Partners: How To Make AI Work for You and Your Customers

Nobody has missed the buzz around the chatbot ChatGPT created by OpenAI. This is exciting, and acts as an easily accessible consumer-friendly showcase of what can be done with artificial intelligence.

Microsoft is clearly seeing the light around AI. It has supported OpenAI since 2019 and is now, according to the press, in negotiations to acquire a large stake in the business. We all anticipate that AI will change our world and people's private and professional lives.

AI will need lots of compute and storage power, which makes it a high-potential revenue driver for the Microsoft cloud. Automation through various robotized solutions is also part of AI -- a market that is already huge, and growing.

The great news is that Microsoft partners can benefit from this. Partners should look at this from at least two perspectives, one externally facing and one internally facing.

First, your customers are dreaming of AI-driven solutions, so your job is to help them understand what they need and to deliver it to them. They need a partner that is a trusted advisor, understands their business and can help them figure out what they need. Like car manufacturing icon Henry Ford famously said about the development of the Ford Model T, "If I had asked people what they wanted, they would have said faster horses." AI presents an important opportunity for partners to assist customers in understanding what they need and want.

The low-hanging fruit is in helping customers automate mundane, everyday tasks; gain efficiencies from higher-quality processes; cut costs because fewer people are needed; and speed up response times with better results for end customers. Automating a process that is rarely used doesn't make sense, so instead put your focus on where you will make the most impact and create the highest ROI for your customers.

Partners should consider either building a separate AI practice or mandate that existing practices make a plan for how to add AI in their offerings. This goes not only for professional services practices but also for ISVs and others.

If your business is geared toward a certain industry, you will benefit by having a deep understanding of the processes that are vital for these customers. (If you don't already have the right people for this, you should consider recruiting seasoned experts.) Microsoft Power Platform is a great set of tools when creating magic for your customers but you will need expertise in more technologies to become successful.

Reach out to your existing customers and start the conversations, document your successes and let your marketing team tell the story.

Second, implementing AI in your daily operations will give you benefits that are similar to what you aim to provide for your customers. There are many areas where you can make good use of AI internally. GitHub Copilot from Microsoft can help your software code development work by shortening your development cycle, increasing your quality and significantly reducing cost.

Other areas where AI makes sense internally are in your customer service desk (where you can use chatbots to automate part of the support conversations) and for monitoring your compute resources in the cloud and on-premises (where you can also automate many actions that need to be taken).

The cost of running your business can be significantly lowered if you embrace AI to the fullest. We all know that margins are slim, so any savings are welcome -- and huge savings are warmly welcome! Start small and experiment with AI. Build your knowledge and perhaps recruit a few experts if you don't have the right people already. Make sure that you keep AI at the core of your business decisions and establish internal processes for your senior management team to track the progress and to measure the outcome.

My core message is that you cannot afford not to embrace AI, because your competition will. AI will be a fantastic enabler. There's still time to jump on the train to the future, but some cars have already left the station and you don't want to be the last one out. As always, it makes sense to work together; discovering areas for partnering around AI is a great topic around which you can build alliances and partnerships. Good luck!

Posted by Per Werngren on January 23, 2023 at 3:53 PM0 comments

The 7 Pillars of a Strong Partner-to-Partner Relationship

I'm often engaged in conversations with Microsoft partners around how to structure partnering arrangements -- often called P2P, or partner-to-partner, relationships.

Many partners come to me either on the brink of starting their partnering efforts and wanting to know how to build their strategy, or after they've been doing P2P for a while but don't feel that it's working for them.

I genuinely believe that partnering is a great way to drive long-term success. It involves lots of investments and time, but when you do it right, it will give you a great ROI. Partnering not only gives you additional revenue, but it also encourages you to specialize -- another characteristic that I truly believe has its merits for partners, as the days of "Jacks-of-All-Trades" are long gone.

However, if a partnering arrangement is not successful for all parties involved, then it will eventually die, either slowly (because none of the parties care about it anymore) or violently (because one of the parties says that enough is enough and just terminates the agreement). In order to build lasting P2P arrangements, you'll need to have the right mindset, be generous and look after the success of all parties.

Here's a list of what I think makes a strong P2P relationship. It's based on my experiences serving the partner ecosystem for many years, and seeing both tremendous successes as well as quite a few failures.

