How many partners will be affected when Microsoft rolls out the Microsoft Partner Network (the replacement for the Microsoft Partner Program) next month? All of them, presumably, and that's quite a lot. Despite a recession that's been deepening through the United States and much of the world since late 2007, the number of companies in the Microsoft Partner Program has remained fairly steady.
A year ago, Julie Bennani, general manager of the Microsoft Partner Program, was optimistic that the program would double in size over the next few years. Like almost everyone else, she has tempered her expectations because of the grinding economic realities of the last year. "We are at about flat," Bennani told me recently. "Given the economy, it's a pretty good size."
The company is still using the broad figure of 640,000 partners to describe its overall ecosystem. That fuzzy figure includes unregistered partners. It's also a figure that's been subject to somewhat mysterious variation. In the past it's been quoted by senior Microsoft executives as encompassing anywhere from 600,000 to 800,000 partners.
By the more concrete metric of partner companies that are actually registered as either Registered Members, Gold Certified Partners or Certified Partners, the worldwide figures have also been fairly stable in the last year.
By May 1, 2008, there were 395,184 Microsoft partners worldwide. As of April 2009, there were 394,000 -- a drop of less than 1 percent.
Growth in the number of partners internationally hides a fairly substantial drop in U.S.-based partners. The U.S. partner rolls fell by 13 percent to 122,000 in 2009. That decline was largely driven by a 15 percent drop in the number of U.S. Registered Members from 130,000 last year to 110,000 this year.
Posted by Scott Bekker on June 17, 20090 comments
A year ago Microsoft promised major changes to its partner program. This year, many of those changes will be unveiled at the Microsoft Worldwide Partner Conference in New Orleans (July 13-16). The highest-profile change? A new name for the 5-plus-year-old Microsoft Partner Program. Get ready for the "Microsoft Partner Network."
In an e-mail to RCP, Allison Watson, corporate vice president of the Worldwide Partner Group, said, "The Microsoft Partner Program is evolving. At the Microsoft Worldwide Partner Conference in July we're launching the Microsoft Partner Network, a community borne from our continued commitment to serve the needs of our partners and help them reach their full business potential."
"Everything is on the table," Watson said, adding, "Working together, we continue to focus on creating innovative solutions that drive profitability and sustain competitive advantage."
Besides the name, details are sketchy. But Watson said that the Microsoft Partner Network will provide:
- "Opportunities to strengthen partner technical, sales and marketing capabilities." Some reports have this change including improved marketing of partner designations to customers.
- "Expertise to help partners capture business opportunity with customers during the biggest launch wave in Microsoft history." Sometimes called Wave 14, the group of forthcoming products includes Windows 7, Windows Server 2008 R2, Office 2010, Exchange Server 2010, SharePoint 2010 and others.
- "Communities that spark innovation and connection." This likely includes a heavier reliance on social media and online communities, especially Facebook and Twitter. Microsoft has already begun using Facebook and Twitter to promote the partner conference and facilitate networking in New Orleans.
That Microsoft is ready to reveal much more of the next-generation of its channel program goes a long way toward explaining why the Worldwide Partner Group seemed to have gone mostly dark this year -- aside from dispensing some advice to partners on surviving the economy.
We'll have a lot more detail on what these changes could mean to partners in our July issue, which should be arriving in your snail mailboxes in a week or so. Our analysis depends heavily on Anne Stuart's July cover story from 2008, when she broke the news that Microsoft was working hard on overhauling the partner program.
Posted by Scott Bekker on June 16, 20090 comments
The Action Pack, formally the Microsoft Action Pack Subscription (MAPS), is a quarterly bundle of trial software for internal use by Registered Members of the Microsoft Partner Program. Since Nov. 30, 2007, partners have also had to pass an exam to receive the Action Pack, a move instituted to reduce abuse of the popular deal.
Roughly half of Registered Members subscribe to the Action Pack. Microsoft Certified Partners and Microsoft Gold Certified Partners have access to a different kit.
Although it is eliminating the costs of shipping physical media, Microsoft is keeping the price at $299 plus tax for U.S. partners. Subscribers can elect to continue to receive physical media along with the downloads for $498 per year. The timetable for the rollout of digital distribution varies by country.
