In-Depth

Microsoft Realigns PAMs to Help Partners Go Vertical

Partners are generally receptive to the idea of streamlined account team regions and vertically focused partner account managers.

Ten years ago, Microsoft rhetorically asked the world, "Where do you want to go today?" Now, it is telling the world where it wants to go: vertical. And it is enlisting the help of vertically minded partners, promising to give greater sales and marketing support through an overhauled network of account managers.

While the structure is still complex, the realignment could simplify what has been a cumbersome process, according to ISVs selling vertical software solutions. Until now, these ISVs often found themselves repeating the same message time and again to 17 different partner account managers (PAMs). While that worked well for ISVs that wanted to tweak their message for a particular region, it was excruciatingly slow for those that offer a broader marketing message.

So, Microsoft is realigning its nationwide network of PAMs, a move that promises to help the 6,000 value-added resellers and systems integrators that specialize in Microsoft Business Solutions (MBS) and the 30,000 resellers that sell infrastructure applications to sell the entire Microsoft stack.

Under the new paradigm, Microsoft has reduced the number of district PAMs with which ISVs, VARs and SIs work from 17 to 12. The PAMs remain in three regions: West, Central and East. Most importantly, PAMs are now aligned to support partners according to whether their primary selling approach is industry-based, or focused on horizontal technology solutions or outsourcing.

Partners whose approach is industry-based will work with so-called IPAMs, who are specialized by broad industry categories: Financial Services, Health & Life Sciences, Retail and Manufacturing. IPAMs representing each of the four categories are located in each of the three regions. So, for example, there is a Health & Life Sciences IPAM who handles the Central region, another in the West and a third in the East. As of mid-August, Microsoft was still making those assignments, according to several ISVs and SIs.

Within the three regions, there are also District Technology PAMs (DPAMs) and Regional Technology PAMs (RPAMs). Both work with SIs and ISVs that primarily sell horizontal solutions in the Information Worker, Application Platform and Infrastructure space.

Finding Balance
"The approach we are taking with our channel partners is very similar to the work we are doing with our account teams supporting our customers," says Margo Day, vice president of Microsoft's U.S. Partner Group. "In short, it recognizes the customers' need for industry depth and local resources, and seeks to find the right balance between those two elements."

Under the new scheme, a partner's workload could be greatly reduced. For example, an ISV targeting the healthcare industry would only need to work with the three Health & Life Sciences IPAMs, instead of 17 district PAMs. ISVs, VARs and SIs targeting all four industries nationwide, however, would still need to talk to 12 IPAMs.

The reception by partners has been positive. "It seems to fit our strategy perfectly," says Steen Laursen, senior vice president of Redwood City, Calif.-based reseller Tectura Corp. "We expect this will help us expand our coverage. We have global coverage in 19 countries for MBS solutions, but we do not have a strong Microsoft Classic coverage beyond the Pacific Northwest," says Laursen, referring to .NET and other Microsoft infrastructure solutions.

While the PAM realignment and marketing plans were only recently disclosed in full, some partners say it has already made a difference to end users. "There has been a strong positive response from our customer base," says Dave Packer, director of legal and professional services marketing for Sunnyvale, Calif.-based Interwoven Inc., which sells document-management solutions to legal firms. "There's a feeling that with this focus, the companies will have a better understanding of what's needed from those solutions."

Microsoft's New U.S.
Enterprise Sales Districts
Microsoft's New U.S. Enterprise Sales Districts
(Click image to view larger version.)

Nagging Concerns
Other partners have voiced pointed, albeit mild, concern. "My concern is the bandwidth," says Greg Bell, marketing manager for Unitime Systems Inc., a Certified Partner in Boulder, Colo., that develops labor-management and time-clock software. "There will be an increasingly larger number of partners dealing with a smaller number of regional PAMs."

There is one other concern for ISVs, like Unitime, whose application is simply horizontal by nature: getting mindshare from Microsoft and channel partners in an increasingly vertical market.

"Microsoft in the last couple of years seems to have become very vertically focused. We're not," says Bell. "I've tried to work around that." That work has involved bending marketing efforts to show the usefulness of Unitime software in vertical markets. "It adds extra work," says Bell.

