Microsoft Action Pack Overhaul: Q&A
Bob Marsh, an original architect of the Microsoft Action Pack, talks about the origins of the channel's most popular subscription program and the best and worst parts of the controversial recent revamp.
The recent launch of the new Microsoft Action Pack Subscription (MAPS) has stirred up the channel, with many Microsoft partners voicing complaints -- and very little praise. We thought this would be a good time to chat with Bob Marsh, one of the members of the team that created the original Action Pack program "back in the day," and get his read on the situation. Marsh is semi-retired in Arizona, and he's still actively involved in the International Association of Microsoft Channel Partners (IAMCP). He does occasional IT and marketing projects for Microsoft in Redmond, Wash.
Scott Bekker: Bob, thanks for taking some time for us. You were at Microsoft when MAPS was started. What was the channel situation back then -- and why offer channel players an Action Pack?
Bob Marsh: Scott, thanks for the opportunity. Yes, I joined Microsoft as a blue badge in 1998 -- I had been a development partner, an IT channel consultant and a contractor at Microsoft since 1989, and I came in from the cold to fix a problem I was having with Microsoft's channel marketing programs.
I had been part of a multi-practice consulting company for several years and had enjoyed having Solution Provider (SP) status and benefits -- like lots of free internal use software. When I broke away and hung out my own shingle as an independent consultant, I found I couldn't qualify for the SP program anymore. Microsoft required partners to have two Microsoft Certified Professionals (MCPs) on staff to be considered for an SP. I was a one-person shop, so I was out of the game.
I complained to the people running the SP program -- Paul Bazley, Mark Smith, Sam Jadallah -- and they challenged me to come to Redmond and work on fixing my problem, because if it was a problem for one person, it was probably a problem for others, too. Turns out it was a problem for more than 100,000 people in the channel.
How did you fix it?
That year, the SP program had more than 3,000 members -- companies that signed up and paid a fee for a bunch of program benefits -- and the most critical of those benefits was licensed copies of the latest versions of essentially all of Microsoft's software products, all with Not-For-Resale, or NFR, licenses. As a former SP myself, I knew this was the top benefit, and that's what I focused on first. This was the late 1990s -- the era of CDs -- so we designed the Action Pack to be like the SP program's monthly box, but we made it an annual subscription with quarterly updates. We designed the program so that channel players had to register on the Web site -- I think the first version of the site was on a server under Dave Waldrop's desk in Building 22 in Redmond. (Building 22 was known then as The Hotel California, because you could check out any time you want but you could never leave.) Dave and Cheryl Salazar did the Web site, and Deanna Trencher and I were on Richard Flynn's team -- we did the Action Pack. The purpose of the program included:
- Provide channel players NFR copies of all relevant software so they could use it internally in their companies or independent consultancies and get to know the products really well. They could use the software to integrate infrastructure and business solutions and demo them to their customers.
- Give channel players a place to register with Microsoft so we knew they existed and could communicate with them about their needs and also about new opportunities coming out of the product groups.
Fiachra O'Dea was the program's point person in Microsoft's manufacturing operations center. He put together the capability to build the MAPS deliverables from a table of SKU numbers we built. And it wasn't a trivial operation. MAPS quickly grew beyond 100,000 subscribers and had to be delivered in multiple languages around the world. We kept operations centers in the United States, Europe and Asia quite busy.
Who got to pick what went into the Action Pack?
Initially I did. I built relationships with the product groups and worked out what products were essential in the channel -- and which product groups wanted to push their products out through the channel. In those days, the product groups wanted to have the channel ready to move product when they did a new product or version launch, so we got to use the Action Pack to feed the channel early beta versions of new stuff well ahead of launches so they had months of hands-on experience with the new versions way before launch.
"Resource Centers are key to a unified Action Pack. They enable subscribers to zero in on stuff they need, based on their activity -- consulting services, hosting, app dev, device dev."
What else did your team do for these registered partners?
In 1999, we were getting ready to launch Windows 2000 Server, and it had a complicated new über-registry capability: Active Directory. Several partners had told us they didn't have time or the desire to take weeks of training to learn how to deploy and manage Active Directory. In the services provider world, time is literally money. Anything that takes a consultant offline must have killer ROI. Training, certification testing, seminars, conferences, sales spiffs -- those are all distractions that compete with billable time. We knew we had a real Active Directory speed bump to get over. We couldn't just put Windows 2000 Server in the Action Pack and expect partners to run with it.
