In-Depth

Marching Orders 2018: Guidance for Microsoft Partners from the Experts

Tips for managing the Microsoft relationship, for women in the channel, for correcting course on the business and for someday making an exit.

• By Redmond Channel Partner magazine staff
• February 12, 2018

The suggestions they offer fall into four broad categories. We collected advice on managing the Microsoft relationship from Gavriella Schuster, Vince Menzione, Tiffany Wallace, Matt Scherocman and Christian Buckley. There were thoughts on women in technology from Karen Chastain and Jennifer Didier. Providing tips for business course corrections were Barb Levisay, Erik Frantzen, Eric Rabinowitz, Keith Lubner, Jeff Hilton, Christine Bongard and Howard M. Cohen. Finally, offering some sage wisdom about looking ahead to exit strategies were Mike Harvath and Arlin Sorensen.

Managing the Microsoft Relationship
Investing in Artificial Intelligence is a Smart Play
Gavriella Schuster
Corporate Vice President, One Commercial Partner, Microsoft

More and more companies are looking to digitally transform their business with Artificial Intelligence (AI). According to market research firm Tractica, revenue generated from the application of AI software will skyrocket in the next five years. Starting at $1.36 billion in 2016, research shows AI generated revenue will see a 52% compound annual growth rate, stretching the opportunity to $59.75 billion by 2025.

Microsoft's new "AI Practice Development Playbook" is giving partners the guidance they need to start, grow, and optimize an AI practice. Whether they're in health care, retail, construction or finance, the AI Playbook was designed to help companies across industries develop AI practices that set them apart from their competitors and capitalize on the AI opportunity. The playbook takes a step-by-step approach to help Microsoft partners define their AI strategy, hire and train a team, operationalize their plan, go to market, and grow their AI practice. Real-world examples show how it's done.

Customers, once unsure about AI technology at home and at work, now expect time-saving, life-improving solutions to be built into the products and services they buy. With so much opportunity ahead, now is the time to get smart about making AI part of your company's digital transformation.

Partner Executives: Engage with Microsoft
Vince Menzione
CEO and Founder, Cloud Wave Partners
Host, "Ultimate Guide to Partnering"

As a podcast host and business consultant to organizations looking to better partner with the tech giant, I've had the unique privilege of interviewing scores of leaders in the industry, including some of Microsoft's top partners.

What I believe separates the good partnerships from the great ones is the commitment from the very top. CEO commitment, visibility and alignment to Microsoft have been a key factor in the success of many high-performing partners.

My advice to organizations looking to expand and grow their business with the technology giant in 2018 is directed toward CEOs and ensuring that these business leaders make executive visibility and engagement across the Microsoft organization a priority, while ensuring their business is aligned to the priorities and invested in programs, enablement and co-selling in order to drive a mutually successful set of business objectives.

Bridge Customers' Professional and Personal Experiences
Tiffany Wallace
Vice President, Business Development, New Horizons Computer Learning Centers

In my 15 years as a Microsoft Learning Partner, I've watched society evolve into adjusting to and expecting what is called "instant intelligence." This adaptation is how we interact with technology professionally during the day and personally at night. This integration is made possible by the focus in all industries on machine learning. Partners need to focus on technology as an access point from the boardroom at work to the kitchen at home.

Machine learning allows us to build on the multitude of data we can now collect. As industry evolves to capture more and more data, we need to build solutions in every aspect of our lives that integrate the technology in an intelligent way.

We as partners have focused heavily on the professional aspect of how customers adopt technology in specific industries. The emerging opportunity is how we engage the customers' experience personally. How do we continue the adoption of our technology solutions in their personal lives?

Microsoft has brought us into the home with Xbox and Surface devices. What is the next access point where we can create a technology interaction with "instant intelligence"?

Diversify Your Microsoft Revenue
Matt Scherocman
President, Interlink Cloud Advisors

As clients move more of their revenue to the cloud, Microsoft partners need to diversify their revenue streams to continue to flourish and, possibly, just to survive.

My recommendation for 2018 is to diversify your revenue and protect your margins. We are all seeing pressures on revenue and profitability. To me it feels like this is occurring in every industry as the Internet makes geography less of a business advantage. Customers are finding self-service and research easier than ever. Among the pressures:

• Traditional hardware and software sales are going away. So, the opportunities to make big margins on large product transactions is also disappearing.
• Managed services revenue is declining because there are fewer servers to manage on-premises. The reliability of cloud services sets a ceiling on what can be charged.
• Partner of Record fees continue to be changed and reduced by Microsoft. We have seen major cuts in what Microsoft calls the "rate card" again this year, and adviser fees from Web transactions were completely eliminated.

