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Channel News: On the Forefront of New Business

When it comes to the future of its security-products business, Microsoft clearly wants its partners to feel-well, secure.

To that end, the company has launched a series of initiatives intended to "aid channel partners in designing effective, profitable business models while working with their customers to stay on top of the ever-changing security landscape." Translated: Microsoft wants to help partners woo customers with solutions based on Microsoft security products, especially its Forefront business-security line. Incentives include:

The revised Security Solutions Competency: Microsoft merged this competency's two existing specialty areas-Secure Management and Secure Infrastructure-into a single specialization. The company says the new combined specialization, which carries the "Secure Infrastructure" name, better reflects the current emphasis on an integrated approach to security. Microsoft also created a new Identity and Secure Access specialization within this competency to certify partners' skills in access control and user-identity management.

The extended Security Software Advisor Program: Microsoft launched this program in mid-2007 to stimulate recommendations for Forefront deployments. It offers partners "advisor fees" of up to 30 percent of the estimated retail price that their customers pay for Forefront products. (Microsoft says the actual average payout for 2007 was 23 percent of the estimated retail price.) Initially limited to partners with Security Solutions competencies, the program is now available to partners that have the Advanced Infrastructure and Network Infrastructure competencies or the Portals & Collaboration specialization in the Information Worker competency. In addition, it's offering up to an additional 10 percent in advisor fees through July 31.

Two security-product promotions: The first allows partners to offer customers a 25 percent discount off the per-user and per-device monthly subscription price for Forefront Client Security and the monthly subscription price for Forefront Client Security Management Console. The second lets partners offer a 35 percent discount off the list price of monthly subscriptions for Forefront Client Security together with standalone server licenses for System Center Configuration Manager 2007 or Systems Management Server 2003. Both promotions are targeted to customers who are either renewing or signing new volume licensing agreements, and both are scheduled to run through July 31.

Bolstering Microsoft's efforts are the results of a study that the software giant commissioned from research firm IDC. Based on IDC's survey of 349 resellers in the United States and the United Kingdom, the study indicates that partners selling Microsoft security products are often more profitable than counterparts selling other vendors' security products.

The study, "Microsoft Security Solutions: Partner Pathway to Business Performance," indicates partner companies that have either earned the Security Solutions Competency or qualified for the Security Software Advisor program outrank the other survey participants in 12 of 15 areas. Specifically, researchers found that Microsoft security partners reported:

  • Profit margins that were, on average, five percentage points higher than those of the benchmark companies.
  • Overall revenue growth more than three times that of the benchmark companies, with customer growth nearly four times higher and the growth in the number of deals nearly five times higher.
  • Per-employee revenue growth of $45,000 more per employee than that of the benchmark companies and lower employee turnover rates (3 percent as compared with 9 percent).
  • A services-to-product-resale ratio nearly double that of the benchmark companies. Microsoft partners earn nearly $6 in services revenue for every $1 of product resale; they also charge an average of 23 percent more per day for those services.

IDC's report said Microsoft partners outperformed the other companies because Microsoft partners hire and retain qualified technical personnel, specialize in vertical markets or technologies, use employees cost-effectively, focus on deep customer relationships and leverage partner program resources.

About the Author

Anne Stuart, the former executive editor of Redmond Channel Partner, is a business technology freelance writer based in Boston, Mass.