In-Depth

Taking the Partner Pulse

Our 2005 Partner Survey reveals members of the Microsoft Partner Program are mostly a happy, loyal lot. But there's room for improvement in areas ranging from pricing and licensing to accessibility and security.

Ilya Lehrman says the Microsoft Partner Program is "definitely the strongest one I've ever seen," noting the "resources and attention Microsoft gives to partners is astounding." But that doesn't mean he doesn't have concerns, including the investment in time required to maintain competencies—and whether that investment will pay off with customers—and keeping in step with Microsoft product strategies.

Lehrman, a principal with Xerox Global Services Inc., a Gold Certified Partner in Exton, Pa., is in many ways typical of the respondents to the Microsoft Partner Survey conducted by Redmond Channel Partner. As a group, the 564 respondents are quite happy, but many express concerns about various aspects of the program, from the accessibility of Microsoft channel executives to whether grandfathering Gold and Certified Partners into the program was a good idea. Partners also get an earful from their customers about Microsoft products and practices, with pricing and licensing cropping up most often. All of this fills partners with ideas on how things could be better—ideas they were not shy about expressing in our survey and in follow-up interviews.

We took the pulse of Microsoft Partners in late May and early June (before the most recent round of changes and upgrades to the Partner Program were announced in July). Respondents ran the gamut from shops with less than $250,000 in annual revenue (13.7 percent) to those that take in $50 million or more (23 percent).

Figure 1. How happy are you as a Microsoft Partner?Responding to the simple question of, "How happy are you as a partner?," with 5 being "extremely happy," 64 percent of respondents rated themselves a 4 or 5, and 89 percent were at least moderately happy or better (see Figure 1). As a group, 75 percent describe themselves as very or extremely loyal, with 35 percent saying "nothing" could get them to drop Microsoft as a partner and support a competing platform (see Figure 2).

Figure 2. What would it take to get you to drop Microsoft as a partner?
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andall Nerison is one of those very loyal partners. The sole proprietor of Computer and Internet Solutions in Danville, Calif., Nerison got into the IT industry five years ago, after a broken neck suffered in a car accident forced him to give up physical labor. He's been a member of the Microsoft Partner Program for two years and, as a one-man shop, is especially fond of the no-charge Registered Member level implemented in 2004. "That's fantastic; I like that a lot," he says. "Since I became a Microsoft Partner, the tools that are at my disposal have really helped me lock down some good, solid clients."

The ability to call Microsoft support in mission-critical situations at no charge is something he can tout as a $250 benefit to clients, vs. calling support on their own. And Microsoft Action Packs give him access to the "latest and greatest" software for just $295 per year.

Nerison is one of 78 percent of survey respondents who say they see a good future in being a Microsoft Partner. "I'm very excited for all the new products coming out and, being a partner, being in the know for best practices. It's going to poise my company for expansion," he says, noting he's now looking to hire another Microsoft Certified Professional to handle small office implementations. "My long-term plan is to do as much remote administration as possible from the beaches of Hawaii."

Brian Bourne, president of Toronto-based CMS Consulting Inc., is equally loyal and happy for reasons that include the level of communication he has with Microsoft, especially since becoming a Gold Certified Partner a few years ago. Prior to that, communication was mostly via e-mail. Now, he meets regularly with a partner account manager (PAM) who helps him get the most out of the program. Additionally, he says Microsoft these days is doing a "significantly better job at getting consistent messaging out" than in years past.

Is Anyone Listening?
But does Microsoft also listen to its partners? Bourne is one of 57 percent of respondents who say it does. One example is when he was selected as one of about 25 partners worldwide to provide input to the Microsoft Internet Security and Acceleration (ISA) Server team on what features should and shouldn't be included in the Enterprise Edition. "They definitely took the feedback of that group and applied it to the product," he says. More recently, he participated in a roundtable discussion with David Hemler, president of Microsoft Canada, who was looking for partner input on various topics.

Nearly a third of respondents, however, say they don't know whether Microsoft listens to partners—presumably because they haven't had any first-hand experience by which to judge. Another 11 percent say Microsoft does not listen.

Still, just over half of all respondents are quite happy with the level of communication they have with Microsoft representatives, rating it either 4 or 5 on the 5-point scale; 82 percent fall at 3 or above (see Figure 3). But anecdotal evidence suggests Microsoft still has work to do on the communication front.

Figure 3. How satisfied are you with the level of communications you have with Microsoft representatives?

