Here's What You Think

<i>RCP</i> readers weigh in on our annual survey about the Microsoft Partner Program, the IT industry, SaaS and the economy.

Just 15 months ago, my Redmond Channel Partner colleague Lee Pender noted that if Charles Dickens were writing A Tale of Two Cities about the Microsoft Partner Program (MSPP) in 2007, he wouldn't be able to get past the first half of his famous first sentence: "It was the best of times, it was the worst of times."

As Pender put it: "RCP's 2007 reader survey reveals no such dichotomy in the Microsoft channel. For you, the Microsoft partner, it's the best of times -- for the most part."

Well, to borrow the title of a much more recent work -- the title of S.E. Hinton's classic novel for young teens: That Was Then, This Is Now.

RCP's most recent reader survey, conducted in December 2008, indicates that, overall, most of you are satisfied with the MSPP. But -- no surprise here, given the economic turmoil of the past year-plus -- you're worried about the road ahead for Microsoft, for your customers and for your own businesses. One Bellevue, Wash.-based Gold Certified Partner summed up your collective mood in a masterfully understated verbatim comment: "It's looking like a tough year for partners."

Figure 1
[Click on image for larger view.]

At the same time, RCP's third partner survey indicates that, even in the face of losses, layoffs and cutbacks in Redmond and elsewhere, there's reason for optimism. In fact, the majority of survey respondents projected that their businesses will grow this year, albeit probably more slowly than they'd like.

The Current Climate
As we entered 2009, change was in the air, and not just in Washington, D.C. A Seattle-area survey respondent spoke for many in calling on partners to reinvent their businesses to meet today's needs: "We must craft new and different ways to reach goals, increase sales and shelter our clients from complex technologies," the respondent, a Registered Member, noted.

But that's especially challenging when those clients are more reluctant than ever to crack open their wallets. Only about 5 percent of partners surveyed -- 29 respondents -- reported that most of their clients expect to increase IT spending this year. Nearly half expected the bulk of their base to cut spending; 46 percent said their customers planned for spending to stay about the same.

"Most of my customers are taking a wait-and-see attitude to upgrading computers right now, unless it's something that's down," said another Seattle-area Registered Member, adding that those clients "may end up completing projects next year -- if the economy turns the corner."

Still, the majority of partners weren't planning to cut back on their offerings: About 95 percent planned to either expand their products and services or to keep them about the same this year.

MSPP Under the Microscope
The majority of partners surveyed seemed satisfied with the MSPP-70 percent described themselves as "happy" or "very happy" to be in the program. Add in the "somewhat happy" respondents, and the percentage of positive responses heads north of 95 percent. However, the percentage of highly satisfied program members has dropped since our 2007 survey: Back then, 30 percent of respondents said they were "extremely happy;" this time, just less than 25 percent described a similar level of satisfaction. Still, only 4.5 percent of respondents to the more recent survey self-identified as "unhappy" or "very unhappy."

The MSPP also stacks up well against other vendor channel programs, according to survey respondents. Nearly 12 percent ranked the MSPP as the best of the bunch; nearly half ranked it as "much better" or "better" than similar programs. About 7.4 percent ranked it as "worse" or "much worse," while less than 1 percent -- just four respondents -- dubbed the MSPP the worst program of its kind.

Among the happy campers was the Alabama Registered Member who commented: "There is no partner program in the entire industry that offers the sheer number of valuable, effective resources to as many people as Microsoft's Partner Program does. It's an amazingly broad and potent program that can allow the smallest start-up or the largest company to build their solutions business using Microsoft's platforms and applications."

Another Registered Member, from Oklahoma, agreed more succinctly: "The Microsoft Partner Program is a very valuable resource to my business."

Room for Improvement
Despite those laudatory comments, many respondents cited specific concerns about the MSPP.

Figure 2
[Click on image for larger view.]

"We've seen the program go from 'What can we do for the partner?' to 'How many copies of Office 2007 have you sold?'" one longtime Certified Partner from Montana wrote. "When [Microsoft employees] come to our state twice a year, they spend more [time] on trying to get others to be partners than on those of us who are already partners. We're downplaying our Microsoft connection now because of the lack of real partner support."

Another Certified Partner had dismissive comments about Microsoft's efforts to streamline operations between those inside and those outside Redmond's walls. "The new 'One Microsoft' reorg of their sales teams is a complete mess," the Texas-based respondent wrote. "Partners are finding it impossible to figure out who the real decision makers at Microsoft are. Even internal Microsoft people aren't sure who has authority for what. It made sense on paper, but not in the real world."

Others raised specific concerns about the value of MSPP membership. "Partner programs where everyone is a member do not make one reseller stand out more than another," an Indiana-based Gold Certified Partner wrote. "The only reason we're a partner is for the software and support calls we get every year. As we receive no marketing funds, this is the only benefit that we're currently taking advantage of."

A New Jersey-based Certified Partner had similar concerns: "After working with the partner channel for over two years, we're wrestling with the benefit of this program," a company executive wrote. "We feel that Microsoft as an organization is great at marketing and product support. However, as a sales organization-providing sales support for partners-Microsoft is definitely lacking."

