The Changing Channel
Microsoft Partner Mandates: Focus on P2P and IP for Azure
Howard spotlights Microsoft partners that are succeeding by forging partner-to-partner relationships and developing IP to drive cloud consumption.
- By Howard M. Cohen
- July 14, 2015
You're probably reading this at the Microsoft Worldwide Partner Conference (WPC) where you've come to learn about the future.
Last month I talked about two partner imperatives that are literally mandatory for your future survival and growth as a Microsoft partner. This month I introduce the two new features here in "The Changing Channel" that I promised: Profiles in Partnering and IP for Your Future.
What would new features be without a Foreword, and who better to introduce these two forward-looking forecasts than Phil Sorgen, corporate vice president of the Worldwide Microsoft Partner Network (MPN)?
Looking back to our conversation in preparation for last year's WPC, I reminded Sorgen that when he assured us that "We're very deliberate that we deliver a platform that partners can be successful on [when they are] delivering their solutions," we defined "solutions" as being more than just infrastructure. Rather, they needed to bring true business-relevant value.
This year Sorgen provided additional insight into his definition of the solutions that partners must bring. "Cloud accelerates the ability of companies to move across the four business models [product resale, project services, managed services and IT solutions] and realize higher margins on their own IP. The greatest measure of an IT services company is going to be their recurring revenue percentage and percentage that comes from selling their own IP."
"We see the kinds of solutions that companies create become somewhat limitless," Sorgen says. "Many partners delivered first-party IP customized from a customer work order. That IP probably has applicability to thousands of other customers. Now package that. You can sell it as a standalone app delivered as a single-purchase price, or as a per-user, per-month subscription. The main point is now companies have a reason to not give away rights to their IP."
How To Develop Your Own IP
The most important questions I'll answer in the partner stories I share over the next several months will be what are the various ways in which partners can create their own IP. When asked about this, Sorgen notes that vertical and horizontal are two obvious approaches, but that partners shouldn't overlook infrastructure with added value. "A large percentage of partners still fall into that category. Everything about creating IP doesn't mean you have to jump from infrastructure to coding skills overnight." Sorgen says there are three things he would do if he were a solution provider:
- "The first thing I'd do as a project services provider is make sure I'm raising my services around change management, project management, end user adoption. The platform, our cloud or anybody's cloud, will not consume those capabilities quickly, and won't commoditize them."
- "Make sure you're building a library of repeatable methodologies. This drives down risk, and drives up profitability. Partners have talked about repeatable methodologies for years, [such as] templates and other elements they create. The amount they really use is significantly smaller. Remember that while the back-end is predictable, the customer's environment is not."
- "There's a lot of IP that can be developed around managed services. Help desk, managing assets, [those] become another form of IP and recurring revenue."
Importance of Partnering
In discussing the importance of partner-to-partner, Sorgen began by overstating the obvious: "We believe deeply in the importance of partner-to-partner across the four business models."
Last month I recalled how the MPN program attempted to "raise the bar" by forcing partners to really declare what they were best at, and that they would therefore be forced to partner with other partners to create complete solutions requiring multiple competencies.
Sorgen reminds us that partnering benefits partners in both directions, saying, "No partner can do everything. No partner could ever have the skill to reach all the customers in their market that their solution could fit. One area where it can be really rich really fast [is] for IP creators. [The more that] they create offerings, the more we can ingest those into Microsoft's commerce engine. We create the richest partner-to-partner opportunity both vertically and horizontally. Partners have a channel to resell their capabilities. [It's a] ready channel for IP providers."
In saying this, Phil Sorgen brings us full circle to show how and why the two new focus areas in this column will create a complete solution for partners. Create your own IP that other partners can sell, and partner with other partners to sell their solutions to your customers along with yours. This will be the way partners will do business for the foreseeable future. Those who have been doing it for years will show you the way.