Consider Matt Richardson, manager of information technology and services for Information Control Corp. (ICC), a Certified Partner in Columbus, Ohio. ICC is a sizeable company; it has 350 employees and takes in about $32 million annually. But Richardson says communication with Microsoft is "sporadic." For a time, he routinely received calls alerting him to forthcoming events and the like. But he was unable to attend much of anything for about eight months during a significant office expansion. "Now they don't call me anymore, or let me know what's going on," he says. "I'm not sure if it's because I didn't sign up for anything" during that eight-month period.

On the other hand, he says, he did get a call from Microsoft recently for a matter that pertained more to developers than to him. "It was good information," he says, even if it came to the wrong guy. Which points to a problem Microsoft faces—how to target the most appropriate person within a given partner firm. Is it Microsoft's responsibility to find the most appropriate contacts within each partner firm, or is it up to the partner to disseminate information within the organization? No matter which way you come down on the question, it's easy to see how communication can—and does—break down.

Questioning Competencies
Partners had a similar response to a question pertaining to one of the biggest changes implemented to the Partner Program last year: the Microsoft Competency program, which is intended to encourage partners to specialize in certain areas, such as Information Worker or Network Infrastructure. Just over half of all respondents (53 percent) rated the competency program as either important or extremely important in helping partners differentiate themselves. Only 13 percent were at the bottom of the scale, rating it as not at all or not very important (see Figure 4).

Figure 4. How important is the Microsoft Competency program?

Lehrman of Xerox Global Services says the competency program is "a good thing," but notes it forces partners to invest more into the program than in the past. "That's not an unreasonable thing to ask," he says, "but not all organizations are structured in a way that they can immediately respond."

Xerox Global Services was grandfathered into the Information Worker competency a year ago, but won't be this year. That's a problem, because it hasn't been focusing on maintaining the customer references and various other items it needs to maintain its Gold status. "It's not necessarily our fault or Microsoft's; it just happened, fell through the cracks," he says. "Now we have to kind of rush and get through to maintain that status, and it's a bit of a challenge for us because we're very busy." As numerous partners point out, time spent gathering case studies and the like is time lost in terms of generating revenue.

While he understands Microsoft wanting to demand an investment from partners in return for that Gold status, Lehrman questions whether it really resonates with customers. "Is it a medal that has meaning out there? It sounds good, but whether it's gotten us more business, I don't know."

Methodology
Via e-mail, we invited 24,000 active and inactive subscribers to Redmond magazine (a sister publication to Redmond Channel Partner) to complete our Web-based survey. The subscribers had all previously said on qualification forms that they worked for a Microsoft Partner company. The survey was conducted from May 24 to June 3. We received 564 completed questionnaires from qualified respondents, who again said they worked for a Microsoft Partner company. Of those respondents, 19 percent said they worked for a Registered Member, 34 percent for a Certified Partner and 31 percent for a Gold Certified Partner (the rest were not sure).

Bourne does see value in his company's Gold Certified status, but says some of it was removed because Microsoft grandfathered his company and others with the Security competency each of the last two years, obviating the need for them to show the usual 120 points required for Gold. He was especially irked at being grandfathered last year, even after he invested the time to gather the required points. "For a smaller company like ours, getting 120 points really requires a lot of work, all the case studies and surveys," he says. "It's not a burden, but it's a differentiator, which is why I consider it valuable."

All things considered, partners are reasonably happy—if not ecstatic—with the changes implemented to the Partner Program over the last couple of years (keeping in mind the survey was taken before the most recent round of changes were announced). Nearly half (48 percent) rate the changes at a 4 or 5, with 5 being "extremely positive." The single largest chunk—42 percent—were right in the middle, but only a handful rated the changes as either extremely negative (2 percent) or negative (7 percent).

Work Remains
Among the areas found lacking was ease of finding other partners with which to do business, which only 35 percent rated as much easier or easier compared to past years. That figure may bump up some now that Microsoft is enhancing its Partner Channel Builder Web-based tool, which helps partners find others with select competencies (see "6 Essential Microsoft Partner Tools" ).

Partners are also split on whether Microsoft channel executives are accessible enough. Only 25 percent of respondents say they are, while another 25 percent don't know, and 33 percent have no opinion. Apparently lots of partners simply don't have occasion to try to contact Microsoft channel executives, which could be construed as meaning the PAMs are doing an effective job in their Microsoft liaison role. Registered Members, of course, don't have the luxury of a PAM, but their responses weren't all that much different from Certified and Gold Partners, with 27 percent of them saying executives are accessible enough.

