Channel Watch

What Nadella's 'Refresh' Button Means for Microsoft Partners

The Microsoft CEO's new book covers a lot of ground, but has just one reference to the company's broad community of partners. That's a cause for concern.

An occupational requirement of the Redmond Channel Partner editor is going through Microsoft executives' speech transcripts, documents and blog entries with a mental magnifying glass, looking for mentions of the Microsoft partner ecosystem.

In reading Microsoft CEO Satya Nadella's book, "Hit Refresh: The Quest to Rediscover Microsoft's Soul and Imagine a Better Future for Everyone," I found exactly one reference. On p. 134 of a 242-page book, Nadella writes:

"Microsoft already has the largest ecosystem of partners in the world. Hundreds of thousands of companies worldwide build and sell solutions that support our products and services. ... My ultimate goal is to be the biggest platform provider underneath all of this entrepreneurial energy, with an unrelenting focus on creating economic opportunity for others."

That's definitely a strong shout out, but the lack of mentions about the broad community of partners is a cause for concern. (To be clear, I'm talking about mentions of the whole partner ecosystem. The quote here comes from an entire chapter on partnering called "Friends or Frenemies," but it's about Nadella's views on the big, strategic, one-off, industry pairings with companies like Apple, Samsung, Yahoo and LinkedIn.)

It's been understood for some time that traditional reseller partners are going to be less of a priority for this company. For years now, Microsoft channel executives have been urging partners to shift their business models from on-premises projects to a cloud model that includes migrations, managed services and homegrown intellectual property.

As fewer and fewer servers get deployed, it's not clear how many partners Microsoft needs. Anecdotal and indirect evidence is that it's dramatically less partners than before, but many, many more than any of Microsoft's cloud competitors have.

A more encouraging take for partners on Nadella's book is this. Historically, you've told us in surveys that when you evaluate industry vendors to work with, two things are more important than all the channel love, program structure and even product margins. Those two things are that customers have to want the products and the products have to be good.

Microsoft is in a relevance dogfight -- struggling to stay in the top tier of technology vendors that includes Amazon, Apple, Facebook and Google. In my view, Nadella, who came into the job with a much lower profile than Bill Gates and Steve Ballmer, is using this book to make the case to the broader business community that Microsoft still matters.

In "Hit Refresh," Nadella writes persuasively about Microsoft's current investments in -- and commitment to -- compete vigorously on next-generation technologies, including speech interfaces, bots, Internet of Things, mixed reality, artificial intelligence and quantum computing. The implication is that partners who can successfully build with Microsoft year after year on successive waves of technology will have a profitable seat next to a resurgent Microsoft.

Are you concerned or encouraged by what you're inferring from Nadella's relatively sparse messaging to partners? Let me know at [email protected].

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About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.