  1. Margins: It's important to have a reasonable margin that motivates the efforts around both making the sale and also managing the ongoing relationship.
    • Suggested margin is 20 percent for projects/assignments for year one and 10 percent for additional years.
    • Suggested margin is 20 to 30 percent for SaaS and licenses for year one, and 10 to 15 percent for additional years.
    • It is important that the partner that takes the burden of doing the actual selling gets a decent margin so they can compensate and motivate their sales teams.
  2. Prime Partner: One of the partners should have the legal agreement with the customer. This partner is the "prime partner" (or "originating partner").
  3. Documentation: Always document the terms of your partnership. It doesn't need to be complicated, and the Partnering Agreement Template I've created is a great starting point (it's also an official IAMCP template). For every project and assignment, I strongly recommend that you create a Statement of Work (SoW). It's easy to forget to document the terms of doing business or to save it for later, but it's crucial when you bring in more people in both organizations, as it provides an important safety net for all parties.
  4. Elevator Pitch: Make sure you have a partnering-friendly elevator pitch and practice it so it comes naturally -- even if someone wakes you up in the middle of the night. You shouldn't brag about your company; instead, it should be about what you're bringing to the table in a partnership and articulated in a way so that people want to bring you in. This is art in itself; don't feel embarrassed to practice with your co-workers. Everyone in your company that has conversations with partners should use the same pitch.
  5. Bi-Directional:  It's important that both partners strive to sell each other's services. This is not always possible, but the mindset should be to help each other's bottom-line profits. Partnerships often fail when one partner thinks they are superior and don't care for the other partner. It needs to be a two-way partnership in order to last!
  6. Visibility: Be proud to show the customer who your partner is and don't try to hide it. Customers love partners that bring in other specialized partners, while still taking responsibility.
  7. Conflicts: If a partnership is going to survive long-term, you'll need to take care of potential problems early. You'll need to measure and discuss both customer and partner satisfaction regularly so you keep your customers happy and eliminate unnecessary friction. And be generous and help each other! Remember, you're in it together. 

Here are some useful assets that will help you standardize:

  1. The IAMCP's Partnering Agreement Template package (which includes Partnering Agreement Template Instructions, the Partnering Agreement Template and Discussion Questions for Partnering).
  2. The P2P Maturity Model endorsed by IAMCP and IDC.

Posted by Per Werngren on December 28, 2022 at 7:33 AM0 comments

The Microsoft Cloud Partner Program Is a Welcome Overhaul

I have been part of the various iterations of Microsoft's partner program since the 1990s. Microsoft has done a great of job of staying relevant with its partner program through the years.

Last week, the company decided it was time to make a major overhaul, announcing that the existing Microsoft Partner Network (MPN) will become the Microsoft Cloud Partner Program effective Oct. 3, 2022.

Our ecosystem has changed a lot since the MPN saw the light of day over a decade ago. On-premises computing is gradually going away, and partner characteristics have changed a lot. Today, we host our solutions in the cloud, and nobody really spends much time on physical infrastructure; all of that is handled by the dominant cloud vendors, who deliver compute from industry-scale datacenters that span the globe. Customers buy a combination of SaaS and bespoke applications hosted by themselves, or a partner, in the cloud. And, thanks to the low-code/no-code revolution, applications (or "apps," as we now call them) can be built faster and better than ever before.

A dilemma of recent years has been that customers haven't been able to differentiate between partners based on their MPN competencies or rank them based on whether they have Silver, Gold or even a higher level of specialized certification. One reason for this difficulty is that many competencies in the MPN were too broad and perhaps not really customer-facing.

The announcement of the Cloud Partner Program last week by Rodney Clark, Microsoft corporate vice president and chief of channel sales, was a welcome one. It will have six solution areas that I think makes sense:

  • Data & AI (Azure)
  • Infrastructure (Azure)
  • Digital & App Innovation (Azure)
  • Business Applications
  • Modern Work
  • Security

The MPN's Gold and Silver designations are going away. Instead, partners will be given the title "Solutions Partner" at the base level, and can opt to qualify for further specializations and advanced programs. This makes it easier for partners and, perhaps even more important, for customers, as they will be more likely to find the solutions that are relevant to them than they could under the old competency system.

Partners earn their designations by proving that they have great customer growth, the right skills, revenue and more. The new system to quantify these factors is called the Partner Capability Score, or PCS. It takes a PCS of 70 (out of an available 100) to qualify for a single solutions area. The points system reminds me of an older version of the Microsoft partner program (internal code name "Octane") from a decade ago, when partners also collected points, but this time it is much better-structured (although I was also a fan of the old scoring system).

Microsoft has put lots of effort into thinking about how to not hurt partners in the transition and give them ample time to make the switch to the new program. For instance, it said that the highly appreciated Internal Use Rights (IUR) benefit will remain, but under the new name of "Product Benefits."

I've always believed that the bond between partners and Microsoft is indeed a true partnership. Partners that invest in Microsoft long-term and strategically will most likely find that Microsoft will do the same with them.