Program Size and Structure
Most respondents indicated that they don't think the 400,000-plus-member MSPP is getting too crowded: Nearly 63 percent agreed with the statement "the number of Microsoft partners is about right," while only 33 percent responded "there are too many Microsoft partners."

Respondents overwhelmingly supported the existing MSPP structure, with 67 percent indicating that Microsoft should keep the Gold Certified level and nearly 75 percent supporting the Certified level. Somewhat surprisingly, partners were lukewarm to the idea of Microsoft introducing a new top-level partner designation (such as "Platinum"); only one-third of those surveyed agreed that Microsoft should take that step.

Still, many respondents had specific concerns about moving between program levels. "We used to be Certified Partners," a Georgia-based Registered Member admitted. "When the rules changed, we were too busy servicing our clients to perform the necessary step to become Certified again. Some reasonable period of grandfathering would have helped us enormously."

A Registered Member in Arkansas told a similar story: "We were Certified Partners until the program was changed to either fit companies that sold a lot of Microsoft products or have large programming departments. We're a small development company with many Microsoft [application development] awards, but aren't Certified Partners anymore due to the way the program was changed into a sales and/or very-high-cost-of-membership club." Bottom line, according to this respondent: "The Partner Program is great for large companies, but is a burden on the small company trying to make a difference."

For that reason, according to another partner: "It would be nice if there was a partner level that could fit between Registered and Certified for partners who are advocates within the channel and within the market."

Figure 3
[Click on image for larger view.]

Some were wondering about the status of an MSPP overhaul widely discussed during the 2008 Worldwide Partner Conference in Houston last July: "Whatever happened to the 'Good,' 'Better' and 'Best' partners?" asked an Illinois-based Registered Member, referring to a "framework" of new designations that MSPP executives said might be used to rank partners' proficiency in their competency areas. (In announcing that effort, program officials noted that it was a work in progress that would unfold over the next few years; see RCP's past stories about the overhaul: "The New Rules of Partnering With Microsoft," July 2008, and "The Microsoft Partner Program Turns 5," October 2008.)

An overwhelming majority of survey respondents were either supportive of or indifferent to another MSPP initiative announced last year: the requirement that all upper-level partners undergo customer-satisfaction ("C-Sat") surveys, with data collected by a third party and reviewed only in aggregate by Microsoft. Asked about how the C-Sat effort might affect their companies, exactly half the respondents said they expected it would be "very helpful" or "somewhat helpful." Nearly 49 percent said they were "neutral" about the initiative, while just more than 1 percent -- seven respondents in all -- deemed the requirement "damaging" or "very damaging."

Meanwhile, other respondents had no major issues with the MSPP-but couldn't say the same for Microsoft itself: "The Partner Program is getting better," a Minnesota-based Certified Partner wrote. "It's the frustration with the Microsoft products that's the problem." Customers turned against Microsoft because of problems with Windows Vista and other products, this partner contended, adding: "We spend way too much time on problems related to Microsoft Live Meeting and other Internet Explorer-related problems."

Too Small to Participate?
A few respondents took issue with Microsoft's attitudes toward SMB customers and the partners who serve them.

"The Partner Program fails to recognize the customers I serve, which are small companies that are technology-intensive, often offering software services to their own clients," commented one respondent, who identified himself as a Registered Member but didn't include a location. "These are not typical small business customers who use Office, etc. They develop and rely upon complex custom database and application systems. Yet they often have revenues under $20 million. This sector is invisible to Microsoft, possibly because they don't represent a high number of seats for licensing purposes."

One partner opined that Microsoft's Small Business Specialist Community (SBSC) had become too loose: "Microsoft killed the effect of the SBSC when Gold Certified Partners that do not truly service small businesses were allowed to obtain the designation only to move their companies up higher in the listings," the Nevada-based Registered Member complained.

Figure 4
[Click on image for larger view.]

A Bright Spot in the Gloom?
When it comes to Software as a Service (SaaS), partner opinions are all over the map.

Some saw SaaS -- or Software plus Services (S+S) -- as a bright spot on an otherwise largely gloomy horizon. "S+S will be a growth area for any and all outsource providers going forward," predicted a Gold Certified Partner from Texas.

Others were clearly nervous: "I feel some threat from SaaS -- in particular, how Microsoft may direct-market," one Illinois-based Certified Partner stated. And some seemed baffled by all the fuss. One respondent said SaaS would have "no effect on our business;" another stated: "I think it's a fad."

Only 16 percent of those surveyed said they were already reselling Microsoft's S+S offerings. And the survey indicated that most respondents' short-term S+S plans are murky at best. Asked whether they planned to start reselling or expand their sales of S+S offerings in the coming 12 months, only 20 percent said "yes," with the rest divided between "no" (32.5 percent), "maybe" (28.1 percent) and "don't know" (19.4 percent).

Despite economic woes and widespread uncertainty, the majority of Microsoft partners managed to remain positive about their prospects this year. Only 15 percent expected that business would decline in 2009, with 23 percent predicting no change. Some 62 percent projected that their companies would actually grow, although most weren't hoping for more than single-digit increases. Still, that's a hopeful sign that although this certainly isn't the best of times, it may not be the worst of times, either.