But there are partners who say accessibility of key personnel could be better. K. Curtis Brown, an architect with Unisys in New Haven, Conn., says early this year, he was trying to reach certain product leads and Microsoft Quick Fix Engineers (QFE) on an issue having to do with a large-scale deployment. Instead, he kept getting pushed to Microsoft Consulting Services (MCS). "QFEs are the guys who have a lot of information and know about issues for which Microsoft is implementing fixes," Brown says. "They're nice people to have in your Rolodex."

Another sore point among partners is licensing. Nearly half of all respondents (45 percent) say Microsoft licensing policies make its products difficult to sell and only 35 percent say the policies are fair. More than a quarter (27 percent) say the policies are unfair, while the rest either have no opinion or don't know (see Figure 5).

Figure 5. Microsoft Licensing Policies
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"We don't really hear a lot of complaints about Microsoft, except for licensing and pricing issues," Brown says. "When I talk to customers, that's the biggest question, ‘How much is this going to cost me?'"

Indeed, gripes about pricing and complicated licensing polices came in first and third, respectively, as the most frequent customer complaints that our respondents hear (see Figure 6).

Figure 6. What is the most frequent complaint you hear from customers?

Software Assurance is always a question mark, Brown notes, because customers aren't sure they're going to see upgrades within their three-year term, which is where they perceive its real value to be.

ICC's Richardson is a bit more pointed. A large part of his company's business is staff augmentation, which means his employees work side-by-side with customers every day. In so doing, they hear customer gripes and relay them to Richardson. "Everybody realized nothing happened after they bought Software Assurance," he says. "They all realized it was an enormous waste of money."

Security Questions Linger
Sandwiched in between cost and licensing is security, cited by 28 percent of respondents as the top customer complaint. Our survey points to a perception problem with respect to security. First, nearly all partners (88 percent) rate today's security problems as either serious or extremely serious, and just over half think Microsoft bears a great deal of responsibility for those problems (see Figure 8). A slightly larger percentage (54 percent) rate Microsoft's response as either effective or extremely effective. But partners don't think their customers are as satisfied. Only 41 percent think their customers are largely satisfied with the job Microsoft is doing in addressing security.

Figure 8. Multiple Questions
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Windows XP SP2 is a case in point, according to Richardson. "SP2 was extremely good at securing the operating system, but also extremely good at debilitating it and slowing it way down," he says. In his own small office, he had to spend about $15,000 on hardware upgrades, mostly RAM, for computers that were running SP2 along with Office 2003, he says.

Others say the security picture is skewed because the media tends to blow problems out of proportion. "I think Microsoft is doing at a minimum as good, if not significantly better, than the other vendors, from a vulnerability count standpoint," says Bourne of CMS Consulting.

Lehrman agrees with that assessment. Microsoft now makes security a primary consideration in product development and in how it deals with partners, he says, noting partner training now focuses on security more so than in the past. "I think Microsoft has put a great deal of effort in addressing the issue from a substance and public relations point of view," Lehrman says. "It's more of a PR issue than a technical one."

A more serious threat to Microsoft's business, he says, is Linux. He's not alone in that assessment, as one-quarter of respondents rated Linux as Microsoft's biggest threat (see Figure 7).

Figure 7. What is the biggest threat to Microsoft's business?
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Lehrman favors an "embrace and extend" policy. "Since day one, I've thought Microsoft should buy a Linux distribution and make it its own, and make Office run on Linux," he says. "That would be a great way to just end this whole mess."

Richardson likewise thinks open source software is the biggest threat to Microsoft. Today, he says, open source is "useable, but it's difficult to do anything standardized because there are so many flavors. If anyone can get all the pieces under one roof, that'd be the biggest threat." Even companies like Red Hat have thus far not succeeded in that effort, he says, because they offer too many choices.

Other top threats to Microsoft include its own installed base (22 percent) and software piracy (19 percent). Google, on the other hand, received only one write-in vote. (Admittedly, we didn't put it on the list of options for respondents to select from, a decision we don't regret.)

In general, though, most partners are happy with the Partner Program, perhaps none more so than Virginia Cox, vice president of client relations for The Lyndon Group, an independent consulting firm in Newport Beach, Calif., that Cox founded in 1992. The company now has 11 employees and is a Certified Partner. She appreciates the technical support assistance the program affords her, along with inexpensive access to software.

"For a very small amount of money, I gained a lot of knowledge from the back and forth with Microsoft's staff," she says. "The investments I've had to put in, I've gotten back four-fold."

More Information

Access the expanded PDF version of the survey here.