In-Depth

Whither the PAM?

Cloud computing, the economy and partner program changes make the future role of Microsoft partner account managers uncertain.

• By Lynn Haber
• July 15, 2009

The Microsoft partner account manager (PAM) system is at a crossroads. Microsoft has used the model of one-to-one management by a PAM, generally for Gold Certified Partners, and one-to-many management by a telephone PAM or telePAM, primarily for Certified Partners, for years.

Forces are battering the existing model from all sides. Microsoft is preparing to overhaul the Microsoft Partner Program (see "Microsoft's New Deal"). While changes to the PAM infrastructure haven't been detailed, the program that represents the spot where the rubber meets the road for Microsoft and its partners is sure to be affected by any program adjustments.

At the same time, Microsoft's company wide push into cloud computing and Software plus Services (S+S) has the potential to either strengthen or weaken Microsoft's

commitment to one-to-one relationships with partners. Additionally, Microsoft has responded to the sagging economy by cutting back on the number of partners who receive special attention from a national team of PAMs and cut back on marketing money for partners, according to several solution providers. Are those short-term changes, or are they symptomatic of structural adjustments that will last much longer?

It will probably take well into Microsoft's fiscal 2010, which begins this month, for the direction of the partner-PAM relationship to become clearer.

A New Face
Accompanying all these tectonic shifts in the PAM-partner relationship is a relatively new face overseeing PAMs within Allison Watson's Worldwide Partner Group. Industry veteran Ross Brown took the newly created position of vice president, ISV and Solution Partners, in July 2008 and is becoming steadily more visible in the role. For example, Brown will keynote a session at the Microsoft Worldwide Partner Conference this month in New Orleans.

In an interview with Redmond Channel Partner magazine, Brown expressed a fairly traditional view of the PAM. "The role of the PAM is to support partners by engaging with partners on their priorities, business plans and roadmap for growth. The PAM helps to drive alignment between Microsoft and the partner, identify potential new growth paths, and facilitate engagement with the right Microsoft and partner ecosystem resources. PAMs are focused on growing all parts of the partner's business, from license sales to services growth to customer renewal and profitability," Brown says.

Brown contends partner account management has gotten more strategic to Microsoft's business over time and assures partners that trend is continuing. "If you looked back 10 years or so, you would have seen most of this focus on our largest partners and on the 'enterprise' business. But it has since grown more pervasive within Microsoft, with PAMs now in all sales-related organizations: Enterprise and Partner Group; Small and Midmarket Solutions and Partners [SMS&P]; Original Equipment Manufacturers; Communications Sector; and Public Sector, for example, and we're working with more partners than ever before."

Trusted Advisors
He says the PAM role has also changed significantly. "Many years ago, PAMs focused more on business alignment and development but were often seen more as a facilitator between our partners and our front-line sales force. Today, PAMs are viewed as sales managers in their own right at Microsoft, each held accountable for and managing a virtual sales team of partners against shared sales-growth objectives.

"There truly has been an evolution from simple channel management toward true partnership, enabling us to engage in business development as a trusted advisor with our partners; and more direct accountability between our PAMs' work with our partners and Microsoft's product groups."

Microsoft managed partners agree that the frequent support they get from the vendor's team of PAMs is exceptional. These long-term PAM relationships help channel partners navigate Microsoft's vast array of programs as well as steer applicable resources to them. Any grievances about PAMs point more to the PAM program than to the PAMs themselves.

Matt Scherocman, vice president of consulting services at PCMS IT Advisor Group, a Gold Certified Partner based in Cincinnati, says the company gets great support from a PAM it has had for years.

"Our PAM helps us with strategic day-to-day issues or problems [and] is proactive with marketing campaigns, identifying marketing resources and closing customer opportunities," he says.

PCMS IT Advisor Group serves midmarket businesses in Ohio and focuses its business primarily on Microsoft SharePoint, business intelligence, Active Directory, Exchange and Unified Communications, but also works with other vendors in the areas of security, networking and virtualization.

