In-Depth

Partner Paychecks

In Redmond Channel Partner's first-ever salary survey, we look at how much you're getting paid -- and are paying yourselves -- and answer some questions you might have been afraid to ask.

Even in this era of "corporate transparency," with bloggers divulging secrets from deep within office cubicle farms and the cover of Wired magazine urging companies to "Get Naked and Rule the World," it's still the one question you probably won't ask your colleagues and surely won't ask your boss: How much money do you make?

Talking salary at the office is one of our last great societal taboos.

Lots of other stuff -- even personal information -- that would have waited for happy hour 20 years ago routinely comes out in front of colleagues at work these days. But ask those same colleagues how much money they're taking home, and you're likely to encounter cringing and some awkward babbling in response.

That's why Redmond Channel Partner decided to conduct what we believe to be the first-ever salary survey specific to the Microsoft partner community. We can't tell you what the person in the next cubicle or in the corner office makes, but -- based on more than 600 detailed responses -- we can give you some idea how you stack up to your colleagues in the channel.

Given how many of you are entrepreneurs, we can give you a hint as to whether it was worth it to leave your job and launch your own business -- or, if you haven't started your own company, whether you might be better off financially if you ditch your corporate job and go out on your own (see "Lower Wages, Bigger Payoff ... Maybe"). Along those same lines, we'll also provide a peek at your colleagues' consulting rates (see "Consulting Fees: A Moving Target," in the extended PDF-formatted version of this survey available in the Tech Library).

A Snapshot of the 'Typical' Partner
Average Salary by Where Partners Work
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Salary by Region
Areas worked
Average Salary by
Role/Title/Focus
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Average Salary by Role
2007 Average Salary/Percentage by Job Title
2007 Average Partner Salary by Horizontal Focus
Comparisons, Raises, Bonuses, Rates, Years
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How Do You Think Your Pay compares with Your Peers' Pay (with average salary)
2007 Partner Salary Raises, Bonuses, Rates
How Partner Bonuses Are Calculated
Partner Salaries by Tenure
2007 Partner Salaries by Years in IT Industry
Salary by Partner
Level, Revenue, Vendor
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2007 Average Salary/Percentages by Levels in the Microsoft Partner Program
2007 Average Salary/Percentages of Length of Partnership with Microsoft
2007 Average Partner Salary by Organization's Annual Revenue
2007 Average Partner Salary by Type of Organization
2007 Average Partner Percentage/Salary Average by Importance of Microsoft to the Company
RCP Salary Survey Methodology
RCP conducted its salary survey from Feb. 27 to March 19, 2007. We promoted the survey via targeted e-mails, the Redmond Channel Partner Update e-mail newsletter and our Web site, RCPmag.com. We received 825 responses, of which 612 were eligible for inclusion.

We only accepted data from U.S. and Canadian respondents whose companies are active Microsoft partners. To that end, in addition to accepting responses from Registered Members, Certified Partners and Gold Certified Partners, we accepted answers from respondents who said that they or their companies partnered with Microsoft but were not formally part of the Microsoft Partner Program. Eliminated from our final numbers were answers from respondents who said that they or their companies did not partner with Microsoft at all.
-- L.P.
Note: Due to rounding, total percentages may not add up to 100.
Go to Tech Library and Get Free PDFDownload the complete 2007 RCP Salary Survey from the Tech Library.
So, who are you, the Microsoft partner, at least according to our survey? And, more importantly, how much money do you make? You'll find plenty of charts and graphs over the next few pages that answer those questions in lots of different ways, and you'll find that it's hard to draw a caricature of the "typical" partner. Nevertheless, here's a snapshot:

You're most likely to be a man in your early 40s, and you're probably either a Registered Member or a Gold Certified Partner in the Microsoft Partner Program. You make an average base salary of $85,275 per year-although, with the median salary figure coming in at $77,500, you're actually doing better than most of your colleagues if you're pulling in that average salary.

Average and Media Salary

Chances are that you reside in a major metropolitan area in the partner program's East or Central regions, although you're probably earning more money if you're out West. Your company is best described by the term "consultancy" or "systems integrator," and you probably work full-time as either an engineer making about $77,000 per year, or a manager-but not a business owner-pulling in almost $87,700 per year.