In the new Microsoft Cloud Partner Program, it will be easier for Microsoft to see which partners are driving tangible business growth around the various Microsoft offerings, and they can support these partners even better because their goals are well-aligned. That's a great foundation for a fruitful partnership.

Posted by Per Werngren on March 22, 2022 at 4:28 PM0 comments

2022 Channel Predictions: The Age of Hybrid Work, 5G and Hyper-Focused Cybersecurity

It's now time to close 2021 and look forward to 2022. Our industry -- and our channel ecosystem -- has re-innovated itself during the pandemic, and we can take pride in having helped people change the way they work.

For 2022, the digital transformation will continue. In many ways, the pandemic has accelerated digital transformation, but the opportunities are still endless. We have only just skimmed the surface; beneath are whole industries that need to transform, and partners with not only technical knowledge but also the right business acumen will become heroes.

Here are my predictions for what partners can expect in the coming year.

  1. I predict we will see people return to their workplaces but probably not for the entire business week. There will be continued demand for hybrid work environments and online collaboration platforms that give an equally great experience for people working remote as for people sitting in a traditional office. From Microsoft, we will see a huge momentum for Teams, Power Platform and Dynamics to support the transformation, and partners should make investments in these areas. Power Platform, in particular, will continue to build momentum, and partners that bet on building a verticalized practice using this set of tools will become hugely successful.
  2. Partners will be able to deliver solutions to their customers much quicker than ever before, but it will be important to have deep knowledge of the needs of certain industries (verticals). Customers are increasingly demanding ways to transform their operations from manual to automated through artificial intelligence and machine learning -- that's a game-changer. There is a need for partners that can come up with ideas for what to automate.
  3. We will most likely see the rollout of mobile 5G, enabling new scenarios where devices are always connected. IoT will get a boost from this, which will benefit ISVs. It'll be well worth watching how Azure Edge Zones will gain traction in the marketplace and take advantage of the 5G boom.
  4. Microsoft partners that have made a living out of the Cloud Solution Provider (CSP) program will continue to do so, but transacting licenses will not be enough. Partners need to come up with innovative services that add value and differentiation, where the CSP licenses are only a small part of the overall offerings. Microsoft's New Commerce Experience (NCE), which is being rolled out in 2022, has many characteristics similar to Azure Plan and Enterprise Agreement, and it harmonizes the way Microsoft transacts licenses. As with everything new, it'll take a while to learn the ins and outs, but I am sure that partners will learn how to use NCE to their advantage -- just as they have always done with every new licensing evolution.
  5. The market for cybersecurity is unfortunately growing, as more attackers are orchestrating ransomware and other types of attacks. Most have a commercial angle, and it looks like it's a profitable business (if highly illegal). There's a strong demand among customers for help in preventing attacks. We need more Microsoft partners to focus on building cybersecurity practices around this so that the "good guys" can become stronger and -- at some point -- the attackers become more likely to give up, as the cost of doing business will be too high.
  6. Hosters will continue to face problems with their existing business model unless they evolve and become modern MSPs that don't try to hold on to legacy datacenters. They should stop their investments and plan to decommission existing hardware and move to the Microsoft Azure cloud. The core asset for a modern MSP -- or virtual hoster, as I love to call them -- is to manage workloads. Owning your own datacenters is a thing from the past.
  7. The trend of using other partners and individual contractors will continue. Partners appreciate having the ability to build virtual teams with specialized individuals regardless of location or employment status. This makes partners able to move faster and adapt to changes in customers' needs quicker. Hiring gets easier when you can be more flexible with location and care less whether the hiree is on your payroll as an employee, an individual contractor or employed by one of your partners. Flexibility will give you more options to work with the world's top talent. This is a new dawn for partner-to-partner (P2P). More companies understand that P2P is a great way to grow business and build stronger bottom-line profits.
  8. Leadership is evolving. We have taken giant leaps in the past two years, and we will continue to do so for the years to come. Modern leaders with less prestige, less ego, a genuine interest in diversity and inclusion, and are fans of flexible hours will thrive and attract top talent to work with them. I use the words "with them" instead of the traditional "for them" as that sends an important signal.
  9. Lastly, I hope that we will go back to physical large conferences again like Microsoft Inspire. Of course, conferences will take learnings from the pandemic and offer hybrid experiences, where people can either travel and meet in-person or participate remotely from the comfort of their homes.

Posted by Per Werngren on December 22, 2021 at 11:28 AM0 comments

What Partners and Businesses Can Learn from the Facebook Outage

I got the first alert at 11:40 a.m. EST on Oct. 4 that there were problems with Facebook. As it's not business-critical for me, I didn't pay much attention -- but I did get puzzled when I couldn't connect to WhatsApp, as that is indeed a critical tool for me to interact with my different teams around the globe.

