In-Depth

Delivering on the Promise

Zoran Nikolic and GM Solutions, with a 200 percent increase in business, is but one Information Worker partner success story. Microsoft is looking for lots more.

• By Alison Diana
• November 01, 2005

"He had never heard of us, but he found our company in the Microsoft Resource Directory," says Zoran Nikolic, managing director of GM Solutions Inc., a Vancouver, British Columbia-based software development and consulting firm that offers Microsoft-based solutions to small and midsize businesses in the area. The caller found GM Solutions solely because the company has the Information Worker Solutions competency. "The files [the customer was trying to distribute] were related to information he wanted to share with his clients, so he selected ‘Information Worker' from the drop-down list," Nikolic says.

That frantic call for help resulted in new business for GM Solutions—and reflects the solution provider's 200 percent increase in revenue since attaining the Information Worker competency in August 2004, Nikolic says. He declined to name the client but said it has about 70 employees and now relies extensively on GM Solutions as its technology advisor.

"During the last two months, we successfully accomplished a network infrastructure upgrade project," he says. "We are talking to them about a list of new projects, some related to the IW competency, some not."

Bank on It
Although it didn't happen quite like Microsoft envisioned, the GM Solutions experience is an example of the opportunity that Microsoft sees for partners in its Information Worker competency. The company has outlined an ambitious plan, according to Richard Flynn, director of resellers at the software giant.

"The goal is to grow the Information Worker Solutions competency to 5,000 partners in the Office 12 timeframe in order to meet our anticipated capacity needs worldwide," he says. That's up from the 1,850 partners that have the competency thus far, and is an increase the company expects will generate billions of dollars in channel opportunity.

Microsoft should be able to meet its target, says Erica Rugullies, principal analyst at Forrester Research Inc. Office 12 will not ship for at least a year, she says, and given its array of new capabilities and enhanced interface, the suite will require the channel to play a critical role in training, implementation and integration, as well as in writing add-on applications.

Microsoft is expected to tightly couple SharePoint Portal Server with Office 12 to enable improved communications, document sharing and collaboration, industry executives predict. In addition, Microsoft plans to make XML-based file formats the de facto setting for Office 12.

"It's a tightly integrated collaboration, content and office product," Rugullies says. "Office is transforming slowly into a bit of a platform. It's no longer just an office productivity tool. People will need a lot of help."

The Business Case
At its Worldwide Partner Conference in July, Microsoft threw around impressive numbers in hopes of wooing partners to the Information Worker competency.

"He had never heard of us, but he found our company in the Microsoft Resource Directory." Zoran Nikolic, Managing Director, GM Solutions Inc.

During a keynote presentation, Allison Watson, vice president of the worldwide partner group, laid out the opportunity. The average highly profitable partner does about 16 portal deals a year, averaging $20,000 in software and $60,000 to $80,000 in services, with a return of investment (ROI) within nine months, and an eight to 10 times payback on their investment in creating a portal practice, she told the audience.

Microsoft Corporate Vice President Chris Capossela told attendees that partners typically take about four months to get their first deal, break even in nine months and can get a five-times ROI over two years after building a portal/smart client/Office application practice.

A couple of months removed from the conference, Flynn tempered those statements, but only to a point.

"The Information Worker business group has observed that the partner microeconomic data varies based on the particular customer segments and sophistication of the partner engagement," Flynn says. "Allison Watson's data aligns closely with our own findings for relatively simple information portals in the mid-market segment."

As for Capossela's assertions, Flynn offers: "The Information Worker Business Group has conducted in-depth partner interviews and analysis in many subsidiaries around the world. These figures represent aggregated estimates across many geographies."

Translation: Your results may vary. Nonetheless, Flynn does paint a rosy picture for service providers.

"There is a $140 billion opportunity for partner services around the five Information Worker competency specialization areas in calendar year 2007," says Flynn. This figure represents services that solution providers can offer around specialization areas such as portals, deployment, line-of-business integration, business process automation and workflow, he says.

Target Partners
Microsoft expects that every one of its partners can benefit from earning the Information Worker competency, but certain groups may find the competency an easier sell.

"Partners that have a solutions development component to their business are the likely candidates for Information Worker because Office 2003 is a rich development platform with native XML and .NET support," Flynn says. "Moreover, partners familiar with Microsoft servers like Exchange Server and SQL Server represent excellent candidates to invest in collaboration or portal practices with Windows SharePoint products and technologies."