In addition to reducing environmental impact by going digital, Microsoft says in promotional materials that the digital setup will allow partners to download the software immediately or any time and make it easier to manage user access, license keys and a license statement. Access to the digital Action Pack is through the Microsoft Partner Marketing Center.
Contents of the first digital Action Pack should include 10 licenses each of Windows 7, Office Enterprise 2007, Virtual PC 2007, Hyper-V Server 2008, Virtual Server 2005 R2 and System Center Essentials 2007. It should also include five licenses of Dynamics CRM 4.0 Workgroup Server and one license each of Small Business Server 2008, Essential Business Server 2008, Home Server, SQL Server 2008, Exchange Server 2007, SharePoint Server 2007 and other software, according to Microsoft FAQs.
Author's note: This entry has been updated to remove references to the price of the Action Pack dropping by $100. When I originally posted, the Microsoft site listed the price of the Action Pack at $199 instead of $299. The lower price was temporarily listed on the site, but I'm told by a Microsoft spokesperson that it was simply a typo.
Posted by Scott Bekker on June 03, 20096 comments
One of the standard pieces of advice in helping partners weather this deep recession, from Redmond Channel Partner magazine and from around the industry, has been to encourage the channel to take advantage of vendor financing programs. Microsoft Financing had been among the most generous and attractive of those programs.
In dispensing this bit of wisdom, we've been sensitive to the fact that like credit card terms, the rules could change at any moment or the company backing Microsoft could make its credit requirements much tighter.
Well, the other shoe has dropped on Microsoft Financing. On May 20, Microsoft changed the terms of its financing program to require that 35 percent of any Microsoft-financed deal be for Microsoft software.
One of the main attractions of the program had been that with even a modest amount of Microsoft software, a partner could guide a customer to Microsoft Financing to fund a full deal that also included hardware, other software and partner services. One of the benefits of the approach, which Microsoft regularly extolled, was that bringing financing into the deal often made the deal much larger. When customers found they could pay for solutions out of operational expenditures rather than out of capital budgets, they'd often make larger commitments for solutions that could do everything the customer needed rather than most of it.
I asked Microsoft about the reasons behind the new 35 percent requirement, which Microsoft characterizes as a "policy clarification."
"This policy clarification of including Microsoft content in all financed originations may impact some customers, but in the aggregate, this will have little impact on the majority of the customers we serve. Microsoft Financing uses prudent business lending standards with terms and procedures that serve our shareholders and customers," a Microsoft spokesperson said in an e-mail statement.
In response to a request for a ballpark estimate of how many deals this would impact, Microsoft implied that far fewer than 10 percent of deals fail to meet the new bar. "Today over 90 percent of purchases done through Microsoft Financing include more than 50 percent Microsoft content," according to the spokesperson's statement.
One partner who regularly falls into that less than 35 percent category is Karl Palachuk, who called attention to the policy change in a post on his blog last week.
Palachuk, an SMB consultant and author, wrote that the change is a "deal killer" and said Microsoft has "responded to the credit crunch by destroying their own financing program."
Palachuk's blog includes the details of a recent, and typical, order, where the Microsoft end was about 20 percent.
I've got to say that at this point, I don't really see where the change helps Microsoft that much. Whether a deal includes 20 percent Microsoft software or 50 percent, a customer's creditworthiness determines the likelihood that a loan is going to be paid back. The amount of Microsoft software in the deal would have no relation to whether it's going to be paid back or not.
To me, this looks like a case of a Pyrrhic Victory for bean counters inside Microsoft who want to be able to point out how they're doing something to help cut costs. It's a false win because, if Microsoft's previous statements are to be believed, introducing financing actually leads to customers buying more products -- including more Microsoft products.
The loss to Microsoft will probably be too small for the company to notice. It's probably going to bring the most pain to those small partners who most needed the lifeline this program provided.
Is this change affecting you or changing the way you look at Microsoft Financing? Let me know at [email protected].
Posted by Scott Bekker on June 02, 20093 comments
One of the hardest problems in the channel right now is figuring out the right approach to cloud-based computing. Do you ignore it, continue with business as usual and risk getting left behind? Or do you embrace the cloud and risk getting too far out in front of your customers' demand? The real-world answer, of course, is probably somewhere in the middle.