I got with John Kelly, a contractor with EntireNet on the Windows Server team, and we came up with a hands-on training class that could get a geek up to speed on Active Directory and IntelliMirror in one three-hour session. I borrowed 100 ThinkPads from IBM -- we imaged them, put them in shipping containers, and we went literally around the world training people on Windows 2000 Server. We did classes in Boston, Denver, Johannesburg, Cape Town, Sydney, and then on the expo floor at a major trade show in Las Vegas, where our "Hands-On Labs" took over the whole Microsoft booth. We proved the training model, Active Directory was a big hit, and IBM's newest ThinkPads got exposed to more than 100,000 channel players.
So that was the beginning of Hands-On Labs?
Yup. Humble beginnings. My greatest joy in that initial Hands-On Labs tour was taking the tour to South Africa. We scheduled a week of labs in Johannesburg. I wanted to go there because South Africa had come out of the apartheid era and was now free to use and resell the latest technologies. They had skipped over the early PC era and had missed all the ugly stuff -- the stuff that was barely usable. Now we were launching Windows 2000 -- a set of server and desktop platforms that really worked well.
I used the Hands-On Labs to get almost every potential channel player in South Africa excited and ready to go to market with Windows 2000. We were so well-received in Johannesburg that the local Microsoft office rescheduled our tour and took us to Cape Town to train the south side of the country, as well. That one Hands-On Labs tour did energize the channel in South Africa and brought the productivity of modern Windows-based PCs to their customers.
Where did the Hands-On Labs go from there?
For the next several years, Jules Campeau and his team from Asentus in Vancouver did instructor-led Hands-On Labs for Microsoft all over North America, and other teams delivered them in Europe and Asia. Patrick Viernes and David Dunnington in the Partner Readiness team transformed them into online training, and Hands-On Labs Online became the standard for partner training for several years.
The secret of the Hands-On Labs was: Each student got a copy of the lab script, and that script was a fool-proof, step-by-step guide to setting up Active Directory. The partner could take that script and follow it exactly as written, every keystroke and mouse click, and do the job perfectly. The same training model worked for every other new product, too. And it was great for channel players to use for demos, too.
Was that the whole program? Action Pack software and Hands-On Labs training?
Not quite. Richard Flynn and I got with Tom Ford in the customer support operations center and created the first version of partner support so that registered partners could get help -- even escalated hand-holding help for serious "customer business down" scenarios. Lisa Thomassie, a founder of the Atlanta BackOffice User Group in the mid-1990s, helped run Partner Support for several years. Heroic effort.
Also, for a couple years, Jim Kraemer, Neil Kent and I produced dozens of packaged service offerings for registered partners -- we called them Project Guides. They were step-by-step guidance for how to get ready, go to market and deliver new solutions to your customers. We covered all the new stuff coming out of the product groups. Partners loved them.
The combination of a registered partner Web site, the Action Pack software, partner support, Project Guides and Hands-On Labs Online did a good job of enabling channel players to keep up with Microsoft and deliver high-value, innovative, cost-effective solutions to their customers.
What qualifications did people need to get these benefits?
Where the Solution Provider program went off in the direction of attempting to control or "manage" its members -- with certifications and "competencies" -- the Registered partner program was a pure channel enablement play. Someone once said, "If you can fog a mirror, you can join."
Did Microsoft charge registered partners for the Action Pack and Hands-On Labs?
Yes. We didn't have much marketing budget, so we had to charge enough to cover the costs of the program. Our ROI didn't matter. For the Action Pack, I think the initial price in the United States was $99 per year. That covered the manufacturing and shipping. I felt that a fair price was equivalent to one hour of a channel player's billable time. I think the price went up to $199 for several years. The recent release takes it up to $475. And MAPS is all electronic delivery now. For $475, I think they should at least get a T-shirt. Four-hundred-and-seventy-five dollars is three times to four times a typical consultant's billable hourly rate, and I think that's out of alignment with partner reality. I think the Hands-On Labs were initially $49 for the three-hour instructor-led class.
