Making the Grade
In 2003, Microsoft announced a sweeping, risky overhaul of its partner
program. Three years later, many partners give the changes passing marks.
- By Rich Freeman
- July 01, 2006
Tim Huckaby remembers the mood among his fellow Microsoft partners back
in October 2003—and it wasn't good. "Most of the partners were kind of
panicked," says Huckaby, CEO of InterKnowlogy LLC, a Microsoft Gold Certified
Partner and provider of custom application development and network services
based in Carlsbad, Calif.
That alarm stemmed from the first Worldwide Partner Conference, held
that autumn in New Orleans, where Microsoft executives unveiled plans
to completely revamp the company's partner relationships. For years, Microsoft
had maintained separate offerings for solution providers, business solution
resellers, training centers and other channel segments; each program had
its own, often loosely defined system of regulations and benefits. But,
partners learned at the event, Microsoft would offer one big program covering
Microsoft's entire channel, effective in January 2004.
There were other changes as well. To earn Certified or Gold Certified
status, partners would have to rack up "partner points" by, for example,
submitting customer references and earning technical certifications. Partners
with expertise in specific disciplines could showcase their capabilities
by qualifying for competencies in fields such as networking infrastructure
and data management. Meanwhile, a new Registered Member level, free of
annual fees and prerequisites, would be made available to anyone willing
to submit a brief profile and endorse a simple agreement.
To smooth the transition, Microsoft grandfathered partners in at their
current levels, giving them until their 2006 re-enrollment dates to actually
meet the requirements for Certified and Gold Certified status. Just the
same, recalls Huckaby, lots of partners had the jitters. Take those new
competencies, for instance. "Say you were bragging you had a big practice
worker [solutions]," says Huckaby. "Suddenly you had to prove it."
There must have been sweaty palms back in Redmond as well. Microsoft's
channel produces 96 percent of the company's revenue. Tinkering with an
asset that valuable is always risky. Would partners bridle at the slew
of new rules and requirements? Could the its solution-oriented Dynamics
partners co-exist peacefully under one roof with its volume-oriented "classic"
Fast forward to 2006, when the mood is distinctly different. Three years
after the launch of the new Microsoft Partner Program (MSPP), members
generally give it a thumbs-up. Most partners have complaints and concerns,
and some voice their opinions with something closer to contentment than
delight. But Huckaby sums it up for many with this assessment: "So far,
it's worked pretty damn well, " he says. "It's not perfect by any means,
but all in all, it's been a great thing for the partner community."
the Report Card
If partners were to issue a report card on the Microsoft
Partner Program, here's how their grading might look:
Registered Member: Judging by the
280,000 firms that have signed on as Registered
Members to date, the benefits of this entry-level
MSPP tier far outweigh the low (as in non-existent,
so far as fees are concerned) costs.
Big Program: Herding all its partners
under one tent has helped Microsoft nurture
a culture of partners helping partners. But
whether one program can successfully house
both Dynamics partners and "classic" partners
remains an open question.
Partners who have earned competencies call
them a great differentiation mechanism. Partners
who haven't are often unwilling or unable
to spare the resources necessary to earn them.
Points: Partners hail the point system
for replacing arbitrary performance assessments
with uniform standards. But they also criticize
the system's complicated rules and awkward
One Big Umbrella
According to analyst Paul DeGroot of Directions on Microsoft, the
Kirkland, Wash.-based research firm, Microsoft had no shortage of reasons
for overhauling its previous partner offerings. First, many partners found
the sheer number of programs bewildering. In addition to the Certified
Partner program, the company's biggest, Microsoft maintained dozens of
other, sometimes tiny, programs, which often had vague or overlapping
missions. "There were literally partner programs that had exactly one
partner in them," recalls DeGroot. Additionally, he says, rules were sometimes
poorly defined and benefits inconsistently delivered: "You had situations
where one partner would look at another partner who had announced some
kind of special deal and [the first partner is] wondering, 'How do I do
Information overload was also a problem with partners complaining that
they were drowning in partner program e-mail, much of it irrelevant. Meanwhile,
for thousands of potential partners that were either unable to meet program
requirements or unwilling to pay membership fees, the problem wasn't too
much contact but too little. Such companies had no formal way to engage
The new MSPP was a direct assault on these problems. To make partnering
with Microsoft less confusing—as well as to promote cross-channel teamwork—there
would be a single, integrated program for everyone, company executives
explained. Partner points would provide a clear, uniform basis for measuring
achievement and doling out rewards. Competencies would help Microsoft
deliver more targeted information to partners, while simultaneously helping
them highlight their skills. And the new Registered Member tier would
give even the smallest companies a way to partner with Microsoft.