Solution providers with expertise in multiple vendors' products most likely will provide the biggest benefit to customers grappling with the problem of integrating multiple technologies across their business, says Forrester's Rugullies. "[Companies] have so many vendors, many of which are trying to play in some or all of the [same] areas as Microsoft. They're trying to figure out how this vast array of pieces fit together," she says.

Impressive Results
GM Solutions isn't the only partner reporting impressive results after gaining the Information Worker competency.

Alternative Technology Inc., a Gold Certified Microsoft Partner with Information Worker and Networking Infrastructure Solutions competencies, has seen its service revenue increase 35 percent year-over-year, says John Ross, vice president of technical services. The Englewood, Colo.-based distributor partners with some of its reseller customers to deliver Information Worker-related services to clients, resulting in improved data management, prioritization and collaboration.

DynTek, a solution provider in Irvine, Calif., is likewise enjoying growing demand for its Information Worker services, says David Upton, director of applications infrastructure for the firm.

While DynTek's overall revenue increased about 5 percent compared to last year, the Information Worker portion of the company has seen sales increase about 20 percent, Upton says.

The company currently offers Information Worker services only in the Southwest, but plans to roll it out to offices around the country over the next couple of quarters. "There's four times the work as there are people to do the work. It's the best business problem to have—more business than you can handle," he says. "The ROI is fairly obvious when you add six employees and they're all out billing customers at a good, healthy rate."

The ROI can be fairly dazzling from the customer's perspective as well. One client that Alternative Technology worked with migrated 50,000 seats from a legacy document-collaboration solution into a system based on Exchange 2003 and SharePoint, dramatically speeding up a document-approval process that previously took an average of 12 to 13 hours.

"With the new system, that could be taken down to an hour," says Ross. "That is a substantial cost-saving for them."

Helping Hands
While Microsoft is actively wooing partners, achieving the competency is a rigorous task, say channel executives.

As part of its strategy to earn the Infor-mation Worker competency, DynTek hired two new engineers with application development backgrounds. In addition, the company trained six senior engineers and consultants on Office, SharePoint and BizTalk—essential components of the competency, says Upton.

Partners must also demonstrate at least two genuine, completed customer installations, a move made easier when Microsoft gave DynTek some sales leads, he says. In addition, DynTek targeted existing clients and provided Information Worker-based services at no charge, Upton says.

DynTek was one of a select group of partners that participated in Microsoft's Flight School, a semi-formal program designed to help solution providers get up to speed quickly on the Information Worker competency, he says. Microsoft provided sales training, facilitated technical training and oversight to DynTek's development of Windows SharePoint Services, Upton says.

"When Microsoft is interested in something, you need to pay attention." Dave Upton, Director of Applications Infrastructure, DynTek

Likewise, Microsoft has helped Blue-spring Software Inc., says Jeff Mills, vice president of channel development and partner enrichment at the Cincinnati-based developer of business process management (BPM) software. The company, which sells exclusively through a channel of nine resellers, has "a pipeline that's going bonkers right now," he says.

Using Bluespring Software's BPM suite, companies can integrate Office programs such as Excel into their customer relationship management, sales force automation and enterprise resource planning solutions.

"We put human worker-centric processes in place," Mills says. "[Microsoft] is opening doors for us."

Relationship Building
Given the impact that Information Worker products have on an organization, they can also open doors for solution providers to reach deeper into client organizations.

Rather than just targeting the IT department, DynTek uses its Information Worker competency as a passage into the executive suite, as well as the human resource and accounting departments.

"It turns out that they're even more excited about it than our friends in IT," says Upton.

To date, about 75 percent of its Information Worker-related business was generated by existing clients.

"The 25 percent of new business was, actually, a surprise," Upton says, noting that referrals from Microsoft generated many of the requests from new clients. "I think this is going to help our business grow significantly."

Microsoft To-Do List
About the only complaint Ross has is that Microsoft could do more to educate clients about the value that partners with the Information Worker competency can deliver.

"The sales process is taking longer, primarily because of confusion over licensing [complexities]," he says, noting that Alternative Technology sells about 1 million Microsoft licenses each year. "The No. 2 delay is it's not clear in the majority of Microsoft material what the business benefits are of Microsoft Exchange 2003."

Microsoft, which typically garners acclaim for its marketing muscle and know-how, could do more to improve sales, such as offer tiered pricing or discounts for loyal clients who have purchased all the past versions of Office, Ross says.

In order to accomplish its goal of certifying more than 3,000 new Information Worker solution providers in the next 18 months or so, Microsoft must clarify its message to both prospective customers and partners about the long- and short-term benefits of investing in the company's technological dream.