Directions

Clouding the MPN's Future

• By Paul DeGroot
• March 01, 2011

Designing a good partner program is never easy, but Microsoft has been generally successful at coming up with programs that keep its massive partner community engaged with the company.

The Microsoft Partner Network (MPN) represents another ambitious effort to tailor that partner community into a lean, mean, Microsoft-selling machine -- but it could also be an example of keeping your nose to the grindstone too long while the world changed around you.

In this case, what's going on in one part of Microsoft doesn't sync with something else that's happening at Microsoft.

Among the MPN's goals were to put more focus at the top of the partner tier and make it more exclusive, encouraging partners to grow and merge if necessary, and to meet stiffer competency and revenue requirements.

So far so good. But on another part of the Redmond campus, other activity is taking place. The company watched with alarm when Google entered the desktop productivity space with Google Apps. Every dollar that Google makes from Google Apps is at least $5 to $10 that Microsoft doesn't make from Exchange, Office and SharePoint. Google doesn't need to make a lot of money to hurt its biggest competitor quite badly, because more than 60 percent of that Microsoft revenue is profit.

To compete, Microsoft goosed its nascent managed services effort and switched its focus to the cloud. At last year's partner conference the cloud dominated everything.

The problem is that the partner program doesn't appear to be aimed in the same direction. Cloud services shift most of the deeply technical work to the hoster -- in this case Microsoft -- who manages the servers, the datacenters and the switches. While partners may have a role during migration (when Microsoft isn't doing it, because it bids on migrations for customers with more than 2,300 seats), there's much less for them to do once it's complete, except to manage the desktops. And in act two of its cloud services program, Microsoft plans to do that, too, with Windows Intune.

Has the MPN set up a partner structure aligned with what is apparently the No. 1 priority at Microsoft? Doesn't look like it to me.

I haven't detected a lot of enthusiasm from longtime partners about the cloud, whether big or small. Several have told me that they'd have to sell thousands of online seats just to pay the salary of one sales person to sell them, and they'd have to sell a lot more seats to make a contribution margin equivalent to what a good engineer delivers. But the cases that Microsoft rolled out on stage at the partner conference involved an average of about 140 seats. Does that sound like gold-level territory to you? Not to me.

So has Microsoft designed the wrong partner program?

Not necessarily. It's just as easy to argue that it has overemphasized the cloud. With a portfolio of products broader than any competitor, Microsoft doesn't need to put all of its eggs in one basket; and with its focus on the cloud -- even if it's only public relations at this point -- it appears to be doing that. And that's dangerous.

The cloud focus leaves partners concerned that what they spend in money and time building skills isn't a priority for Microsoft. Is earning gold competency status in unified communications a good investment if Microsoft is going to push Exchange Online and Lync Online? The exam requirements for that competency don't contain a single exam related to Microsoft online services. Will a partner who strains to meet a $180,000 revenue requirement get a gold star for succeeding or a lecture in how important it is for Microsoft to win in cloud services?

And who's telling customers about the merits of the server infrastructure that earns Microsoft billions each year? The same company that's telling them to ditch their infrastructure and move to the cloud.

That creates confusion, and no matter how well you design a program, confused partners and confused customers do not make a good story.