Now, nearly three years later, many partners say the MSPP's structural
reforms have worked out pretty well. For example, bringing Microsoft's
entire channel under one umbrella has unexpectedly spurred a sharp rise
in cross-partner collaboration. "We're talking with more partners about
more and different things, and from those conversations are coming more
opportunities that we weren't seeing before," says Todd Shelton, president
of Netdesk Corp., a Seattle-based Gold Certified Partner specializing
in learning solutions. Same goes for Infinity Info Systems Corp., a Gold
Certified Dynamics CRM reseller based in New York City. Infinity now regularly
shares leads and projects with other firms. "It's a win-win for everybody,"
says Yacov Wrocherinsky, the company's CEO. Like Shelton and many others,
Wrocherinsky gives his partner account manager (PAM) credit for introducing
his company to firms with complementary skills and encouraging them to
Meanwhile, many Dynamics VARs who worried that joining Microsoft's vast
army of other partners would erode their close-knit community say their
fears have so far been unfounded. "Actually, Microsoft has gone out of
their way to keep that culture intact," says Ed Cowen, president, CEO
and sole employee of TTD Enterprises LLC, a Dynamics GP (formerly Great
Plains) reseller and Registered Member based in Schaumburg, Ill. Microsoft,
Cowen notes, continues to stage events such as the Dynamics GP Technical
Airlift in Fargo, N. D., which he attended in April. The experience, he
says, was exactly like attending a Great Plains conference back in the
days before Microsoft acquired the company: "[There were] 600 of us from
all over the world, and all we did was talk about what's going on with
However, DeGroot cautions that the jury is still out on how comfortable
Dynamics partners will ultimately be in the MSPP. Microsoft, which has
historically favored mass sales of individual products, has yet to fully
embrace the Dynamics channel's hands-on, solution-selling model (for more
on the Dynamics initiative, see "Getting
Serious About ERP," June 2006). "We're seeing this type of wrestling
going on where [Dynamics] is supposed to be a narrow, specialized channel
or a broad, horizontal channel," says DeGroot. He warns that Dynamics
partners won't be pleased if Microsoft goes the horizontal route: "It
could lose a lot of those partners if it erases the difference between
[Dynamics] partners and the general run of the partner program," he says.
A Lot of Benefits
Erasing differences is exactly the opposite of what Microsoft is
attempting with its competency framework, which helps partners promote
their distinguishing strengths. Huckaby remembers thinking when he first
heard about competency requirements that, finally, Microsoft was offering
partners a way to differentiate themselves.
Without some kind of categorization, Microsoft has too many partners
for its local offices to keep straight, Huckaby argues. Grouping firms
by specialization enables salespeople to more easily zero in on the right
partner for a given opportunity. In InterKnowlogy's case, at least, the
upshot has been more leads. "Doing the work isn't the hard part," says
Huckaby. "Getting the work is the hard part. One way we get the work is
by that legion of Microsoft employee s recommending us." Thanks to competencies,
he adds, "that's dramatically better than it was three or four years ago."
Even so, convincing partners to invest time in qualifying for competencies
remains an ongoing challenge for Microsoft. For example, Tim Donaldson,
director of marketing at Gold Certified Partner ICONICS Inc., a Foxboro,
Mass.-based provider of visualization software for manufacturers, sees
strong value in competencies. But time and resource constraints have kept
ICONICS from earning more than one, in ISV/Software Solutions, to date.
"We look at that as more opportunity for us," says Donaldson.
By contrast, recruiting Registered Members hasn't posed much of a challenge
for Microsoft. DeGroot remembers a Microsoft Partner Program spokesperson
telling him in 2003 that the company hoped to attract 100,000 Registered
Members. Today, according to Sherle Webb-Robins, general manager of the
Microsoft Partner Program, there are a whopping 280,000. "What we're seeing
is huge, huge [numbers of] partners coming into the Registered level,"
she says. "They're really liking it because it's more tailored to how
they serve small-business customers."
The Pros and Cons of Points
Partners offer somewhat more guarded praise of the MSPP's new point
system. On the plus side, they say, partner points have added consistency
to a channel landscape that once sorely lacked it. In the past, says Huckaby,
Gold Certified status "was a very arbitrary thing that someone at a district
level would just anoint you with. The new system actually has metrics
around these different levels of partnership." Netdesk's Shelton agrees.
