Why Doesn't Anyone Talk About Microsoft Consulting Services?
For years, there's been conflict between MCS and Microsoft's closest enterprise partners -- sometimes boiling, sometimes just steaming. It's time for Microsoft to start communicating honestly and openly with partners about the role, and compensation model, of MCS.
- By Barb Levisay
- December 03, 2015
Based on Microsoft's fervent advocacy for Partner to Partner (P2P) collaboration, you would think that Microsoft Consulting Services (MCS) would be the poster child for partnering. MCS employs a corps of solution experts with direct access to product groups. Partners have deep benches of technical and functional consultants. There is no shortage of new solutions or clients looking to implement them. Sounds like a perfect setup for partnering at an epic level.
Yet there's a long history of distrust and conflict between partners and MCS. And just like some long-simmering family feud, no one wants to talk about it.
That loaded silence has made it challenging to cover this topic. Over five years and hundreds of stories written for Redmond Channel Partner, I've always found both partners and Microsoft eager to contribute their perspective, until this one.
For this article, most of the interview requests I sent to partners went unanswered, phone calls ignored. Several responded that they had nothing positive to say and didn't want to go on record. Some spoke, several on condition of anonymity.
Partners weren't the only careful ones. When I've contacted Microsoft for input on other topics, the response has always been quick, ready to schedule a call with an expert or executive at a moment's notice. But not this time. After a week's delay, I was asked to submit my questions for e-mail response "due to travel schedules," which took another 10 days to receive back.
What is it about MCS that makes people clam up?
The uncomfortable relationship between partners and MCS isn't new. In 1999, Microsoft posted "Microsoft Consulting Services: Putting Partners Ahead of Profits," clarifying the role of MCS:
"While most major software companies look at consulting and support services as a vast opportunity with almost limitless potential for growth, Microsoft has taken an entirely different approach. Instead of recruiting an army of consultants (IBM, for example, has more than 120,000 service and support employees), Microsoft has approximately 8,000 service and support employees, with 2,200 of those dedicated to consulting services. At Microsoft, only 2 percent of the company's revenue comes from consulting and support services."
The article continued, "More important, the goal of Microsoft Consulting Services is not to generate earnings for the company. Rather, MCS aims to drive sales of Microsoft products by working with large enterprise customers to help them adopt and deploy Microsoft products, and with technology solution providers to make sure they can offer a wide range of Microsoft product-related services backed by the highest level of technical skill and knowledge."
The joint venture of Microsoft and Anderson Consulting (now Accenture) in 2000 to form Avanade was seen as a play to alleviate the perception of direct partner competition for services delivered in support of Microsoft's growing enterprise footprint. Microsoft didn't put all its service eggs in the Avanade basket, however, and MCS continued to bear the brunt of partner discontent.
At the first Worldwide Partner Conference (WPC) in 2003, Mike Sinneck, corporate vice president of Worldwide Services, acknowledged the contention between partners and MCS. He noted improvements over the previous year in partner engagement and promised that MCS would include partners in as many contracts as possible, serving as prime contractor only when necessary. In his remarks, Sinneck said there were 3,800 MCS consultants around the world whose primary function was to support the architecture and design phase of enterprise engagements.
"We've changed the focus of everything in field services. We've adjusted their measurement, we've created a balanced scorecard that puts customer and partner [satisfaction] at the top of everything we do," Sinneck told partners. "We've got specific targets for revenue-generating with our partners that's over 40 percent of the P&L today. We're doing everything we possibly can to reinforce the notion that we're here to do this together with you to generate real value for our customers."
In 2007, Maria Martinez, corporate vice president of Worldwide Services at Microsoft, took up the topic again at the WPC: "One area that I usually get a lot of questions about is the work that we in services do around the Microsoft Consulting Team -- especially that focuses on projects with customers." Martinez explained that only 25 percent of MCS services were delivered through customer-focused project work. Of that project work, 37 percent was dedicated to making the market for solutions -- driving first reference implementations -- and 63 percent responding to customer requirements of Microsoft engagement. Almost half of those MCS-prime projects passed through revenue to partners, according to Martinez.