In 2018, look to make investments in new offerings. Technologies like collaboration adoption services, business intelligence, data warehousing and machine learning are just a few that are ripe with customer needs. The biggest challenge to the traditional systems integrator is recruiting talented folks who can lead these new practice areas and evolving the sales teams to be able to clearly articulate these value areas.

Get Good at Change Management
Christian Buckley
Founder & CEO, CollabTalk LLC

With so many customers, and even partners, complaining about the rapid state of innovation coming out of Redmond, it's more important now than ever before that organizations take on more of an operational focus, and become experts in technology change management. Companies that can quickly assess, adapt and adopt will be the winners, pure and simple.

Women in Tech in 2018
Join a Network for Women in Technology
Karen Chastain
Director of Global Alliances and Partners, Episerver

With women in only one of four jobs in the technology industry, it's clear that there is still a need to educate, recruit and keep women in tech roles. But talking about it is not enough. Unless companies put real time and effort into supporting the women in technology movement, they will miss out on talent needed to grow their business.

Here are two simple areas where partners can get more involved in the moment: Join a women's organization and enable women within your company.

Perhaps the easiest step is to join a women's organization. There are many active and meaningful women-in-technology networks and groups that can help you stay current on news, participate in events and be part of the movement. Many of these groups are not commitment-based and will enable you to educate yourself on current challenges, solution areas, ideas on how you can further embrace the women in your company and recruit talented women to fill roles. A few that I suggest are IAMCP Women in Technology (#iamcpwit), Microsoft Women in Partner (#mswomeninpartner) and Women in Cloud (#womenincloud).

Surely, you have some talented women in your workforce already -- don't lose them! Encourage them to get involved in the networks I just listed, start an internal women's group, and even introduce a new initiative or event with your employees.

At Episerver, we have put forward a few initiatives to help promote women in technology. I'm most proud of Digital Ninety-Nines, a podcast series that highlights the work of women who are leading digital transformation in their fields. Our goal was to carry the theme through in other ways, like our annual user conference, Ascend. At the conference, we hosted an all-women panel, including women from analyst firms, partners and customers.

So, get started today, check out the networks and groups that are available to everyone. You don't have to be a woman to join!

Focus on Hiring and Mentoring Women
Jennifer Didier
CEO/President/Owner, Directions Training

My best advice for partners in 2018, more than any other year, is to continue to target women hires and to build programs that support and mentor women in the office. As strong, resilient and loyal employees, women bring unique perspectives to the industry. We bring fresh insight into advancing the channel in new, collaborative ways. Still, we are underrepresented in the male-dominated industry. Partners must work to encourage more women to join the industry and to pursue leadership roles.

With women's contributions, the channel will continue to advance. According to WomenWhoTech.com, Fortune 500 companies that had at least three women directors saw an average return on equity increase by at least 53%, and return on sales increase by at least 42%. The return on invested capital increased by at least 66%. In today's modern workplace, women often have longer lifespans in companies than their male counterparts. They're also often more successful in initial stages. This crucial bit of insight will make the difference this year as companies work to create fresh solutions and evolve their business.

Business Course Corrections
Resolve to Make Your Next Move
Barb Levisay
Contributing Editor, Redmond Channel Partner magazine

Microsoft partners are in a good place right now.

Technology spending is up. Customers are ready to embrace new technologies and are growing more comfortable with the cloud. Office 365 has hit its stride and promises even more opportunity for partners through a steady expansion of features. Everyone in your organization is probably as busy, and billable, as they can handle.

During the good times, it's easy to get caught up in the whirlwind and put off preparing for the next cycle. Profits feel good. Diverting billable resources to development is painful.

But this is the best time to make your next move: To build the differentiator that will help your organization survive when the market is saturated or technology spending nosedives.

There is no question that specialization is key to differentiation. Partners who invest in building expertise and IP in an industry or function reap rewards through higher margins and loyal customers. As the specialist, Microsoft is more likely to invite you into opportunities.