Profiles in Partnering: New Jersey Partners Complement & Compliment Each Other
Lisa Eyerkuss, president of Corporate Training Group (CTG), and Christine Bongard, COO of Quality Technology Solutions (QTS), are good friends who met at gatherings of the New Jersey chapter of the International Association of Microsoft Channel Partners (IAMCP).
Observing that many partners take an "I'll keep you in mind" attitude toward other partners, Bongard finds that the key to success in partnering is to take a proactive approach on both the marketing and sales side.
"We do a lot of events together," says Bongard. "CTG is at our QTS conference every year, we present at each other's seminars frequently, and participate in other events together. We work together on each other's customer lists to grow their awareness about our partnership."
"On the sales side, our salespeople work closely with CTG doing joint customer calls together and giving presentations together. We represent a force together when we bring them to the table with us," Bongard says. "We offer customers one proposal, a single unified solution comprised of both of our value propositions."
"We've been committed to partnering with other partners since day one," CTG's Eyerkuss says. "I think this partnership with QTS is the strongest we have. You want to be a total solution provider, but we only do training. It totally makes sense for us to partner. Our salespeople are so committed to it that even if there's no opportunity in it for CTG, they'll actively talk to their customers about services available from QTS. That's something I've never seen before."
"Both companies are very open with information to share back and forth to help the success of each company," Eyerkuss says. "Christine and I are always in touch, and I know our sales reps are constantly comparing notes with the QTS team to make sure we're approaching the right contact at a customer."
Both agree that the partnership has helped expose both companies to many more customers than either could have reached on its own.
From the pragmatic standpoint, while members of both teams will frequently walk each other into new customer opportunities, there are cases in which it makes sense for them to subcontract each other. Says Eyerkuss, "Christine and I are friends, and will gladly introduce each other to customers as a favor. When it makes sense, we'll discount our rate to each other so the other can make money on the project."
IP for Your Future: The Ideal IP for the Age of Azure
If there's one word that's most important in the Microsoft vocabulary these days, it's "consumption."
Forbes magazine recently reported that some Microsoft field sellers have actually left the company because of the pressure they're all under to increase Microsoft Azure consumption by customers. Longtime Microsoft partners would say that "Azure consumption" is the new "EA shelfware deployment."
So it's no wonder that partners, Microsoft field sellers and executives have so enthusiastically embraced ISV partner Hanu Software. According to estimates, the company's product, Hanu Insight, immediately increases Azure consumption by an average of 30 percent. How does it do that?
You cannot manage what you cannot measure, and one of the reasons customers limit Azure consumption is that they cannot see what they're spending, so they cannot manage their spend.
"Consumption of Azure services is a big concern among Azure customers and potential customers," says Hanu COO Manoj Srivastava. "Hanu Insight conquers that concern by providing complete visibility into how Azure resources are being consumed, by departments within the enterprise, and right down to the project-by-project level."
Adds Hanu Vice President of Sales Barry Atlas, "This means that customers never have to worry about bad surprises when a bill arrives with large unexpected overages."
Hanu is leveraging all of Sorgen's advice, selling its product and services through other Microsoft partners and keeping the Microsoft field sales force fully informed about this tool that can help them increase all-important consumption. On May 1, Hanu Insight was made available on the Azure Marketplace.
Microsoft is expressing support via funding. "When Microsoft incented customers to try Hanu Insight by letting them use Business Incentive Funds (BIF) to pay for a Starter Offer engagement we saw it as a vote of confidence," Atlas says. "Now they've added an Azure Marketplace Accelerator Incentive to encourage their own salespeople to make customers aware of it. To us, that means Microsoft clearly sees the high value Hanu Insight brings to customers."
Creating products and services that help customers manage their use of Azure is how Hanu Software has created its own IP to drive its business. Partners see Hanu as a great way to help close Azure opportunities, and then increase consumption once they have.
As CEO Anil Singh points out, "With Hanu Insight and our Hanu Managed Services for Azure, Hanu has become the market leader for management services for Azure."
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