A Toronto-based storage vendor, Asigra Inc., has been wrestling with this problem, as well, from the angle of trying to figure out how to attract and enable solution providers. It rolled out a fairly interesting partner program this week that could be a solid model for other vendors. Asigra makes backup and recovery software and relies on a mix of traditional VARs doing on-premise software deployments and managed service providers hosting the solution. The company's new channel program is called the Asigra Hybrid Partner Program.
"We call it a hybrid partner program to reflect the fact that partners can resell our software or resell the [backup] service to the customers," Eran Farajun, executive vice president at Asigra, tells us. "If the customer wasn't comfortable with cloud computing and now they are, you can move with them. It allows you to remain in the same backup platform as you evolve your own business."
The Asigra program includes three major groups of partners. 3D Hybrids resell the platform and maintain wholesale storage vaults that other Asigra resellers can use for managed backup service delivery. Farajun said the company will limit the number of 3D Hybrid partners to about 10, while insisting that those companies' datacenters meet industry quality standards. MSP Hybrids resell the platform and will normally have their own vault infrastructure to deliver the managed backup service. And VAR Hybrids can resell the platform as on-premise software, or they can resell managed backup services hosted by 3D Hybrids. Asigra doesn't host any data itself and relies 100 percent on indirect sales.
The company is offering some aggressive margins, including a deal-registration element that guarantees 15 percent of the final deal amount, whether the influencer wins the deal or loses it to another channel partner. For more information, visit Asigra.
Posted by Scott Bekker on April 16, 20090 comments
Microsoft released the public beta of Exchange 2010 this week. Kurt Mackie
covered the release for us, and also covered the
new branding and timetable for the rest of the Microsoft Office releases -- Microsoft Office 2010, SharePoint 2010, Project 2010 and Visio 2010. The upshot: Exchange is out in beta now, and will be generally available in the second half of this year. The other products are slated to be released as technical previews in Q3, with release to manufacturing dates some time in the first half of 2010.
From a channel perspective, at least three elements of Exchange 2010 are immediately interesting.
- Microsoft has made a big move into the archiving space with Exchange 2010. Archiving is a big value-add for ISVs and solution providers now. But as with all things in the Microsoft ecosystem, feature sets once delivered by third parties eventually get rolled into the base product. If the past is any guide, Microsoft's archiving implementation will be limited compared to third-party offerings at first, and smart channel partners will be able to manage the transition. There's a potential upside, as well. According to Osterman Research data cited by Microsoft, only 28 percent of companies currently archive their e-mails. Turning on a built-in archiving feature set could be a good opportunity for partners.
- In a Q&A posted on Microsoft's site, Chris Capossela, senior vice president of Microsoft Information Worker Product Management Group, said that Microsoft Chief Software Architect Ray Ozzie's famous Software plus Services memo was the foundation for the development of Exchange 2010. Elsewhere, Microsoft says the new version is the first in a wave of server products architected from the ground up to be offered on-premise, partner-hosted or Microsoft-hosted. We'll see what that means over the next few months.
- Exchange 2010 is being billed as the next step in Microsoft's unified communications (UC) strategy. New features include the ability to view preview text of voicemails within an Outlook inbox before acting on the messages and an ability to create call answering rules through Exchange.
Those are my first-blush reactions. What channel business opportunities, or threats, are you seeing in the latest version of Microsoft's latest version of Exchange? Are you more interested in what's happening with Exchange 2010 or SharePoint 2010? Let me know at [email protected].
Posted by Scott Bekker on April 16, 20090 comments
VMware Inc., a
Redmond Channel Partner Platinum Partner Program, is taking its channel efforts to a new level of maturity with the announcement this week of the next-generation VMware Partner Network, which will launch later in the second quarter.
The Palo Alto, Calif.-based virtualization powerhouse announced the new partner program Tuesday at its Partner Exchange 2009 conference in Orlando, Fla.
Major changes include the combination of all partner types under one umbrella program, the introduction of partner competencies, a revamped Partner University and a revamped partner portal.
"A lot of partners are investing in VMware, so we want to make a big investment in our partner community," said Ben Matheson, senior director of global partner marketing for VMware. "What we want to do is lay out a consistent framework that we can leave in place for the next 10 years."