We've now learned that the outage lasted for six hours and involved not just Facebook but also services owned by it, like Instagram, Messenger, WhatsApp and Oculus VR. This was a costly outage for every business that depends on these services, and it shows how business-critical these social media resources have become.

Having led a large multinational hosting business, I know that sometimes problems occur that affect uptime. And any CEO in the hosting or managed services business knows that such incidents can have a big impact on reputation. Most outages aren't as big as the one that affected Facebook this week, but sometimes they are devastating.

Some problems should be expected, and you can take reasonable efforts to prepare for them. According to Facebook, the outage originated from an upgrade of routers. The ensuing problems shouldn't have been a surprise for anyone who works with infrastructure.

What is a surprise is that so much was connected to these routers. Not only did all of those customer-facing services go down, but Facebook's own e-mail system and a bunch of other internal systems -- including the entrance to the Facebook office building -- stopped working. To put it mildly, it looks like Facebook made the mistake of putting all of its eggs in the same basket and not following best practices for an enterprise-class online infrastructure.

Here's some advice not only for Facebook, but for everyone -- including partners -- running and managing business-critical infrastructure:

  1. Segment your infrastructure so that a problem doesn't spread across your whole environment. Your administrative network should be separated from the network where your customer-facing systems reside. Even if you're not as big as Facebook, separate your different services into several networks. This will also help security, as it will make it much harder for attackers to bring your entire environment down.
  2. Plan your upgrade. Make sure that it has been thoroughly analyzed and vetted. The higher its potential to impact business, the more you should plan and analyze prior to the actual upgrade taking place. Make sure that you have a decent change-management process in place.
  3. Never upgrade everything if you can avoid it. Simulate the upgrade in a test environment, then start the upgrade with something less business-critical than a system that is used by 3.5 billion users. The "big bang" model of upgrades fails way too often.
  4. Make sure that you know how to roll back an upgrade quickly and safely. Learn the right procedures for how to make it happen.
  5. Rehearse frequently so you know what to do when something goes wrong. It's like a fire drill; you should have procedures and protocols to follow.
  6. When all of your services are up again, make sure to create a written incident report and discuss the findings inside your organization. This is how my old company learned from past errors. Our mantra was that the same problem should never happen again.

Hope this will help you to prepare for the unexpected.

Posted by Per Werngren on October 05, 2021 at 11:11 AM0 comments

8 Steps To Protect Your Organization Against Cyberattacks

I seldom write about IT or cybersecurity, but today I decided to make an exception.

There have been several publicly known ransomware attacks recently. The attacks against Colonial Pipeline and SolarWinds were eye-opening to many. The attack against Kaseya affected, according to the vendor, 1,500 organizations worldwide. The villains found a clever way to extend their reach by attacking vendors that provide tools for MSPs. Even my local golf club got hit in the Kaseya attack.

Ransomware attacks are nothing new, but what is new is that criminals are now better organized and have a larger and more devastating impact. They have also aligned their demands with how much their victims are prepared to pay.

You can never fully protect yourself, but you can make it harder to become a victim. Perhaps it's like when burglars scout houses to rob, avoiding the ones with high security. Here are eight ways to make sure that your "house" has a decent level of security:

  1. Scrutinize the tools you're using and think about how you can create silos in your environment to limit the impact of an attack. Think like the U.S. Air Force, which makes sure to have two separate fleets of tanker aircrafts. If one manufacturer's aircraft has an issue, the other can still fly and provide refueling services in the air. Operational capabilities remain intact.
  2. Make sure all your systems are updated -- that's probably the best protection against being attacked. But also make sure that updates are not infected (like what happened to Kaseya's customers). Most updates don't need to be installed right away; you can often wait a few weeks. And for business-critical systems, it makes sense to first install updates in an isolated test environment. Last, make sure the updates are authorized and published by your vendor. When in doubt, make a phone call to the vendor and verify.
  3. Train on how to roll back updates so you are comfortable doing it on servers, personal computers, SANs, firewalls, routers, etc. When there's an issue, you might be able to limit the impact with a quick roll-back.
  4. Make sure that you use complex passwords and implement two-factor authentication. Best practice is that your administrators should use personal accounts with the lowest possible level of access. Once they need a higher level of access, they should use another account just for that purpose, or get their access temporarily elevated, and then go back to the lower level of access for regular work.
  5. Separate your backups and make sure they are impossible to reach by someone with full access to your production environment. Ransomware attacks often involve attacking backups, but if they're separated and intact, you can get back to business quicker. Simulate restoring your systems with your backups as it's important to know exactly what to do when needed. When your backups are separated and you know exactly how to restore, you will be much more protected.
  6. Create a map of which systems are business-critical and if there are any alternative solutions when you're under attack. That might mean going back to manual routines or switching temporarily to alternative systems that you can get up and running within a number of hours.
  7. Evaluate your vendors on how seriously they take cybersecurity and how prepared they are. We are all in this together and no chain is stronger than its weakest link.
  8. Educate your staff in cybersecurity so they understand how they should act. This involves what type of pages to avoid, what information never to give and how to detect phishing e-mails.