After 2007, the WPC annual soundbite to allay partner concerns about MCS faded to silence.
While Microsoft doesn't officially release the total number of MCS employees or their roles, the number 12,000 has been cited pretty consistently since 2000. Of that number, indications are that close to two-thirds are dedicated to support services, including premier services. That means that there are probably about 4,000 MCS employees engaged on client projects.
Today's MCS team appears to be in line with that estimate. According to the Microsoft Enterprise Services Web site, "The current team includes more than 12,000+ total consultants, enterprise architects, premier support and sales professionals who live and work across 191 countries, supporting 46 different languages engaging in customer and partner interactions through on-premises, phone, Web, community and automated tools."
According to a Microsoft spokesperson, MCS is part of the Microsoft Services organization, which includes Strategy and IT Planning Services, Consulting Services, Premier Support, and Customer Service and Support. "Microsoft Services engages with partners as part of the broader Enterprise & Partner Group (EPG) and Corporate Accounts (CA) partner strategy, and Microsoft Consulting Services (MCS) is part of Microsoft's Services organization -- including Strategy and IT Planning Services, Consulting Services, Premier Support, and Customer Service and Support," the spokesperson said.
Project Delivery with a Systems Integrator
There are partners making a nice business working with MCS. Capax Global LLC is one of the 15 to 20 members of the MCS Preferred Services Provider (PSP) program. "We have been a top-five partner in the program for the last five years," says Jerry Head, director of Resource Operations for Capax Global. "We have a deep bench in our competencies and have established a strong relationship with the MCS teams."
Through the PSP program, MCS engagement managers contact Head requesting resources with specific technical skills. Capax Global subcontracts the consultants to support the engagement. "In these cases, MCS is generally engaged as the prime at the request of the customer," Head says. "Capax employees work alongside MCS, treated as equal team members. If the size of the project merits, Capax will also provide a project manager to support the MCS project manager."
The other way that Head places employees on MCS projects is through the relationships he's built with MCS engagement managers and architects over the years. "They know our team and our competencies. We've always had the greatest success working with MCS," says Head. "They work closely with us, keep us informed and are very responsive. We've been part of many successful engagements with MCS delivering high-quality work to the clients."
An ISV Sees More Cooperation & Less Competition
For ISVs, the relationship is a bit different. Enterprise search solutions provider BA Insight engages with MCS in three ways, according to Jeff Fried, chief technology officer. "The first is as a subcontractor on MCS projects where the BA Insight products are currently being used. Second, we work side-by-side on projects that are not led by MCS," says Fried. "And third is as competitor in a build-or-buy scenario where the customer has approached MCS to build a search solution."
While acting as subcontractor or side-by-side on engagements is generally without issue, there has been friction with MCS in competitive pursuits. But Fried has noticed an improvement in communication within MCS. "We have seen a difference in MCS in recent engagements," Fried says. "We are seeing more cooperation on the side-by-side project and less competition on the build-or-buy."
Working with MCS over the years, Fried has found that understanding the workings of each Microsoft team is important. "Even under [Microsoft CEO] Satya [Nadella], different teams within Microsoft don't talk to each other. MCS, product field sales and field support work under very different models and motivations. You need to treat them each appropriately," Fried says. "With MCS, we have found that it's important to reach out to the architect and the services sales person on each project. Even if you lose to MCS competitively, it's good to keep the door open."
The Elephant in the Room
With the potential upside for both systems integrators (SIs) and ISVs to engage with MCS, why are so many partners unwilling to talk? On condition of anonymity, one sales executive at a national SI shared multiple stories of MCS account executives and engagement managers abusing the partner's trust.
The sales executive described one recent opportunity that MCS had invited the SI to jointly pursue. "The project had a tricky architecture that one of our technical folks was particularly qualified to handle. We invested the time, creating a detailed scope document," the executive says. "Once MCS received the document from us, they decided to pursue the deal on their own. We got nothing."
Citing a pattern of abuse during the sales process, the sales executive believes that a compensation model that rewards MCS as prime on the engagement drives the behavior. "I reached out to work collaboratively with MCS time and again, only to have people desperate to own the sale stoop to new lows. I don't think there is a deal that could be structured that would make me willing to work with them again."