VMware's current partner program is somewhat fractured, with its 22,000 partners having joined various segment-specific programs that were created at different times. Current programs include the VAD Partner Program for consultants, the VIP Partner Network for resellers, and separate programs for resellers and systems integrators.
Now all partners will fall under the umbrella VMware Partner Network. One concrete change from that is that all partners will now have access to VMware's intellectual property around delivering virtualization services. "In the past, we had one program for providing service IP to our partners and one program where our partners actually sold our software. We've now made the service IP available to all the partners without a fee," Matheson said.
VMware is also rolling out solution competencies, similar to the competencies the Microsoft Partner Program unveiled in 2004 and which Microsoft continues to use for its partner network. Initially, VMware will offer four competencies. The baseline competency is infrastructure virtualization, which covers the server consolidation that represents the current bread-and-butter virtualization business for channel companies. "For our top-level, premier partners, infrastructure virtualization is the only competency that's required," Matheson said.
The other three competencies are business continuity, desktop virtualization and virtualization management. "These are really directly related to the hot areas. We didn't want to roll out a competency, which was kind of a niche," Matheson said, adding that new competencies could be added as the virtualization market develops.
Other changes include an overhaul of the content at VMware's online Partner University to conform to the virtualization competencies and role-base learning paths. VMware also reorganized its Partner Central partner portal in the hopes of making the content easier to navigate. More information is available on the VMware partner site.
Posted by Scott Bekker on April 15, 20090 comments
Symantec Corp. this week released the 14th edition of its Internet Security Threat Report. The security vendor found some interesting things in the report covering the period from January 2008 to December 2008:
- Symantec created more malicious code signatures in 2008 than ever before -- the 1.6 new signatures is 60 percent of all the signatures the venerable (in Internet years) security company has ever created.
- Most new infections, once again, occurred while users were Web surfing.
- 90 percent of the threats were of the type trying to collect confidential information, such as bank account credentials.
- As an example of the resiliency of Internet attackers, Symantec pointed to the takedown of two U.S.-based botnet hosters in 2008. Botnet activity decreased in September and November 2008, but quickly bounced back to pre-shutdown levels. (We profiled Symantec's separate, interesting report on the underground economy in the February issue of RCP.)
- Symantec also reported that 1 million individual computers were infected by the Conficker worm by the end of 2008, and that number had risen to 3 million during the first quarter of 2009.
In addition to providing valuable intelligence on the state of Internet security, the Symantec report is designed to highlight the company's expertise in the area and give potential customers as bracing a reminder as possible about ongoing threats to their digital information. Symantec officials say that many of the company's channel partners take the report to their customers as a good conversation starter about customers' current security profile and new vulnerabilities. You can find the report on Symantec's Web site here.
Posted by Scott Bekker on April 15, 20090 comments
If you haven't heard, Tuesday was one of those big-deal Microsoft Patch Tuesdays. Altogether there were eight patches for 23 vulnerabilities. Five of those patches were rated "critical" in Microsoft's vulnerability ranking system. Proof-of-concept code exists for one of the vulnerabilities, making time of the essence for getting systems patched. Do your customers a favor and make sure they're up to date fast on this batch of patches. More information is available
here.
Posted by Scott Bekker on April 15, 20090 comments
Even for the most committed Microsoft partners, Microsoft's software is just a portion of the revenue equation.
Whenever Microsoft boasts about the opportunities for partners in the Microsoft ecosystem, it's never just about the Microsoft products. The pitch also includes all the margin partners can rack up reselling a whole solution with Microsoft software at its center. The solution could carry hardware in the form of PCs, laptops, servers, storage, printers and networking gear. There's additional software for security, backup and recovery, systems management or virtualization. Then, of course, there's the price tag for the services you render to stitch it all together.
So what vendors really go "better together," to use one of Microsoft's favorite marketing terms, with Microsoft solutions? To find out, we ran a survey in the fourth quarter of 2008, asking readers what vendors they represented in addition to Microsoft. We heard from about 500 of you.
In all, 15 partner programs qualified for the inaugural RCP Platinum Partner Program awards. Visit the RCP Platinum Partner Program section of the RCPmag.com Web site to find out which vendors and partner programs sell better together with Microsoft-based solutions.
Posted by Scott Bekker on March 31, 20090 comments