It's a dangerous world out there. Follow these steps and together we can make it a little bit less scary.

Posted by Per Werngren on September 02, 2021 at 2:26 PM0 comments

A Post-Pandemic Playbook for Microsoft Partners

We have all had a very different past year. We have all suffered and made sacrifices, and many of us have lost people close to us.

Yet our partner ecosystem has been highly innovative, and there has been a strong demand for digital transformation, which has benefited many of us.

Here are 10 things I see ahead for partners as we put the pandemic in the rear-view mirror.

  1. The digital transformation will continue. Even if we eventually go back to our offices, it will be part-time and demand will be strong for solutions that enable us to collaborate with others and carry out our work without physically leaving our homes.
  2. Telecommuting will continue to be very important. Outside of our ecosystem, it will drive high-speed Internet access and networking infrastructure.
  3. Our ecosystem will continue to benefit from Microsoft Teams and there will be more solutions that are built to be first-class citizens inside Teams. We will simply see smarter and deeper integration.
  4. Business transformation driven by artificial intelligence and machine learning will accelerate. Partners with deep insights in certain verticals will be able to make a big dent here. Charging not by the hour but instead taking a slice of the value of the improvements will be a winning business model for partners that dare.
  5. Microsoft's massive investments in its business applications portfolio will bear fruit. Partners should embrace low-code/no-code development platforms as they will enable them to more easily and quickly deliver applications and solutions that will give their customers faster ROI. Partners should invest in getting to know a few verticals and recruit subject-matter experts that can work more closely with customers. People that really know the ins and outs of a particular vertical will be in high demand.
  6. Hosters across the globe are rapidly becoming MSPs in the cloud; I call them virtual hosters. The game-changer last year was that the cost for running on Azure reached parity with hosting in your own datacenters. We see that the cost for hosting in Azure is going down further and the performance and functionality are going up. Partners with legacy datacenters should make a plan for shifting to Azure as that will help them increase profitability and grow their customer base. This is not an area where you can be nostalgic. The change is here now and creates opportunities for the bold.
  7. Digital presence and online marketing became much more important when we couldn't meet in person. Partners should invest in hiring the right people to take them on this journey. When you do it right, you will also discover that your geographical market increases because you can attract customer from far away.
  8. Talent is always important. When you are not bound to be close to an office, you can recruit people who are located farther away. This increases the talent pool and benefits both employers and employees. Some partners will want to hire people only in the same country, and others will take the opportunity to hire people residing in other countries. Whatever your preference, the geographical area for your recruitment efforts will be bigger -- and that is a great thing. I encourage partners to be flexible around working hours as the old 9-to-5 workday is not necessarily valid anymore. Being open to giving a bit of freedom will make you more attractive as an employer.
  9. I always talk about P2P, or partner-to-partner. Every year, I see that momentum increase. Partners that specialize will also see the need for P2P. I notice increased interest around P2P from Microsoft, Microsoft partners and other ecosystems, so my prediction is that this will continue and accelerate. My advice is to make P2P core to your DNA. Work on a structured approach where you get buy-in from senior leadership and where you plan and measure your success.
  10. Last is a wish for the face-to-face meetings that I really miss. Maybe in-person conferences will be able to restart at the end of this year. Who knows? I can only hope.

Posted by Per Werngren on June 02, 2021 at 10:12 AM0 comments

15 P2P Tips from a Former IAMCP President

As a former president of the International Association of Microsoft Channel Partners (IAMCP), I had the privilege and honor of leading the team that took the IAMCP from four to 44 countries and reached an annual revenue of $10 billion in deals between our members. That experience gave me some visibility into what makes partner-to-partner (P2P) relationships and engagements successful.

Today's Microsoft ecosystem is highly vibrant. We see great innovation happening across the globe, which opens new opportunities. As our customers are increasingly global, we need to address how to sell and deliver to them beyond geographical borders.

By making P2P core to your strategy, you will accelerate your company's success, which translates into higher growth and increased company valuation. But, as with most things in life, you will need to make a full-hearted effort to make it fly, and it will take some time and structure before you get there.

