The Changing Channel

Partners: Keep Pace with Microsoft in 2014 with These Course Corrections

Microsoft has a history of changing tacks in its partner strategy, for good and sometimes for ill. Its partners should take care not to get left behind.

• By Howard M. Cohen
• January 09, 2014

I often refer to "the ocean that is Microsoft." It's huge, powerful and ever-changing. If you don't navigate carefully, you can easily get battered by a squall. As we sail into the shifting currents of 2014, it's time for a few minor course corrections despite the temptations to deviate from partnering strategies that work.

I was an early user of the BASIC interpreter Microsoft wrote for the Apple II computer. Microsoft hit its "hockey stick" inflection point in August 1981 with its success at providing PC-DOS for the brand-new IBM-PC. Three years later, I would find myself at the introduction of the IBM-AT Model 339, talking to Bill Gates about IBM's TopView "menuing" system versus his soon-to-be-released "Windows." A crowd formed around us just to hear him speak.

While Windows followed DOS as the de facto standard user interface, Microsoft struggled in the 1990s to shake the notion that its solutions were insufficiently scalable. As we entered the new millennium, Microsoft became the corporate standard for desktop and network OSes and communications. It successfully displaced seemingly indestructible competition from Novell and Lotus. Today, Microsoft is close to being the de facto standard in de facto standards. That's all upside.

Navigating Through the Years
The downside of the constant change within Microsoft is the inability to maintain a consistent relationship or consistent alignment with its strategy. My first Microsoft rep was Bruce Chizen, who would much later go on to be CEO of Adobe. This was the early 1980s, and we bought our software from early distributor Joe Haydu, who arrived in a truck marked "MobileSoft." They were followed by an ever-changing array of reps.

In 2003, then-new channel chief Allison Watson visited New York and asked me what she could do to help my channel company. I told her I had nobody to talk to at Microsoft who could help me get things done. Later that year, Watson introduced the Microsoft Partner Program and introduced me to my new Partner Account Manager (PAM). That person would be my central point of contact for eight great years.

Then came the Microsoft Partner Network. This would recognize us partners more for our competencies than our identities. It was more than just a new program; it reflected the new relationship we would have with Microsoft. It was more about empirical accomplishments than personal relationships, more about scorecards than about winning. By the time we could create a great relationship with one PAM, we'd have a new PAM.

The most recent shift saw many of the best PAMs leaving Microsoft completely, followed by other great leaders. Between the negative impact of scorecards and stack-ranking, the best people we worked with at Microsoft were leaving the company.

Navigation Without Stars
The announcement of Steve Ballmer's imminent departure is only a hint of the sea change that is to come in 2014. How should we navigate?

• The cloud value prop is that compelling. Start by acknowledging that your customers agree with Microsoft that cloud services deliver better service levels at lower cost. Stop hoping to keep selling what you've been selling.
  
  
• Don't transform, evolve. Don't think you have to make dramatic changes to your business to remain relevant. You need to incorporate cloud services into the mix of solutions you provide. You've been incorporating new tools for years. This is no different.
  
  
• Become self-sufficient. Many formerly "managed" Microsoft partners have asked to be removed from the program because they don't see sufficient return. Use Microsoft's products and incorporate them into your solutions, but don't waste too many cycles seeking resources and assistance from Microsoft.
  
  
• Devices and Services. Microsoft has decided it's a "Devices and Services" company. That doesn't mean you have to become one, too. Many partners are no longer about devices at all, and certainly not avid sellers of Surface or Windows Phone. This channel became a services business long ago. Align with that side of the equation and win.

More Analysis by Howard M. Cohen:

• One-on-One with Microsoft's New U.S. SMS&P Chief
• IT Services and the Lie of 'Customer Satisfaction'
• Column Archive