You've been with your current employer for between five and nine years, but you've been in the industry longer-typically between 10 and 14 years. (In both cases, you're making in the low 80s-just under our overall average-for an annual base salary.) Your employer is a midsize business, with fewer than $5 million in annual revenues. Your current company doesn't have a particular vertical specialization.

You've had a raise of almost 5 percent in your base salary in the past year, and you're expecting almost $9,000 in bonuses over the next year. Stock options account for about 13 percent of your total compensation package.

Perceptions Challenged, Questions Answered
Our survey turned up another interesting little nugget. More than half of you believe that your salary is lower than those of others in the field-and, given that respondents who think that their salaries are lower than others' make $72,405 on average, you're probably right. Only 15 percent of you think that you make more than your colleagues, and those who answered that way do, averaging $115,661 per year. If you're among the 30 percent of respondents, though, who believe that your salary is about the same as everybody else's, you're doing better than you think, pulling in a healthy $93,837 per year.

It's just those kinds of questions that we set out to answer in RCP's first salary survey. Check back in 2008 for a year-to-year comparison. Meanwhile, if you've been wondering how your compensation package stacks up against those of your colleagues but were afraid to ask-well, now you know.

Lower Wages, Bigger Payoff ... Maybe

Jim Freeman knows that it doesn't always pay to be the boss. The principal and co-founder of Englewood, Colo.-based Attain Technologies Inc., a Gold Certified Partner, isn't the highest-paid person in his company. In fact, he's not even close.

"The hard part is having a third of my employees make more money than I do," Freeman says.

"You have to kind of leave your ego at the door."

Scott Minor, vice president of sales and marketing and a minority owner of Prime Technology Group Inc., a Certified Partner based in King of Prussia, Pa., understands exactly what Freeman is saying.

"It's very awkward; it's frustrating," Minor says of earning less money than some of his employees. "You bring on a sales guy, and he's going to make a base of [$110,000]." With incentives, that same salesperson can make upward of $250,000. As an executive/co-owner, Minor says, "you're not going to be getting that."

Freeman and Minor represent an important minority in this year's salary survey: business owners or co-owners who aren't sole proprietors and who have to find a way to pay both employees and themselves. Just less than 20 percent of survey respondents fit into that category-one that could grow if some of the nearly 62 percent of respondents currently working full time for partner companies walk away to do their own thing.

Our survey found that, on average, business owners and co-owners are doing better financially than their corporate or sole-proprietor counterparts. Business owners, who represent a little more than 10 percent of respondents, reported making an average of $106,103 per year. And co-owners checked in at $95,026 on average, besting full-time workers by nearly $12,000 per year and self-employed respondents by almost $15,000 per year. But, of course, starting a business offers no guarantee of a pay raise.

Both Freeman and Minor have formulas for calculating how much they pay themselves. Freeman, along with two other co-owners who also serve as principals, hasn't had a raise in base salary in four years. He says that, each fiscal year, he and his colleagues in ownership pocket what's left over from retained earnings after subtracting taxes and distributed capital investments. But with employee headcount set to increase from 30 to around 40 this year, those investments can take a chunk out of his take-home pay, he says.

Freeman, 44, left a lucrative position with a large company in 2000 and started Attain in 2001. Now six years into its existence, Attain is a fast-growing business pulling in $5 million to $10 million in annual revenue. But Freeman still isn't earning as much as he did in his previous job.

"I'm making exactly 40 percent of what I was making when I left the corporate confines," he says. "When we started the company, we adjusted our lifestyles accordingly. We understood that this was more of an investment than it was a lifestyle issue."

Minor's company is also growing quickly, from $5 million in revenue last year to $12 million this year and a projected $25 million in 2008. He and three other owners-two of whom are majority owners-run the company with no outside funding sources, a strategy that he says allows them to run Prime as they see fit, but that doesn't always leave much for their own take-home pay.

"If we brought in outside money, we'd be able to take a more market-rate salary," the 42-year-old Minor says. "Fundamentally you've got some very hard choices to make. If you don't have [an outside] 'Big Brother' hand, you have the financial means to make decisions."

One decision that Freeman and Minor have both made is taking home smaller salaries now in hopes of making windfalls later, when their companies potentially either sell or go through mergers.

"We look at ... the equity that sits in our business," Freeman says. "It's grown [from] tens of thousands of dollars to what conceivably could be a few million dollars for my piece of it. At that point, you're looking for a multi-million-dollar payoff."
-- L.P.