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Tellme Bucks Microsoft SaaS Trend

This week's announcement at the Worldwide Partner Conference of Microsoft's partner model for its Software Plus Services initiative has led to a fairly predictable freak-out among partners.

But if the mother ship's S+S model seems to wrest control of customers away from channel members, little Microsoft satellite Tellme's budding partner program leaves partners firmly in control of their accounts. Microsoft bought Tellme, a SaaS telephony company, last year, and the little principality of Microsoft's great nation still has a fair amount of independence. It's even headquartered in Mountain View, Calif., rather than in Redmond.

What Tellme didn't have until this week was a partner program. It sold its hosted phone systems directly and mainly to really large companies -- think American Express and FedEx. Enter the affable Bob Crissman, longtime Microsoft Partner Program veteran and now general manager of Tellme's partner program. Crissman's building a channel for Tellme, and he's keeping partners at the forefront of the effort.

"For partners to pay attention to Tellme, we want to make sure we have a compelling model for them," Crissman told RCPU at the WPC. "They own the customer relationship. They get the professional services revenue upfront."

Here's how it works: Microsoft wholesales phone minutes -- basically the commodity in this business -- to partners, who in turn mark them up and sell them to customers. Beyond that, partners have plenty of opportunities for customization and service. And, partners own their accounts -- they do the billing, the upselling, the bundling -- unlike in Microsoft's S+S partner strategy.

"[Partners] get the professional services revenue upfront," Crissman said. "The partner is going to realize a revenue stream from that over the life of the agreement."

The deal's great for systems integrators, Crissman said, as well as for companies that have expertise either in phone systems or in speech applications -- the latter category of partner could, for instance, speech-enable a CRM system so that salespeople could update their systems over the phone rather than via a keyboard.

Crissman said that Tellme has a lot of autonomy from Microsoft and that he never really talked with the mother ship's SaaS folks about their partner strategy. Maybe, though, Microsoft should pay attention to what Crissman and his folks are doing.

Sure, it's not an apples-to-apples comparison -- Tellme's looking for 30 or 40 partners and now has one (SpeechCycle), while the Microsoft SaaS effort will involve at least tens of thousands of partners -- but Crissman and his team seem to have found a model that will work well for everybody involved. And shouldn't that always be the goal?

Posted by Lee Pender on July 09, 2008 at 11:54 AM


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