When Microsoft revamped its National Systems Integrator (NSI) Team in July 2008 to focus on a smaller number of partners, PCMS lost a second resource called a business development manager it had through the NSI program. At the same time, as marketing funds were shifted around in Redmond, PCMS saw its co-marketing funding shrivel to $10,000 this year from $60,000 last year.

"We stopped doing anything that has a long-term return on investment and focused exclusively on the short term," says Scherocman. Specifically, he points to Office Communication Server-an up-and-coming product from Microsoft that still needs a significant amount of evangelism. "Unfortunately evangelism costs money," says Scherocman. PCMS has been forced to reduce the number of marketing events it holds, and specifically the number of Microsoft-focused events.

"I hope Microsoft will empower the PAMs in fiscal year '10 to go strong with their partners to market with the new Wave 14 products," Scherocman adds.

'Belt-Tightening Measures'
The level of PAM support that the channel partner gets from its local PAM has remained the same. The loss of marketing dollars and the national VAR partner account manager support is having a negative effect on the company, says Scherocman.

In fact, he notes that the budget for all Microsoft partners in Ohio was a total of $60,000, adding that there are about 115 Microsoft partners in Cincinnati alone. Scherocman says he never did get a good answer from Microsoft on the steep drop in marketing funding.

At the same time, channel partners would like to see Microsoft do a better job of advertising its partners, which they say has been going downhill.

Andrew Grose, president and CEO of Nortec Communications, Falls Church, Va., a $10-million Gold Certified Partner, reports that, like PCMS, Nortec was, until recently, a nationally managed VAR.

"At the National level you're more plugged into all of Microsoft's programs. However, our local PAM has always provided the most value for the company," says Grose. He says he was disappointed when the national PAM went away, even though he understands that Microsoft, like most companies, needed to put in place belt-tightening measures.

Noting that Nortec gets great partner management from Microsoft's SMS&P, Grose cautions that the PAM support is dependent on how plugged into Redmond the PAMs are.

"The more visibility they're given within Microsoft, the more they can bring back to us, which is a real value of the PAM to the partner," he says.

Becoming Channel-Focused
On that note, Ric Opal, vice president at Peters & Associates, a $12-million Oakbrook, Ill.-based Gold Certified Partner that focuses on delivering solutions for infrastructure and collaboration, would like Microsoft to give PAMs the ability to work across sales organizations or be segment-neutral.

"If I have a K-12 deal, my PAM, who's great but works in the SMS&P group can't help me. There's no leverage," he says. "Microsoft leaves it to me to figure out who I have to work [with]. That costs me time, reducing my selling time. I'd like to see Microsoft empower the PAMs," adds Opal.

The change would make the PAM more channel-focused than Microsoft-focused. "If Microsoft stayed more focused on what the channel needs for its business, Microsoft would get more of what they want, i.e. sales," says Opal.

Microsoft's Brown says he gets those issues. "I [know] how large vendors can overwhelm their partners with direction and guidance that can be harmful or unprofitable to partners, so my goal has always been to build partner businesses that are the best business decision that a partner can make," he says.

Specifically to motivate the best PAMs to stay in the role, Microsoft raised the top level PAM job to be the equivalent of a senior leader in the field, Brown says.

"One of the realities of the PAM position is that the really good PAMs quickly move up in the Microsoft organization, so we're faced with the challenge of reward and retention," he explains. "This certainly impacts partner satisfaction and that 'trusted advisor' status the PAM had achieved. To address this, we're working very hard now to create the environment, the training and the tools to create great PAMs and reward and recognize them in the right way to keep them focused on the incredibly important job of serving our partners in the field, working closely with them every day to solve their tough problems."

Going forward, there's a great amount of uncertainty in the channel about the role of the reseller as cloud computing gains in popularity. "Microsoft will have a great cloud computing solution with or without partners," says Opal.

Will Microsoft continue to allow channel partners to white label solutions as they do with SharePoint Live and Exchange Server Live? ("I'd like to see a white-label Azure," Opal adds.) Or will there be conflict in the channel?

In fairness to Microsoft, partners realize that change comes slowly for the software titan. Nevertheless, they want answers from Redmond and from their PAMs.