In-Depth

An Interview with Microsoft's New Dynamics Channel Chief

WEB EXCLUSIVE: Former longtime IBM executive Victor Morales made his public debut at Microsoft Convergence after three months on the job.

• By Barb Levisay
• March 26, 2015

Just 90 days into his new role as Microsoft's top Dynamics channel executive, longtime IBM employee Victor Morales faces the huge challenge of adapting the current Microsoft channel programs to support an increasingly diverse set of partners.

Morales joined Microsoft in December as vice president of Dynamics partner programs and sales, replacing Doug Kennedy, a former Oracle employee who ran Microsoft's Dynamics partner organization since 2008.

During an interview at the 2015 Convergence conference, Microsoft's annual Dynamics confab which took place last week in Atlanta, Morales shared his perspectives and goals for the coming year.

The 24-year IBMer's last few roles at the company involved North America and then Asia Pacific sales of IBM System X, Big Blue's x86 server line. That business was sold to Lenovo in a deal announced in January 2014 that closed shortly before Morales moved to Microsoft. Morales said his System X roles had a heavy channel component.

"For the first 10 years, it was predominately a direct-led motion through the enterprise. Starting about Y2K, we did a transition to the channel," Morales said. "If you look at the last six years from 2008 to 2014, between 67 percent and 90 percent -- depending on the region -- of sales for the businesses that I managed were channel-driven."

As is common for high-ranking executives new to worldwide partner roles at Microsoft, Morales traveled widely during his first 90 days, making an effort to meet with as many partners as possible. Describing his impressions of the current Dynamics partner channel, Morales said, "I think it's a very strong ecosystem. From my experience so far, it represents the strongest channel I have been a part of -- in terms of its diversity from SMB to midmarket to enterprise and in terms of its breadth from global ISVs to system integrators."

Morales has high regard for the accomplishments of the Dynamics channel since the ERP products became part of the Microsoft ecosystem in 2000. "They have done wonderful things for Microsoft over the past 15 years. Partners have been the constant in the marketplace, delivering results that they should be very proud of," Morales said. "And we have a lot of opportunity in front of us. There is much more for us to do together."

While Morales recognizes that the partner ecosystem has been doing a good job, he believes that there are areas for improvement, including marketing and efficiency. He also sees challenges with the partner program and plans to initially focus on removing the barriers that are making the connections between Microsoft and partners more difficult than they should be.

"I understand that partners have been challenged by a lack of transparency into incentives and cumbersome processes," he said. "I'll be simplifying those processes so that they can build their businesses around them. We'll provide more transparency into changes, like the Inner Circle guidelines and the recent announcements we've made about Convergence."

Morales specifically notes that making too many changes in programs and policies is distracting and disruptive to partners' businesses. "We need to stay the course and not vacillate. Put something in place and leave it for at least a year," Morales said. "We need partners to focus on building their businesses."

Addressing his plans for channel growth and enablement, Morales points to the unique requirements of ERP and CRM partners.

While recruiting new ERP partners will be part of the plan, Morales expects to build on the strengths of the current ERP partner channel. "My emphasis and energy will be spent with the partners that we have today," he said. "How can we be more productive together?"

Morales argues that simplification of the Microsoft program processes will help, allowing partners to focus more on their businesses. Working more closely with the Dynamics marketing team, he hopes to give partners more coordinated marketing support.

In terms of CRM partners, the recent addition of Dynamics CRM Online to Open Licensing adds many more SMB resellers. "Not every reseller will become an implementation partner, so we want to support the peer-to-peer relationships that have already been developing to ensure successful implementations," Morales explained. "In addition, we are working with the distributors to make sure that they are able to help the resellers do the implementations. That's a work in progress."

Equipping non-Dynamics partners, which make up the bulk of the Microsoft channel, to take advantage of the addition of Dynamics CRM Online to their cloud portfolios is a high priority for Morales. "As the Dynamics partner leader, I am going to invest in resources to ensure that the Office 365 partners are skilled and equipped to have a business-value conversation," he said. "We're dedicated to helping those partners who want to build a practice around CRM. For those who don't want to build on CRM, we'll introduce them to other Dynamics partners or provide them with the option of the distributor-provided services."

This approach certainly confirms Microsoft's goal to present a more unified vision for its business solution set. As Morales said, "This is the convergence of Microsoft cloud for business -- with personal productivity, departmental productivity and business productivity through Dynamics -- all on the underpinnings of Azure. These worlds are coming together."

Just a couple of years ago, the Dynamics partner channel was primarily composed of traditional ERP resellers with a dash of CRM on the side. While the push to the cloud has been clear, Dynamics ERP is the last one to lift off. This will be a time of transition as Dynamics CRM resellers lead this portion of the channel into the cloud. There is no doubt that Morales has his work cut out for him in supporting this diverse set of partners.

More from Convergence 2015:

• Next Dynamics CRM Update To Get Integration with Power BI, Office 365
• Microsoft To Optimize Windows 10 and Azure for 'Internet of Things'
• Microsoft Launches Previews of Office 2016, Skype for Business
• Microsoft Expands Power BI Preview to More Markets, Data Sources