During these good times, allocate resources to prepare your business for the tougher times. The longer this upcycle lasts, the more time you have to build expertise and reputation in your segment.

Figure Out If You Already Have a Vertical
Erik Frantzen
President, Nurture Marketing

Forrester Research Inc. recently published a report focused on the partner opportunity for Microsoft 365. One recommendation is for partners to place additional emphasis on partner-specific IP. At Nurture Marketing, we know that marketing initiatives for partners who have their own IP, combined with industry vertical solutions, are far more effective.

Clients now see the partner as offering something different from the competition and understanding their specific business at a higher level.

Stating that all verticals are served and "we are the best" at implementing a solution from a household name provider will only encourage visitors to navigate away.

Finally, we find that partners often have hidden IP and underutilized vertical expertise. Uncovering, productizing, packaging, and delivering these solutions will improve the overall messaging and improve overall client satisfaction.

Suggestions to uncover opportunities, messaging, and hidden IP:

• Look back at past projects. Did you develop a custom solution that can be monetized elsewhere?
• Survey your employees about the concerns clients are discussing with them for 2018.
• Look at the titles and industries of those downloading your marketing content.
• Survey your clients. You can ask about past client satisfaction or even missed opportunities and include a question about their biggest goals for 2018.

Market to Catch the Wave
Eric Rabinowitz
CEO/CMO, Nurture Marketing

While surfing there are three possibilities, and only one outcome is good. Be too early and you're womped against the beach. Too late and you miss the opportunity.

This year, 2018, is your catch-the-wave year. Why? The corporate tax rate is lower, the stock market is going gang busters, according to The New York Times nearly $3 trillion in profits could be repatriated, and Randstad counts a 3 million-position shortfall in IT jobs in the United States. IT spending will be increasing as many projects on hold will now be a "go project." Because IT is understaffed, your clients -- big, medium and small -- will be looking to Microsoft partners to pick up the slack.

So, here's your insight. To catch the wave, you need to be marketing. More specifically, digital marketing. Make it easy for these desperate clients to find you. Social selling, Web site refresh, pay-per-click (check out LinkedIn advertising, for example), Sales Navigator PointDrive, e-mail, SEO, marketing automation and Partner Center referrals should be your priorities.

Do it internally, or outsource it, but do it now. Avoid the womp, and catch your wave for an amazing 2018!

Listen, Learn and Lead
Keith Lubner
Managing Partner, C3

While technology is a great enabler, it is also the impediment to your success as a selling organization. It is becoming increasingly difficult for prospects and customers to differentiate your offerings from those of the competition because it's so easy and simple for the buyer to gather information on you before your first interaction with them.

The divide between buyer and seller is becoming wider, I'm afraid. To overcome this, one must boost their soft skills, not their technology skills, in order to connect, understand and differentiate. In 2018, you should remember these three words in order to pivot your path to greater success: listen, learn, lead. Do more listening when interacting with buyers. Listening allows you to learn more about their unique challenges. And when you know more, you can lead the buyer to a solution that you tailor fit to them.

Start Using Social Selling
Jeff Hilton
Founder and CEO, The Alliance for Channel Success

Sales techniques are always evolving and being refined. One technique is called social selling. The idea is to generate leads by developing and nurturing relationships via social media.

This is not about posting articles on social media and hoping to get some responses. It's about really using social platforms to personally engage prospects and generate leads.

When you think about it, this makes complete sense. Prospective buyers research products and solutions via the Web, but they evaluate potential sellers via social media. Social selling allows you to target and engage the prospects you want, effectively and without cold calling.

To get started you need contact management and other tools to support your efforts. One solution to get these easily is the LinkedIn Sales Navigator. Certain versions of Sales Navigator include a feature called PointDrive. This makes sharing of sales content super easy, and provides tracking information so you can readily see who has consumed or shared your content.

A few bits of advice: Your social selling journey begins with good LinkedIn and other social profiles. You need target-market-oriented thought leadership content that demonstrates your expertise. Start small, learn and then use social selling to drive sales success in 2018.

Make It Personal
Christine D. Bongard
Director, Partner Alliances, ATSG

We are living in an exciting time of technological advances and shifts in our industry. Over my 25-year career, I have seen trends shift and then, eventually shift back. My one take away for success in 2018 is to keep things personal.

