Counterpoint
The program is not free of criticism from member companies, however, beginning with a perceived lack of marketing. "Microsoft needs to build a strong image for the partnership program and brand these competencies," says George LaVenture, president of Trinity Consulting in Marlborough, Mass. "I had a client that was surprised to find Microsoft [partner] levels had to do with skill and not sales levels. I'm hoping they'll move aggressively into branding this year."

Partners also say Microsoft is swamping them with information that is often not targeted to them. "I must get a box or a packet or e-mail from Microsoft every week," says Jeff Mills, vice president of marketing and channel development of Bluespring Software, a Cincinnati-based developer of business-process management solutions. "It's all over the board." Still, Mills appreciates the intent. "It's good stuff. Microsoft is making a new effort to connect partners with customers."

Some solution providers, particularly those with few employees, feel the requirement that competency candidates submit customer case studies for Microsoft approval is too onerous. This criticism remains in some corners, despite Microsoft's agreement last year to allow existing Certified and Gold Certified Partners to complete their annual re-enrollment without having to meet the new customer reference or Partner Points requirements.

Those customer success stories, which are verified by Microsoft, also have some partners worried that confidential information may be shared with a third party. "I've had partners voice fears that client information wouldn't be kept confidential," says Trinity Consulting's LaVenture. He was quick to add, however, that he knew of no such breaches in confidentiality and described Microsoft's program changes as "a real strong, solid, exciting decision that is going to benefit all Microsoft partners and our joint customers." Similarly, DeGroot says there is "simply no evidence that [disclosure of client data] will happen."

Microsoft's Wueste dismisses concerns for mismanaged confidential information. He cites, among other things, rigid confidentiality rules at Microsoft and in the state of Washington that discourage such breaches.

Indeed, he says none of the criticisms represent significant challenges to the Competency program, before replying point by point. First, he notes, Microsoft will roll out an end-user marketing campaign that extolls the benefits of working with partners. He would not disclose a launch date for the campaign, saying only that it will be in Microsoft's 2006 fiscal year, which begins this July 2005.

Regarding the application process, Wueste acknowledges it may take applicants a few hours to gather the necessary data and forms, but notes they only have to do it once per year. "The paperwork may seem like a lot, but really, they've only moved from none to some," he says.

And while he says Microsoft will work to more finely hone the distribution of marketing collateral, he notes the company needs the cooperation of partners; the more details partners share, the better Microsoft can target the material it sends them, he says.

"Microsoft needs to build a strong image for the partnership program and brand these competencies." George LaVenture, President, Trinity Consulting

Playing to Your Strengths
Despite the handful of gripes, overall marks for the Partner Program are high. Solution providers say Microsoft's continued efforts to map the marketplace have improved their businesses. Potential customers and business partners—as well as Microsoft—better understand partners' particular strengths, they say. Given there are more than 775,000 Microsoft Partners worldwide (including those that are not members of the Partner Program), and that more than half of all partner engagements involve more than one partner, the clarity is welcome.

"Before we had this focus on competencies, everyone was a competitor," says Jim Stout, CEO of Invoke Systems, a Baltimore-based technology consultancy. "Since we've made this shift, we have almost no competitors within our geography."

Invoke provides an example of the Partner Program working exactly as Microsoft envisioned. Using directory tools provided through the program, Stout found Light Industries, a Millersville, Md.-based CRM software developer and reseller. The two businesses are now selling joint solutions, with Invoke handling the technical side of Microsoft CRM deployment while Light Industries develops the business processes, Stout says.

In addition to encouraging such cooperation among partners, the new program requirements also encourage partners, particularly Registered and Certfied Partners, to broaden their skill sets. MR Consulting, a one-man shop operated by Mauricio Ramos in Austin, Texas, for example, became a Registered Member in September 2004 and is working to become a Certified Partner.

"I am looking forward to being part of the [Microsoft Resource] Directory and to having more knowledge about the Microsoft products," Ramos says. Before it can receive Certified Partner status, however, MR Consulting, like other partners, must employ, or contract with, at least two individuals who are Microsoft Certified Professionals.

The Mirazon Group, meanwhile, had been a Certified Partner for four years before program changes prompted it to go for the Gold. "We liked Microsoft's approach quite a bit," says Barry Martin, a senior systems engineer and one of four partners at the Louisville, Ky.-based company. "So, we dove in head first." The Mirazon Group so far has achieved Microsoft Competency in Advanced Infrastructure Solutions and Networking Infrastructure Solutions, and is pursuing others.

