Striking the Balance in Partnership
Recognizing those "whoa" moments and those "vive la différence" between you and other Microsoft partners that you work and/or compete with.
- By Paul DeGroot
- June 01, 2006
"Partner" can mean many things -- buddy, co-investor,
lover, co-conspirator among them -- but sooner or later most people
engaged in a partnership realize that the partners' agendas are
different. That can be a vive la différence moment or a "whoa"
In the tech world, where alliances, dalliances, competition, cooperation
and their variations are the rule, it's worthwhile to start
out with a clear view of who is after what in a partnership, and
to revisit that arrangement from time to time.
A large vendor like Microsoft, with a broad portfolio of horizontal
applications, wants to make partner channels as broad as possible.
Partners, on the other hand, prefer a narrow channel and exclusive
territories and sales leads, to maximize the returns for their sales
efforts. However, the optimal balance between a narrow channel and
a broad one can't be decided by a simple formula, because
the optimal choice for Microsoft will be different from the optimal
choice for partners.
Before it introduced its new Partner Program a few years ago, for
example, Microsoft had about 35,000 Certified and Gold Certified
Partners in its Certified Partner Program.
When it revised the Partner Program, with a clear aim to broaden
the partner channel, it created the no-fee Registered Member level.
Now it has more than 330,000 partners, most of them in that entry-level
Registered Member tier.
That's a "whoa!" moment for partners if I ever saw one.
At the same time, Microsoft maintained some substantial requirements
for participation at the higher levels of the program. Competencies,
Partner Points, customer references and other requirements are more
rigorous and broader than previously required. Furthermore, many
of them are annual: You need to come up with new customer references
every year to maintain your level.
The combination -- stringent program requirements and a larger
number of potential competitors -- starts to look bad for long-time
partners. Except, as it turns out, Microsoft may have come pretty
close to achieving that optimal balance between lots of partners
and partner profitability. Look at recent numbers for the Microsoft
Partner Program: In July 2005 (at last year's Worldwide Partner
Conference), Redmond listed 4,600 Gold Certified Partners, 28,000
Certified Partners, and 266,000 Registered Members. As of mid-April,
2006, it had 6,997 Gold Certified Partners (up 52 percent), 23,287
Certified Partners (down 17 percent) and 310,430 Registered Members
(up 16 percent).
Impressively, the highest -- and hardest -- partner level
is seeing the greatest growth. That says those partners are seeing
real value in the program. Even though their numbers are growing,
the rewards they're getting from partnership also appear to
be growing. For example, Gold Certified Partners get better visibility
in Microsoft marketing programs and are more likely to show up first
when customers query Solution Finder, a database that customers
use to find a Microsoft partner.
Certified Partner numbers have gone down, but that may not be serious.
Many of those partners are moving up to the Gold Certified Partner
ranks, exactly what Microsoft wants to see. For another, if they
don't requalify in 2006 as Certified Partners, they don't
drop off the partner radar -- they merely become Registered Members,
and when they check the Partner Membership Center they'll
see that they're probably just a few customer references or
a certification away from getting back to the Certified Partner
The Certified Partner level may prove to be a fast-changing intermediate
stage for partners, as they improve their qualifications and earn
Gold Certified Partner status, or their priorities change and they
reduce their commitment. For example, Microsoft says more than 5,000
Registered Members have moved into the Certified Partner level in
the last year.
Overall, it's an impressive performance. It suggests that,
in spite of their different agendas, both Microsoft and its partners
may have an occasion to say vive la différence.
Paul DeGroot is principle consultant with Pica Communications, which provides consulting services for customers with complex Microsoft licensing issues.