"The point system makes it practical to organize the investments that
different partners make in a rational way," he says. "To that extent,
I think it makes a lot of sense."
Still , many partners concur with Ronni Schorr, vice president of marketing
and strategic alliances at InfoGenesis, a Gold Certified Partner and hospitality
industry ISV headquartered in Santa Barbara, Calif. She calls the point
system an effective way to measure partner achievement, but adds: "It
makes things a little more difficult sometimes." Many MSPP members say
that gathering and submitting proof of their latest achievements can be
a time-consuming chore. And some partners question the valuations Microsoft
places on those accomplishments. "Some points weigh a little more heavily
than they should and maybe vice versa," says Huckaby, who would like to
see fewer points awarded for technical certifications and more points
granted for influencing a volume licensing purchase.
Partners contacted for this article named a variety
of channel priorities that they'd like to see Microsoft
focus on in the future. Here are just a few:
Take the field to partner school. Ronni Schorr,
of InfoGenesis, says she spends too much time educating
Microsoft's field salespeople about what her firm does.
She argues that Microsoft's partner program team should
share more of that burden: "I'd like to see them strengthen
that and have [field staff] be more aware of what partners
bring to the table."
Think nationally. In the United States, every
Microsoft sales office picks its own partners. Rafael
Costa, of Vis.align, wishes there was more uniformity
across districts. "Microsoft would benefit from more
of a national level of support for specific solutions,
"because the districts still spend quite a bit of time
sorting through who are the right partners for this
or that," he says.
Better yet, think globally. Tim Donaldson, of
ICONICS, says that because his company's U.S. branch
is Gold Certified, its overseas offices should enjoy
Gold privileges too. "But they can't get that same level
of support," he complains. That's a disconnect Donaldson
would like to see Microsoft correct. — R.F.
Huckaby is careful to characterize such concerns as minor. But Darren
Bibby, senior analyst for software sales channels at IDC, the Framingham,
Mass.-based IT research firm, wonders whether dissatisfaction with the
point system will become more widespread now that Microsoft's two-year
grace period for fulfilling Certified and Gold Certified requirements
has expired. "There might be frustration, because some partners may not
be able to get to that Certified level any more," he says.
Assessing the Impact
The point system isn't the new partner program's only source of
gripes. Many partners complain that the program's rules are too complex.
"In terms of doing the work to understand how the partner program works,
there are more moving parts these days," says Shelton, of Netdesk. Online
tools are another common sore point. The first version of the MSPP's enrollment
tool proved so unpopular, in fact, that Microsoft was forced to replace
it less than a year after its debut.
Meanwhile, though Microsoft hoped that competencies would help it target
communications more precisely, few partners have noticed a significant
drop in the number of e-mails they're receiving. Donaldson, of ICONICS,
receives about 20 a week. "And I'll be honest with you," he says. "I probably
read one or two of them." Wrocherinsky, of Infinity Info Systems, gets
more like 50 messages from Microsoft weekly—and says the number used to
be even higher. The danger of such an e-mail avalanche, many partners
say, is that security alerts and other critical messages may well get
lost in the shuffle.
Still, despite such grievances, most partners feel they're getting more
back from the MSPP than they're putting into it. Can Microsoft say the
same? "That's an important question," notes DeGroot. "In many respects,
I'm very impressed with the Partner Program. The question is, what actually
has been the impact on the company's sales?" Not much, DeGroot suspects.
"It's helped them, [but] it's not clear that the company's top-line revenue
has been dramatically expanded," he says.
For her part, Webb-Robins says that the MSPP's pay-off for Microsoft
has been substantial: "Our partner satisfaction has been going up, our
customer satisfaction has been going up, and also Microsoft's revenue
is still growing." All three trends, she maintains, can be at least partly
attributed to Microsoft's new and improved channel program.
Rafael Costa, executive vice president for marketing at Vis.align, a
Microsoft Gold Certified Partner and solution provider headquartered in
King of Prussia, Pa., has no special insight into Microsoft's revenue
or customer approval ratings. But Costa, whose company serves the manufacturing,
wholesale distribution and consumer packaged-goods industries, can verify
that the MSPP has improved at leas t one Microsoft partner's satisfaction.
Vis.align has been partnering with Microsoft for four years, and "every
single year they have improved what the relationship gives to us," says
Costa. "I don't know if I'm the exception, but I'm very pleased with Microsoft
as a true partner."