That's interesting you framed your pricing decisions in partners' bottom-line terms. Microsoft describes its pricing model now as charging approximately 1 percent of the total estimated value of the package. Do you think their methods have become too focused on internal Microsoft metrics, rather than thinking about metrics that are meaningful to partners?
I think Microsoft shouldn't try to make money on a channel-enablement program. The company should allocate a channel-enablement marketing budget based on how much each of the product groups wants to spend on channel development and channel enablement for their products. If it must make it a cost-recovery program like I did to cover MAPS localization, manufacturing and distribution costs, so be it. But channel enablement should never be a profit center.
"$475 is three times to four times a typical consultant's billable hourly rate, and I think that's out of alignment with partner reality."
After you left the program, MAPS evolved -- it eventually split into separate versions for developers and integrators. And the version launched recently merged those back into one.
At Microsoft, the pendulum keeps swinging. The new all-in-one version provides most of what most subscribers could want, and certainly more than any one typical small to midsize business (SMB)-focused subscriber could use. The risk there is that subscribers might feel like they're paying for stuff they'll never use. For example, if you're a developer shop, you'll need Visual Studio for dev and a stack of platform products for testing and demos. If you're a systems integrator, you'll never crank up Visual Studio. If your focus is large banks and insurance companies, MAPS doesn't fit your business. You'll have to work within your customers' IT departments and leverage their licenses to get hands-on experience. Or you could network with Microsoft Consulting Services (MCS) and get in on some gigs with them.
One thing that's radically different in this release is the concept of Resource Centers. Can you tell us what those are, how they work and what Microsoft's trying to do there?
Resource Centers are key to a unified Action Pack. They enable subscribers to zero in on stuff they need, based on their activity -- consulting services, hosting, app dev, device dev. They're a way of clustering content based on subscriber type.
The Professional Services Resource Center is key to IT consultants and services providers, of course. The Learning Paths continue to be an awesome resource for keeping ahead of the curve. With Microsoft, IBM and others pushing the cloud, cloud services Learning Paths are a potential goldmine. The Partner Support resources still include system-down support and phone-based advisory hours. Managed Services resources, really part of the Professional Services arena, give consultants lots of reasons to go back in to customers month after month with new offers, new projects that improve the customers' IT environment -- a great set of IT security, continuity and maintenance projects. The Hosting Resources Center looks helpful for working with smaller customers in setting up hosting on-premises, in a partner's datacenter and in the cloud. App Dev and Device Dev Resource Centers are exciting areas for major growth in the channel. Young people coming into the IT industry this decade grew up with hot devices and cool apps, and their creativity can bring lots of new products and solutions to the channel. In the future I'd like to see an Enterprise Partner Resource Center, as well, for channel players who focus on bigger customers with more formal IT issues to solve.
It seems like much of what Microsoft is doing with this release is trying to coax subscription partners into a more cloud-oriented future. What are some of the ways the new Action Pack does that?
Microsoft is making the cloud a big part of the Action Pack by extending Internal Use Rights to the cloud, enabling subscribers to use cloud-based products such as Office 365, Intune, Windows Azure, and CRM Online to run their businesses and to stage and demo customer solutions. And there's lots of cloud-focused training in the Resource Centers. I think it's great that Microsoft isn't trying to force the channel or SMB customers to go to the cloud -- it's just making sure the subscribers have the information, resources and hands-on access to make the best decisions with their customers with respect to making the cloud part of their IT solution.
Partner feedback about the new MAPS on Microsoft Partner and other blogs has been very negative, particularly about the price increase and changes in content.
I've been reading the posts -- on Diane Golshan's blog and of course your blog. With negatives 10-to-1 or more over positives, it's a clear indication that at least for many really vocal channel players something is really broken.
So if it's broken, what should Microsoft do to fix it?