Harking back to the statements of Microsoft execs at the WPC, it's not hard to believe that compensation plans for MCS engagements are likely to drive behaviors that serve Microsoft's interest above that of partners. In Microsoft's own push to promote P2P as the standard for engagement delivery, structuring compensation correctly is often cited as an important component of success.
In response to the question, "Does MCS actively pursue service opportunities? If so, do they compete with partners on those opportunity pursuits?" a Microsoft spokesperson replied: "It is our mission to empower every person and every organization on the planet to achieve more, and because of this we work with customers in whatever way they are most comfortable with. Account managers in the EPG and CA lead Microsoft's response to customers and work with customers to determine whether Microsoft Services or a partner is the best approach to serving a customer on a particular engagement. Microsoft Services represents a very small portion of the overall consulting business market on Microsoft technologies. At our core, it's our goal to deliver a great customer experience, whether that's through partners, Microsoft Services or a combination of both."
John McGlinchey, a former MCS employee and currently enterprise architect for a large Philadelphia-based law firm, says, "In my experience, most of the engagement managers were highly motivated to place MCS resources instead of partner resources. They got higher margins selling their own resources and preferred to control the engagement."
For those partners looking to place resources, the MCS model works well. "MCS-driven engagements, where they do the engineering and architecture work and need partner resources to deliver the less-complex services, work very well for MCS and for partners," McGlinchey says. "I think the problems come in competitive situations with large integrators that have the same kind of skills and processes that Microsoft has."
The fact that those SIs are unwilling or even afraid to talk about their experiences with MCS is the heart of the problem. These are the partners that lead innovation and drive more adoption than any others in the channel. The same partners that Microsoft admonishes to work collaboratively with its competitors. The same partners that bet their entire businesses on a single vendor relationship.
That silence is symptomatic of a deep-seated, underlying dysfunction or mistrust in MCS. That's not healthy. That needs fixing.
Realizing the Potential of MCS to Partner (M2P)
It's hard to know if Microsoft recognizes there is a problem. According to a Microsoft spokesperson, "Microsoft Services regularly engages with partners to best support our customers' needs. We've seen strong success by working to develop proactive joint selling relationships with partners, engage partners as customers and vendors, and also enable partners with resources and training."
But are the customers really receiving the best support possible? The number of MCS engineers, architects and consultants is limited. If partners with some of the best talent in the channel, including MVPs, are avoiding engagement with MCS, then there is missed opportunity to tap those resources for high-profile engagements.
In general, the objectives of MCS and partners of every kind seem to be in sync, driving adoption of Microsoft solutions, keeping technical resources busy and putting the most qualified people on every client engagement.
The partners I spoke to, on and off the record, agreed that MCS has much to share. Their technical people are highly regarded and have direct connections with the product teams. MCS holds project managers to high standards following established processes with excellent documentation that delivers consistent results. The Premier Services team lives up to its name.
There will always be customers that want Microsoft to be accountable, holding the paper on the engagement, especially with leading-edge technology. MCS fills a valuable role in the ecosystem that could be used to a huge advantage -- as a bridge builder, bringing the best of the channel to the engagements that can demonstrate Microsoft's business technology leadership.
It's hard to believe that the compensation problem, which has lingered since 1999, can't be easily fixed. If MCS and partner sales teams are motivated to work collaboratively, objectively placing the best people on Microsoft's most visible engagements, everyone wins.
A bright note in the conversations with partners was universal agreement that the new leadership of Efrem Stringfellow, vice president for U.S. Services Sales, is a breath of fresh air. In the role since July 2014, Stringfellow is highly regarded as an advocate for partners. Hopefully, partners will hear more from him as he settles into the position.
In the new age of Nadella, Microsoft is clearly working hard to be more transparent and open up communications with partners. Taking the lead to open up the conversations about MCS looks like the perfect opportunity to demonstrate partnering at its finest. It's time to sit at the table and talk things through so that MCS and partners can work together "to empower every organization and every person on the planet to achieve more."