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What Partners Should Expect in Microsoft's New Fiscal Year

Instead of making more large-scale changes, Microsoft is looking to fine-tune its current partner initiatives and programs.

The new Microsoft fiscal year, which started July 1, is upon us. Based on my discussions with Microsoft folks recently and my own intuition, here are my predictions on what FY17 will look like for partners.

The Hero SKU
The Office 365 SKU that Microsoft wants its partners to lead with has changed from E3 to E5, or the Enterprise Cloud Suite, which bundles Office 365 with the Microsoft Enterprise Mobility + Security offering (previously called Enterprise Mobility Suite), CALs and Windows Software Assurance. Those "hero SKU" options also come at a higher price point. Specifically, as part of the E5 offering, Microsoft wants to attach Advanced Threat Protection (advanced mail filtering), Advanced Security Management (security event identification and reporting for cloud) and Lockbox (ability to limit Microsoft access to client data) to every major customer transaction. Voice in the cloud and getting clients using and testing the solutions will be a major initiative.

Partners should get up to speed on these offerings and all their complexities as soon as possible.

Active Usage
The fundamental goal of driving Active Usage will remain in place: getting clients to use more of the Office 365 stack. However, the focus on these efforts -- and inspection of them -- will increase. Microsoft field sellers will see an increase in the Active Usage goal as part of their compensation plan. I'm not sure what the percentage will be -- I've heard as high as 50 percent of their quota attainment will be based on Active Usage.

There have also been interesting incentives bantered about on how to get clients to move faster. Some include discounts on Enterprise Agreements that are contingent upon deployment goals. See my previous article, "For Microsoft's Cloud Partners, 'Consumption' Is the Order of the Day."

Partner of Record
Last year Microsoft made a major shift in Partner of Record, and from my discussions, most partners saw a decline in the payouts. I think Microsoft will leave this program alone for this year while it incentivizes the Active Usage goals that field sellers will have.

This initiative will continue to grow in conflict with partners. Partners will need to shift their services up the chain away from any kind of repetitive task that would be easy for the FastTrack center to take on. This will continue with Office 365 and expand into other solutions from Microsoft, such as Power BI. I could definitely see an Azure FastTrack as an evolution from the current onboarding offerings. I would also not be surprised to see offerings for products like SQL Server or Project Server.

As I've written in previous articles, partners will need to plan ahead and decide if they will work with the FastTrack Center as Microsoft recommends, compete against the FastTrack Center or move away from these services altogether.

Cloud Solution Provider (CSP)
CSP will continue to be a focus program for Microsoft. Redmond will try to drive partners to sell to clients via the CSP program. My prediction is that Microsoft will make compensation to its field sellers neutral between this program and the other, more traditional licensing vehicles.

The program will still struggle when being sold to larger entities that can purchase the same solutions for less money under a Microsoft Products and Services Agreement (MPSA). See my previous column about CSP here.

Microsoft Partner Network (MPN)
I predict that Microsoft will let the dust settle around its MPN changes this past year, which saw substantial changes to the competency structure. Partners should watch for innovative changes under the leadership of Gavriella Schuster, Microsoft's worldwide channel chief. She cares about the partner community and driving knowledge of partner successes within Microsoft.

Azure, Azure, Azure
Azure will continue to be a major focus. Clients only ever need to purchase one Office 365 seat per user, which limits the revenue potential of any particular account. Azure, on the other hand, could offer a huge quota retirement for field sellers. Expect Microsoft to continue to double down on its bet on this offering each quarter.

Expect a calibration year rather than an overhaul year as Microsoft fine-tunes a lot of the program and incentive changes that it has previously introduced.

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About the Author

M.S. Partner is a pseudonym for a former Microsoft U.S. field rep who returned to the channel and writes this column to help other partners succeed with Microsoft. Let M.S. Partner know your thoughts and questions about how Microsoft works at [email protected].