Maybe it's time to rethink the registered partner-enablement model. Ubiquitous bandwidth, the cloud and Microsoft's new devices and services strategy all change the game big time. MAPS came out of the CD era, when we had to guess what the channel needed, then manufacture, package and ship boxes of disks and docs to channel players. I know that getting NFR software out to the channel is still important to the ecosystem, but the packaged-bundle subscription model may not be the best way to go anymore. Channel players' greatest strength is their agility, their ability to change as the market changes, as their vendors change their products and services. Microsoft could support that agility by letting channel players choose what software licenses, training, hardware, consulting/mentoring and support they need for internal use to run their businesses, for app development, for piloting and demoing customer systems and solutions, and for keeping their customers happily up and running. To do that, I'd suggest:
- Replace MAPS with special channel partner pricing on all appropriate products and services at the Microsoft online store -- including hardware products and MCS services. It could be a simple extension of the same online store employees, alumni and customers use.
vThe same store could be used to sell licenses, devices, MCS services and cloud services to partners at wholesale prices for resale to customers.
- Limit the quantity of internal use NFR licenses and hardware available based on the channel partner's size -- number of employees.
- Police the channel partner internal use license sales to avoid piracy and channel conflict.
- Recognize that many channel partners work with customer organizations of all sizes, up through the largest enterprise customers and government agencies. Don't limit the program to small business products.
- Set the channel partner price as close as possible to zero for the internal use, not-for-resale software licenses, and at cost or less for hardware and consulting services.
Microsoft should remember that channel partners are more likely to push products and solutions they're familiar with -- it's important to get products into partners' hands.
- Have beta-level code releases available to partners in the store so that channel partners can develop and test their solutions while Microsoft is finishing its testing and can release their new or revised solutions closer to Microsoft release dates.
- Have savvy MCS consultants available to partners -- for a price -- to join in on early customer projects involving new products and new versions to accelerate partners' ramping up on the new stuff.
- Perhaps bring back the Project Guides and give partners step-by-step service offerings to deliver to customers -- maybe get the IAMCP to build a wiki-like Project Guide library open to all partners.
"Hey, the Action Pack is still the best deal anywhere for IT consultants -- no question."
So, basically, registered partners would be able to pick and choose from Microsoft's whole catalog of software, devices, and services and get just the items they needed for both internal use and for resale.
Right. This enhances the channel's agility and its ability to respond quickly to ever-changing customer needs. And that frees the channel to work on real customer problems instead of trying to manage complex Microsoft relationships and licensing strangeness.
All those look like good suggestions, but public statements from Microsoft so far make it seem unlikely that it'll change the program in the near term. For one thing, the company is saying it broke daily signup records each of the first three days of the program. As the program stands, what are some of the best new parts that partners might not know to take advantage of if they've been using the previous versions of the Action Pack?
Hey, the Action Pack is still the best deal anywhere for IT consultants -- no question. Like everything in marketing programs at Microsoft, it will likely evolve slowly with changes coming on an annual basis or whenever some sponsoring exec gets the boot. And I hope the signups and feedback continue to be strong. It's a key indicator of channel strength and channel belief in Microsoft-based opportunities. I think the all-in-one version of the Action Pack is a great way to keep Microsoft in the enablement role, and the channel players in the role of controlling their own destinies. The old Soviet Union demonstrated that you cannot control a market from the top down. IT vendors should all focus on channel enablement. The free market will decide what solutions get used.
One advantage to having an all-in-one Action Pack is that subscribers will get exposed to resources that can enable them to stretch their wings and add new businesses, new practices to their companies. For example, if you've been doing SMB IT consulting for years and you've come up with some custom apps that some of your customers use, you might use the App Dev resources to generalize and package your apps for sale on the open market. And if a subscriber hasn't gotten into the cloud yet, this version gives them a real opportunity to explore cloud options.
You mention policing. How big a problem has piracy really been with MAPS over the years?
Any broad-based, fog-a-mirror partner-enablement program like MAPS can be taken advantage of by non-partners looking for a steal. The MAPS rip-off artists in the United States came to be known as "Action Packers." But where Microsoft's overall software piracy rates have been reportedly as high as 93 percent in some geographies, when I was policing MAPS, we were well under 6 percent.
I went through the lists manually and researched any that didn't quite fit. I had one fun case: A Baptist minister in Mississippi had subscribed. I contacted him and discussed the program with him. I gave him a lecture on the sin of software piracy. He canceled his subscription immediately, returned the CDs, and promised me he'd do a sermon the following week on "The High-Tech Sin of Software Piracy."