Here's the recipe for a modern approach to P2P:

  1. Make a strategic plan for how to develop your partnership over time. My P2P Maturity Model is a great framework for how to create a structured approach toward successful partnering, and I encourage you to involve your partners in the journey, too. You can achieve some success by just being opportunistic and ad hoc, but long-term success demands a structured approach.
  2. Get full buy-in for P2P from the senior leadership in your practice, business unit or company (depending on your size). I've seen a few partnerships end in disaster when people lower in the organization were all on board but the senior leadership did not recognize the importance and failed to fully commit.
  3. Value sales through your partners as equal to sales generated directly. Your salespeople should get the same level of compensation for deals through partnerships as for deals done direct. Compensation drives behavior.
  4. Focus on what you are truly great at and ditch all efforts to sell and deliver in areas where you cannot honestly claim that you are world-class. Get rid of everything that is non-core and either let people go, or re-assign them so that they become part of your core focus. Perhaps you can sell your non-core practice areas to another Microsoft partner; that way you ensure that your redundant staff get a new and more suitable employer. Today's environment is highly competitive, and you cannot afford to spend time and money on solutions where you don't stand out as a leading player. Here's an opportunity to be bold and make the right bets on what is core and let fellow partners help you with non-core needs.
  5. Forge partnerships with companies that can help you in the areas where your customers need help but that are outside your own scope. You should invest time in mapping your needs and create a longer list of potential partners that you then narrow down to a shorter list.
  6. Forge partnerships with companies that can help you sell and deliver in geographies where you are not present. This is less risky and costly than opening branch offices or subsidiaries yourself. And again, spend the time needed to map your needs and identify what you can bring to the table.
  7. Make your partners an integral part of your operation and build trust by being totally transparent under a formal non-disclosure agreement (NDA).
  8. Ensure that everyone in the partnership feels that the relationship is financially successful. If you sell each other's billable hours and services, the margin should be the same for both; nobody should get a better deal. Make sure that you're working with decent margins for all parties.
  9. Assign ownership. Someone in your organization needs to be responsible for nurturing and developing your partnerships.
  10. When things go bad, invest in resolving it in a way that makes the customer and your partners willing to continue working with you. Together with your partners, analyze what you can improve to avoid future problems. Long-term partnerships are the most profitable. By being willing to learn from problems, you can deepen your relations with other partners.
  11. Be proud of your partnerships and publish them on your Web site. CIOs love when specialized companies demonstrate willingness to work together, and this will help you win customers.
  12. Be generous and don't always strive to maximize profits. Instead, ensure that both parties are happy in the long run.
  13. Be faithful and don't sideline your partners or reduce their abilities to earn money within the relationship. I've seen multiyear engagements where one party felt that the company that made the sale is getting too much money from Year 2 and wants to cut the margin to zero. This is a bulletproof way to end a partnership as it demotivates building a business together.
  14. Evaluate your partnerships on a yearly basis and retire relationships that do not work or where you see little strategic value. The portfolio of partnerships needs constant nurturing and sometimes you need to make changes. Those changes are less painful and dramatic when you're annually evaluating how your partnerships align with your business goals.
  15. Capture your partnership arrangement on paper. This doesn't need to be complex, but you should document how you're working together and what the expectations are on both sides. And please review it together with your partners at least once a year.

Good luck, and please reach out to me and share your stories!

Posted by Per Werngren on December 21, 2020 at 7:21 AM0 comments

Business Modernization from COVID-19: Service Desks, Automation and More MSPs

Remember when your customers had offices filled with workers and everyone had a PC on their desks? Remember when people met in person and the computer room in the basement hosted all the servers?

Most systems integrators (SIs) and value-added resellers (VARs) had a viable business with support staff onsite taking care of people and systems. Most SIs and VARs did a blended delivery, where only some of the support was delivered from a central service desk. Their livelihood was to sell hours in different packages. The Microsoft Office experience was delivered through local Exchange and SharePoint servers -- though, of course, many customers had made the switch to Microsoft 365.

It was a mix of offsite and onsite, and that worked out well for most. The ones with most of the services onsite had, of course, a much lower margin than the ones that leaned more offsite with processes handled by a skilled service desk.

But then came COVID-19, and since March nothing has been the same. Our customers no longer have staff working onsite and meetings are held digitally from the comfort of our homes. Customers are also less interested in having staff from external companies running around in their offices.

A significant consequence of COVID-19 was that all partners with a workforce of onsite support engineers had to let people go. That is always a tough decision. But when you need to choose between saving your company or keeping redundant staff, the choice is often easy to make, although it might be emotionally hard.