Racking Up Points
Some of those competencies, at least, will earn The Mirazon Group points under the revamped system Microsoft uses to define Certified and Gold Certified Partner memberships. Microsoft awards 50 points for the first competency you attain and 25 points for the second—but that's it. "You don't get additional points for third or fourth core competencies," Martin notes. "But there are so many ways to get points, such as by selling licenses."

Indeed, while companies must still collect 50 points to attain Certified Partner status and 120 for Gold Certified, there are far more ways to do so. For example, as of January, Microsoft now awards one Partner Point for each Microsoft Certified Professional a solution provider has on staff. Completing a Master Certified Professional Program or attaining Microsoft Business Solutions Certification is good for two points each, while completing ISV Software Testing to ensure Windows compatibility can earn an ISV 10 to 50 points (although the tests cost $400 to $30,000). Selling software and generating licensing revenue can earn you up to 60 points. Partners can also earn up to 20 points by collecting customer references beyond the three required to qualify for most of the competencies. The idea, says Microsoft, is to reflect the diversity of strength among its partners.

(Click image to view larger version.)

Rolling Out the Bennies
As for benefits, Microsoft continues to sweeten the pot for appreciative partner members. Among several new benefits for partners is a Microsoft Web-based resource, called Partner Channel Builder. The site, launched in February, is a networking and resource-sharing site where Gold Certified and Certified Partners can enter solutions and opportunities and Registered Members can search for opportunities to connect with other partners across verticals, locations and competencies (see "Partnering for Success").

"I [recently] called a potential partner and asked him to get involved to sell the BackOffice on [Microsoft Business Solutions], because that's not what we do," says David Dorer, director of business development at Silver Bullet Technologies, a Miami-based solution provider that has used the site. "So, we're bringing them into a meeting. They're getting before they give."

Another benefit added since last year is a revised Microsoft Resource Directory, an online directory where customers worldwide can search for services and solutions. Also new is Partner Logo Builder, an online tool that partners can use to build custom logos that note whether they are a Certified or Gold Certified Partner and what competencies they have achieved.

Partners also now have access to a quarterly Customer Satisfaction Index, based on a 10-minute, confidential survey of partners' customers conducted by a third-party research firm. "We went to a lot of customers and ended up doing very well," says The Mirazon Group's Martin. "It gave us significant feedback."

"These are all services that IBM Global and Accenture have been using for years," says LaVenture. "Now, [Microsoft] Partners get them for free."

Certified and Gold Certified Partners also get access to either a telephone Partner Account Manager (tele-PAM) or a field PAM to discuss non-technical issues, such as accrual of Partner Points and program benefits. Regional Microsoft offices decide what level of access partners receive.

Tech support, both free and fee-based assistance, has also been strengthened at all levels. Registered Members have access to free "business-critical" phone support in the event of a major problem, such as when a client's local-area network crashes. Certified and Gold Certified members also get improved pre- and post-sales telephone-based technical support. In addition, Certified Partners get access to Microsoft Online Concierge, a Web-based chat service available around the clock to answer questions regarding Microsoft technical resources. Gold Certified Partners also get direct access to a technical contact, called a Technical Service Coordinator, who manages incident escalation and provides guidance on hotfixes, patches and readiness resources. This individualized service will be phased in, by region, to all Gold Certified Partners, says Microsoft.

The biggest change to fee-based tech services, however, is the creation of the Microsoft Services Partner Advantage in July 2004, subsuming the Premier and Premier Enterprise service plans. The latter two plans, which offered up to 200 hours of service, were beyond the price range of many solution providers: $35,000 a year for the Premier service and $60,000 a year for Premier Enterprise. The new plan also offers two pricing tiers, but at more reasonable rates. The Standard Plan, which consists of a pre-packaged set of online resources, problem-resolution incidents and proactive educational services, starts at $8,936 for 40 hours and five incidents, while the Plus Plan, which also provides a direct, ongoing relationship with a designated services resource, starts at $30,060 for 140 hours and five incidents. In addition, Plus Plan customers get the added ability to allocate hours for engagement in proactive consulting services.

"Overall, I see a lot more resources being mustered for partners," says Silver Bullet Technologies' Dorer. "There's an abundance of resources. We just have to sort through it."