Directions

You're in Charge, So Charge

Partners should take advantage of Microsoft's highly rated partner program.

You know you've arrived when you start to turn up as a prize in a contest. Integrators, resellers, developers and other denizens of the partner world might be justified in feeling that way when they consider how hard major vendors are working to earn their allegiance.

I'm most familiar with the Microsoft Partner Program, but a recent analysis by Framingham, Mass.-based research firm IDC (available from Microsoft's partner Web site) shows that Microsoft isn't the only company courting partners these days.

IBM is improving its deal registration system so that integrators can get credit for influencing sales. A new version of Oracle's E-Business Suite is aimed at small and midsize business customers and is reserved for channel sales only. SAP, not famous for broad partner channels, last year launched PartnerEdge, a serious effort to engage midsize partners who could help SAP break out of its enterprise ghetto. The report also highlights renewed channel and partner efforts from BEA, CA, Intuit, Novell, Progress, Sun and Sybase.

A statistic at the end of the report demonstrates why partners are getting all this attention. IDC counts industry revenue from indirect (e.g., partner-based) sales in 2004 at nearly $50 billion, up from $35 billion the year before. That's a whopping chunk of new revenue driven by partners in one year.

IDC gives highest marks to Microsoft's program. It's a well-deserved honor and one that is all the more remarkable because the company's culture has not always been partner-friendly.

Microsoft isn’t the only company courting partners these days.

Microsoft grew up in an ultra-competitive environment, in which partners played only a minor role, primarily as builders of desktop applications that ran atop Microsoft OSes. Then the company got into the desktop applications business itself and many of those partners were history. Companies like Aldus (presentations), Ashton-Tate (desktop databases), Lotus (spreadsheets) and WordPerfect (word processing) once owned critical application categories. Today, only one survivor stands: Microsoft Office.

That Microsoft has emerged in recent years with one of the largest and most successful partner programs is a testament to how driven it is to succeed. It also shows the value of having really deep pockets when you need to experiment with changes to the fundamental structure of the business.

Ironically, Microsoft's efforts to court partners are driven in part by the need to fill the vacuum created by its own success on the desktop. Those competitors it overwhelmed were, at the end of the day, major Windows ISVs who created stuff that people bought Windows PCs for. With Microsoft blocking the door to desktop riches, savvy developers have turned to the Internet, which has become a much better market than traditional shrinkwrap, with its packaging and distribution overhead. The Internet is a global, fast-moving market with low barriers to entry and amazing revenue potential, so that even small and start-up companies can pose dangerous challenges to monopolists.

The core of the old Microsoft partner ecosystem used to be entrepreneurs who built the software that made Windows a must-buy. But the new core consists of corporate developers who use Visual Studio, niche ISVs and integrators who build complex systems by combining various pieces. They're a different breed than the software entrepreneurs of previous decades. The only part of Windows about which they care deeply is the browser, which has become the universal client, maintained for free by Microsoft.

As Microsoft places more emphasis on end-to-end solutions and selling the Microsoft stack -- which typically requires a partner who can put all the pieces together -- it's the integrator who really becomes the prime vendor, while the traditional software companies supply parts.

One lesson most of us learned early in life is that when you're driving, you have a lot of influence over where you go. Partners, even those in a program that is working well for them, know that major vendors' enthusiasm for partners ebbs and flows. So when the tide is going your way, it's best to keep paddling. In other words, take advantage of it by fully exploiting the benefits that are coming your way and even asking for more.

Companies that are Microsoft-only partners should tap the program's full offerings. Make sure you at least know what all the benefits are. And don't be afraid to ask for even more, from Microsoft and from other vendors. Your chances of being heard are better than they've ever been.

About the Author

Paul DeGroot is principle consultant with Pica Communications, which provides consulting services for customers with complex Microsoft licensing issues.