Perhaps we can see a distant light at the end of the tunnel even though we are not yet in the clear, as the pandemic is entering another wave. But our society has changed, business life has changed, and some of the changes mean that our businesses need to also change.

I think that this is a great opportunity for SIs and VARs to reposition their businesses and make a giant leap into something that is more modern and better-positioned for the new normal. That means that you should absolutely not go back to sending out support engineers to your customers because most, or at least a significant portion, will work from home. And to be honest, the profitability was never good, anyway.

Instead, take the opportunity to ramp up your service desk. One common mistake is to add lots of people to a service desk. My advice is that you should instead automate lots of tasks by having great support systems. That will keep your headcount down and profitability up. It starts with a system for support-ticket handling, where customers don't need to contact you by phone. Instead, they should be able to resolve lots of tasks via self-service. If they need to speak to an agent, you should encourage them to do it over chat or e-mail, as that will help you better balance your agents' workloads and increase both customer and employee satisfaction.

Taking care of servers and applications should also be done by a centralized team that might be part of the service desk organization. If you are a larger SI or VAR, you might want to split into several teams where each and every one is specialized on a certain area like servers, communications or apps for certain verticals. My advice for smaller partners is to be careful to split into multiple teams, as that always drives cost and you will need to be at a certain size for it to make sense.

This is also a golden opportunity to decommission your customers' server rooms and move workloads to Microsoft Azure. Because your customers' employees are mostly working from home, it is paramount that you enable remote access at scale, which is so much easier and more cost-efficient when you have everything in Azure. The new Azure-based Windows Virtual Desktop (WVD) is a great example of new technology that enables remote scenarios.

Taking your customers on this journey will be great for your business and will also future-proof your customers, as they will be much more agile and can more freely add apps delivered as Software as a Service (SaaS). This starts with a high-level discussion between senior salespeople and probably the CIO/CTO at your customer, and you need to make sure that you're well-equipped to have discussions like this.

The goal should be that all your customers get their workloads in the cloud, preferably Azure if you're a Microsoft partner, and that you service all users from your service desk without sending out support engineers. If you make this journey, you will be rewarded with higher margins and -- because you're no longer an SI or VAR, but instead a managed service provider (MSP) -- this will significantly increase the value of your company because buyers love a business with recurring revenue so that they can sleep well at night.

Posted by Per Werngren on November 05, 2020 at 9:44 AM0 comments

Giving CIOs What They Need, Part 2

In Part 1 of this series, I covered the way the CIO job has changed and how partners can best help CIOs succeed in delivering on business objectives rather than just on technology objectives.

Now that you know the big picture, here are some thoughts for low-hanging fruit:

  1. Avoid risky and costly large projects that take ages to fulfill. Aim for smaller projects that support your long-term roadmap (and make sure that you actually have a long-term roadmap).
  2. Create a roadmap for all applications and make realistic plans for replacing as many bespoke and customized applications as you can. Make sure that your roadmap has a timeline! Aim to replace them primarily with modern applications provided as SaaS and secondarily as modules that are part of larger systems. Consider apps built with the Power Platform (currently Power BI, Power Apps, Power Automate and Power Virtual Agents) and integrate with Teams. Reducing the number of applications saves cost and modernizing with agile tools will increase competitiveness.
  3. Consolidate databases so that they need fewer virtual machines (VMs) and consider using SQL as a Service (or some other database as a service).
  4. Implement business intelligence and provide great dashboards to the business. It does not need to be fancy, just relevant, and with fewer systems and databases, it becomes easier to accomplish as you will not need to connect to a large number of data sources.
  5. Make a timeline for decommissioning servers on-premises and servers in external datacenters. Replace the servers with VMs and containers in Azure. Try to shrink the footprint by adopting SaaS as much as possible. You really do not want to operate physical infrastructure if you can avoid it, and Azure is a great virtual datacenter that is second to none.
  6. Reduce the number of vendors and go for "better together" rather than "best of breed." This will reduce the number of isolated systems, reduce the need for integrations and reduce the problem with vendors blaming each other. All of that translates to higher efficiency and lower cost.
  7. Make sure that you use processes and that they are documented and well-known. Update the processes as needed so they reflect reality. This will reduce dependency on certain individuals when generalists can handle tasks that were previously given to specialists.
  8. Audit your security on a regular basis and have processes in place for always updating your systems. Remember that cybercrime is a reality and it is only a matter of time before you are attacked.
  9. Test your backups on a regular basis so that you know that you are covered and can read back data within a reasonable time.
  10. Handle less yourself and rely on partners as much as possible where you pay for performance rather than hours. Aim for partners that are highly specialized and that have a proven track record of being able to work together with others. Stay away from partners that want monopoly and say that they can do everything.