Due to these advancements in technology and efficiencies with process, we've gotten to a point where people don't need to meet in person. No more looking each other in the eye or shaking hands. No more bonding over family pics and other oddities in our offices. If most people buy because they trust their provider, and people never meet anymore, how is this possible?

I encourage people to get back out in the field and meet with your customers. Bring them a cup of coffee or some flowers. Ask them how their project/service with your company is going. This also goes for your team. Visit your team in their offices and have a cup of coffee with people. Look people in the eye and ask them how things are going. Then, follow up on whatever you commit to doing.

Also, send personal notes, not e-mails, with two to three sentences on why you're happy that person is a client or an employee.

I guarantee you will stand out with class because people yearn to feel appreciated. These small personal touches cost little but yield great results for your relationships, which all support the success of your business.

Do Something Different or You're Done
Howard M. Cohen
Senior Resultant, The Tech Channel Partners' Results Group

Burn the word "value" into your mind, along with the word "innovate."

Famed sales motivator Zig Ziglar warned us, "If you're doing what you've always done, you're probably getting what you always got," but that's no longer the case for the IT channel. Now, if you're doing what you've always done, you've been getting less and less, and this year, you're probably done.

The only way to avoid that dismal fate is to recognize three things:

• Customers are only interested in the value you bring to them, so you need to have all of your marketing and messaging focus only on that. Don't talk about the great products and services you offer. Talk about the value of what you provide brings to your customer.
• Recognize that your customers' needs are constantly evolving and changing, so what you provide must constantly be evolving along with them. You must always innovate value.
• Note that I keep referring to what you provide, not just what you do. We've evolved from a partner channel to a channel of partners.

Always define everything in terms of the business value it brings to your customer. Talk about their gains in their language. How do you increase their profits? You must identify new products and platforms that allow you to constantly innovate new value for your customers, or they will forget about you.

The channel has finally completely changed. No longer is it about a product produced by a manufacturer, distributed by a distributor to resellers who sell it to customers. It is now about you. You are the starting point of the channel that delivers value to customers. You pull in services and software from partners you carefully select and vet to provide maximum innovation and value to your customers.

These are not marching orders. They are survival strategies. Others talk about "shadow channels" that simply don't exist. There is no channel. There is you. Your insight, your innovations -- these are what your customers are buying from you. If you're doing something new, you're probably getting more than you ever got.

Exit Strategy
Focus on SVP
Mike Harvath
President & CEO, Revenue Rocket

2018 is the year of partner transformation and to that end, we recommend that you focus on specialization, verticalization and productization." We call it SVP.

We recommend if you haven't done so already, that you specialize on the one area of the Microsoft stack/cloud offering set where you are an expert, that you pick one vertical market to specialize in and leverage the development of your process and tech-based expertise and IP.

If you're a partner that has more than $35 million in revenue you can focus on more than one market/practice area following this formula. Here are some very tangible benefits of following our methodology:

• This approach will allow you to be in the elite club of the top 20% of your Microsoft partner peers.
• It will provide the fuel to dramatically accelerate your growth of revenue and profit in 2018 and beyond.
• Microsoft partners that successfully implement this model have options to grow their businesses in ways they didn't before, can further build and fortify the business and can buy another partner business or sell the business.
• Partner companies that have successfully implemented this business model are in high demand and are commanding a premium valuation.

Define a Personal Wealth Target and a Business Value Target
Arlin Sorensen
Vice President, Peer Groups, ConnectWise

When I think about the most important piece of advice I can offer, it is the importance of defining two key numbers. These are the financial success metrics of personal and business legacy and, unfortunately, too many do not focus here until far too late in their journey.

Every person needs to define their personal wealth target (PWT) or the number they need to accumulate during their working career that enables them to live their ideal life after they receive their final paycheck.

If you are a business owner, there is a second number that matters called business value target (BVT), or the number you need to create in business value to provide the outcome shareholders expect and need. In most cases, the outcome of business value is what flows into an owner's personal wealth and will hopefully provide the dollars to close the gap between where an individual is today and where they need to be in the future.

Personal Wealth Target (PWT) ___________________
Current Personal Wealth ___________________
GAP ___________________

For most business owners, their portion of the company BVT needs to be enough to close the gap, as they have typically put all their eggs in that basket for their future.

Too many wait far too long to define these two key numbers and create a strategy to assure they achieve them. That's what HTG is helping shine a light on and provide accountability and strategy to assure legacy success.