News

Microsoft Considers Making Cloud Sales Required for Gold Competencies

• By Jeffrey Schwartz
• November 02, 2011

It's no secret that Microsoft is encouraging partners to offer its cloud computing services, but the company may ultimately step that up to a requirement.

In order to attain a gold competency in the Microsoft Partner Network (MPN), a certain percentage of licenses that channel partners sell would have to include the company's cloud services. The requirement will most likely take effect in the 2014 fiscal year, which kicks off 21 months from Tuesday.

Jon Roskill, Microsoft's corporate vice president of worldwide channels, revealed his thinking on the matter in an interview Monday. "I think that would be a very reasonable thing to spec out to people," Roskill said. "It doesn't mean we don't love you if you're not doing [cloud sales] for some reason, but we also want to be very clear that gold is differentiating our best partners and there's an expectation around that."

Asked what percentage of overall sales he expects cloud services to represent, Roskill said that is to be determined. "It's too early to say," he said. "We are talking about something that's a year and a half out. What we are going to see is how things develop. It will not be an unreasonable percentage. I'm a pretty reasonable person -- before I make a decision like that, I will do it with a lot of input, particularly from partners."

Microsoft has a bevy of cloud-based services with partner programs to support them, including Office 365, Windows Intune, the Azure platform and Dynamics CRM Online. Cloud-based versions of Microsoft's other Dynamics ERP offerings are expected to come online over the next year.

The company has also encouraged partners to subscribe to its Cloud Essentials Pack and higher-level Cloud Accelerate Pack, both of which provide internal use rights for Office 365, Windows Intune and CRM Online, and 750 hours of compute time using the Windows Azure platform.

Directions on Microsoft analyst John Cullen said it is not surprising that Microsoft would ultimately require partners to sell its cloud-based services, considering the company's "all-in" messaging on cloud.

"My take on it is, the ones that are really going to be successful are going to bite the bullet now, and move to that selling motion of selling online services," Cullen said. "They are adapting to those selling motions early because that's the future."

Indeed, Microsoft has taken a firm approach with partners serving all segments over the need to be able to sell and deploy cloud-based solutions to customers. One year ago, Vahé Torossian, corporate vice president of Microsoft's Worldwide Small and Midmarket Solutions and Partners (SMS&P) Group, told partners that they were putting their businesses on the line if they ignored the cloud.

"If you don't do it, you will be irrelevant in the next four or five years," Torossian told partners at an International Association of Microsoft Channel Partners chapter meeting in New York. Torossian, who reports to Microsoft chief operating officer Kevin Turner, is Roskill's boss.