Posted by Per Werngren on September 22, 2020 at 7:59 AM0 comments

Giving CIOs What They Need, Part 1

Despite the ongoing coronavirus pandemic, we still need to be there for our customers and give them strategic advice. And perhaps this is more important now than ever.

If I were a Microsoft partner working as a strategic advisor to CIOs, here is what I would like to talk to them about.

The job of CIO has changed. A modern CIO knows and supports the business. The more integrated and closer to the business the CIO is, the better he/she will deliver on the business' goals. Make sure that you know what the business needs before they ask you (or go elsewhere). Be proactive and suggest how IT can better support the goals of the business.

A big and fundamentally game-changing trend that we have only seen the beginning of is robotized automation of all kinds that is driven by artificial intelligence (AI), machine learning and deep learning. This will revolutionize companies and help them to gain efficiencies by having fewer people involved. If you have never heard about this before, then I suggest you get up to speed because this is a true game-changer. Helping your CIO with this journey will make both you and your client heroes in the C-suite and Wall Street, but perhaps not win friends within labor unions!

As a strategic advisor, it is paramount to put your client first and your own business second. And that approach will indirectly benefit your own business in the long run.

You should help the CIO find the best partners for each specific need, and your network of trusted partners should be your most treasured asset. Helping the CIO navigate and find the right partners for the right job is where you can bring true value.

Technical skills are, of course, important when finding the right partner, but almost equally important is to find partners who are team players. Partners that are willing to work with others and that have a proven track record of being able to do so should, in my opinion, be prioritized. I have seen a few that have lacked the ability to work with others, and that always ends badly and does not give the customer the value that is expected and rightfully deserved.

In Part 2 of this series, I'll offer 10 low-hanging fruit ideas for delivering what your CIO customers need.

Posted by Per Werngren on September 15, 2020 at 8:17 AM0 comments

10 Key Coronavirus Measures for Microsoft Partners

Getting employees working from home or at least in widely separated sections of the office, leveraging Microsoft Teams and watching your cash flow like a hawk are among the key measures to weather this pandemic, says channel community leader Per Werngren.

With the coronavirus affecting us all, both in our professional and our personal lives, it is important for Microsoft partners to take proper action in order to not fall victim to this crisis.

We need to take care of each other: our employees, our customers and our fellow partners. We compete every other day with each other, but right now is the time to be generous and help those in need. Don't try to make the coronavirus an opportunity to steal business from each other -- we're better than that and united we stand as a community.

The financial impact will probably be harsh. Partners that are selling hours and projects are facing severe challenges when it comes to selling new projects and delivering on existing projects. All this will have a negative impact on billing and cash flow.

Partners that have a large portion of recurring revenue will not face challenges with billing but will instead face problems with delivering their services if a large portion of their workforce becomes unavailable. Closely watching cash flow will be key to survival -- if you run out of cash, you will most likely run out of business.

Here are my 10 tips for what to do:

  1. Encourage your people to work from home if their role permits. Try to find solutions so that as many people as possible can work remotely.
  2. Encourage your people to stay at home if they get any kind of infection, and don't stop paying their salaries if they're sick or in quarantine. You absolutely don't want them to risk infecting others so they should stay at home, and it should not be a financial decision.
  3. Try to split teams that need to be in the office and locate them in two different locations or at least on different floors. If someone gets infected, you will still have half of the team in production.
  4. Split the senior leadership team in two different locations if they cannot work from home.
  5. Run daily briefings over Microsoft Teams so that you maintain a sense of community. Don't be shy about using video; it lets you see how everyone is doing. It is important to show leadership and keep your team actively engaged.
  6. Reduce all non-essential travel and don't visit customers in-person. This is a great opportunity to leverage Teams for all your meetings. By leading by example, you will probably also seal some new business related to Teams.
  7. Talk to your bank as soon as possible about extending your credit lines. Tell them that this is part of your contingency planning.
  8. Talk to your vendors and landlords and say that you don't have problems today but that you're preparing for the worst and taking precautions, and ask if they can prolong payment terms.
  9. Stop all investments if they give you a short-term negative cash flow, unless it is really essential and mission critical.
  10. Make sure that invoices to customers are being sent out as early as possible. You can probably increase the pace a bit. Pay close attention to customers that are late with payments and try to negotiate payments in part if they cannot pay the full sum at once. Actively watching your cash flow will be very critical.

Together we're strong. Together we will prevail.

Per Werngren is an RCP contributor who has held many roles at the worldwide level of the International Association of Microsoft Channel Partners (IAMCP), including chairman and president.

Posted by Per Werngren on March 17, 2020 at 11:38 AM0 comments