But Microsoft says there's no need for partners like Bell to worry. "We will continue to have PAMs focused on both horizontal and vertical opportunities," Day says.

Microsoft's new direction is clearly vertical, however. And Microsoft says it will expand the four industries it is now targeting to include 15 industries, 66 "vertical markets" within those industries and more than 100 "line-of-business" opportunities. As a result, it says, it is aligning itself with software and services partners, and will increase its sales and marketing spending to target specific opportunities.

All the better, says Jeff Rutherford, director of strategic alliances for Boise, Idaho-based ProClarity Corp., a developer of business-intelligence software whose clients include The Home Depot and Barnes & Noble. "In the past, when you had so many district PAMs, there were a lot of people to cultivate. You had to work very hard to find out who those PAMs were," he says. "The fact that Microsoft is recognizing the vertical focus as key to their success is good. I can easily see us having monthly calls, because you're only pulling together three people instead of 17. I can also see on an annual basis pulling together all the industry PAMs."

Putting Up the Money
Rutherford's efforts may be helped by Microsoft's pledge to funnel more demand-generation marketing dollars through its partners. While Microsoft has not specified the exact amount, it says it expects to spend 60 percent of vertical-industry marketing through partners. "I'm certain that we'll see even better sales results" because of Microsoft's vertical push, says Rutherford.

Partners are also being encouraged to sell in tandem with Microsoft's four go-to-market (GTM) promotional efforts for the mid- and enterprise markets for its fiscal year 2006, which began July 1: Business Applications, Connected Productivity, Operational Efficiency and Productivity, and Connected Systems (see "Solution Selling"). The latter centers on taking a vertical marketing and sales approach to SQL Server 2005, slated to be released Nov. 7.

Microsoft also announced that it is making significant investments in its PAM and partner technology specialist (PTS) roles. For PAMs, Microsoft is helping enhance the career path for professionals in these positions by identifying several levels of skills and value that PAMs can aspire to in their professional development. In addition, Microsoft is creating a specialized curriculum to improve PAMs' business planning and sales engagement skills so they can acquire the disciplines necessary to help partners navigate sales and customer scenarios. For PTSs, Microsoft has created a discipline called Skill Builder that helps partners improve technical sales skills that can be leveraged in sales demonstrations.

The two career-building efforts come on the heels of Microsoft's efforts to raise the skill levels and accompanying certification levels of its partners. Those efforts include the February launch of the Partner Channel Builder online tool, an electronic swap shop of sorts where Gold Certified and Certified Partners can describe their expertise and customer focus in detail, and the Competencies program, formed as part of a major retooling of the entire Microsoft Partner Program in April 2004.

Microsoft's vertical push, meanwhile, is not limited to partners like ProClarity that sell to enterprise accounts. In fact, 50 percent or more of the MBS group's marketing budget this fiscal year will be spent on vertical demand generation and branded partner marketing, Microsoft says.

Already, Microsoft partners selling to small and midsize business (SMB) accounts are being encouraged to "stress how MBS products should not be sold as 'point solutions' but as a key component within the Microsoft stack of technology," according to a recent partner briefing presentation. The idea is to have partners selling vertical applications together with all five MBS elements (Axapta, Navision, Microsoft CRM, Solomon and Great Plains); the Microsoft Office, Windows Server System and VisualStudio .NET suites; the Windows operating platform; Microsoft CRM; the FRx and Microsoft Retail Management System; and Microsoft System Center Data Protection Manager. To this end, Microsoft has created an MBS Partner Resource Desk that provides one telephone number for all partners to call, regardless of the level of certification. The Resource Desk refers callers to the most appropriate sales, marketing and training resources.

Microsoft also in June launched a "Response Management through Partner" system. Gold Certified and Certified Partners can log on to the new site to seek help with partner and customer problems. Microsoft says it will respond to each query within one day and issue a second update within three business days if the issue has not been resolved.

Microsoft also has begun aggressively recruiting new MBS partners with a vertical specialization. A year from now, Microsoft hopes to have one-half of its partners vertically aligned and more than 1,000 vertical solutions profiled and published.

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