Partner + Partner = Profits

With research confirming the value of P2P activity, Microsoft focuses on ways to help its partners join forces with each other.

Partnership powers profitability. That's always been Microsoft's underlying message about the value of its alliances with other companies. Now Microsoft is extending that same philosophy to encouraging its partners to build relationships with each other as well.

And partners are particularly open to those networking opportunities as their industry moves into an era of Software as a Service (SaaS), or, in Microsoft parlance, Software plus Services (S+S).

"Partners are telling us that, particularly around moving into Software plus Services, they're seeing a need to evolve their own business models and those lines between partner types are blurring," says Marie Huwe, Microsoft's general manager for partner marketing and strategy. "They all need to find ways to deliver software and services from an online perspective."

For instance, Huwe says, "if I'm an ISV and I've got customers asking for an application as an online service, I may not want to go and invest in building out that kind of data center for myself. So I'll go find a hoster to help me out."

Marie Huwe, Microsoft's general manager for Partner Marketing and Strategy, says promoting partner-to-partner (P2P) networking is a top priority this year.
Marie Huwe, Microsoft's general manager for Partner Marketing and Strategy, says promoting partner-to-partner (P2P) networking is a top priority this year.

Valuable Relationships
It's no secret that that such partnerships can be lucrative. Analyst company IDC surveyed 429 members of the International Association of Microsoft Certified Partners (IAMCP) in 14 countries last year; researchers reported that interactions between them generated more than $6.8 billion in revenues in 2006. Small and midsize partners surveyed attributed, on average, 47 percent of their income to P2P deals. (For more on IDC's study, see "Hidden Gold in Partner-to-Partner Transactions," August 2007.)

Among Redmond's existing P2P resources is the Partner Channel Builder, an online resource where Microsoft Partner Program members can promote themselves to each other, post and search for business opportunities and otherwise collaborate. Launched in 2005, Channel Builder currently attracts about 8,000 visitors per month, Huwe says; about half of those visits result in some kind of P2P contact.

High Demand
Microsoft is exploring ways to incorporate social networking-the community-building technology popularized by Web sites such as Facebook and MySpace-into Channel Builder and other P2P resources. In fact, Microsoft's United Kingdom already uses a Facebook-style tool to help partners meet each other.

Partners Seek Partners for SaaS Success

New results from IDC's survey of 429 Microsoft partners worldwide indicates that:

  • 70 percent of those surveyed view SaaS as an opportunity.
  • 54 percent plan to seek partnerships to resell SaaS solutions.
  • 50 percent plan to seek partners to help provide SaaS implementation services. 17 percent say they will seek peer-level companies for this capability.
Source: IDC report, "The Impact of P2P: Measuring the Value of Partner-to-Partner Business Activity in the IAMCP Network"

There's also been discussion of creating networking opportunities for specialized groups of partners-for instance, those primarily serving public-sector clients-and even of some kind of partner "matchmaking" service (although Huwe doesn't particularly care for that term). Huwe says P2P activities will also be a major theme of this year's Worldwide Partner Conference, to be held in July in Houston.

About the Author

Anne Stuart, the former executive editor of Redmond Channel Partner, is a business technology freelance writer based in Boston, Mass.