One of the core building blocks of Microsoft’s success over the past decades has been its close relationship with partners. The Microsoft Partner Network (previously Partner Program) has helped Microsoft reach (via their partners) every conceivable sector of the myriad markets they service. And in return, Microsoft was known to be very loyal, supportive and even protective of its partners (there’s even books written on how to best work the relationship).
But that’s been changing over the last few years. Resellers are feeling the pain the most I expect, as Microsoft opens up its own retail stores, experiments with subscription models and grows its online sales channels (Microsoft Office for example makes a sizeable proportion of its revenue directly from consumers, especially those who download the 60-day trials and then buy an activation key). Hosted services are next in line, with Microsoft price-cutting its way to market dominance –> bad luck if you are a reseller trying to make a buck there.
ISVs aren’t immune and will increasingly have to look over their shoulders as their segments get taken over. Anti-virus is an example perhaps (financial software isn’t :-)) , but the real danger is if you are a partner ISV in the health or educational sectors – be very careful.
Microsoft based consulting companies should also be wary (unless you’re at the big end of town), as they find themselves competing more with Microsoft’s own consulting services and partnerships – entities that are continually scaling up.
Is this wrong?
Is any of this wrong? Or unexpected? Of course not. Microsoft is a business with demanding shareholders and strong competition from other vendors. It needs to push ahead.
So, this isn’t a note to criticise what Microsoft are doing – in fact, some would say it’s been too long coming.
But it is a wake up call to Microsoft Partners. Be wary of counting on continued loyalty from Microsoft in your particular market.
Craig,
I have been a Microsoft partner for many years, until this year where I did not renew as my partner account manager never called me in 12 months, guess they had more important and valuable partners to talk to. Its a shame to see a program that I loved for many years being mortgaged,but it made me lots of money over the years so I cant complain :)
The good news is though the newer programs such as bizspark and webspark are far more real without all the marketing spin of “working together” that you got at partner events. So I say out with the old and in with the new.
– James
Craig,
I have been a Microsoft partner for many years, until this year where I did not renew as my partner account manager never called me in 12 months, guess they had more important and valuable partners to talk to. Its a shame to see a program that I loved for many years being mortgaged,but it made me lots of money over the years so I cant complain :)
The good news is though the newer programs such as bizspark and webspark are far more real without all the marketing spin of “working together” that you got at partner events. So I say out with the old and in with the new.
– James
Interesting observations @craigbailey (and comments @jamesmcc) on Microsoft's Business Partner program. [blog] http://is.gd/4LHgS
Interesting observations @craigbailey (and comments @jamesmcc) on Microsoft's Business Partner program. [blog] http://is.gd/4LHgS
James, I agree the newer programs are excellent, but are probably more aligned to newer (or at least msaller) companies.
Given that the Partner Network has just been through a big restructure (and rebrand), Microsoft obviously still has plans for it – it’s going to be interesting to see how they now push it.
I’ll be especially interested to see how the Developer Evangelism teams adjust, given that some of their deepest and most lucrative relationships have grown through partners. Partners who may now feel as though the corporate entity is turning its back on them…
James, I agree the newer programs are excellent, but are probably more aligned to newer (or at least msaller) companies.
Given that the Partner Network has just been through a big restructure (and rebrand), Microsoft obviously still has plans for it – it’s going to be interesting to see how they now push it.
I’ll be especially interested to see how the Developer Evangelism teams adjust, given that some of their deepest and most lucrative relationships have grown through partners. Partners who may now feel as though the corporate entity is turning its back on them…
@frontier2000 @Joel_Leach /Congrats/ Have you seen this: http://tr.im/E8Eb? Doesn't really sound like it'll effect you in your market.
@frontier2000 @Joel_Leach /Congrats/ Have you seen this: http://tr.im/E8Eb? Doesn't really sound like it'll effect you in your market.
Good point, Craig – I think there are a number of industries who should be wary, but in many areas, I think MS is recognizing that they don’t hold all the right cards for various consulting. A client of mine is partnering with MS Consulting on a CRM Accelerator. I think there’s a number of areas where MS has shown great interest but then not succeeded (as you noted with financial programs) and subsequently dropped out. I think Sharepoint add-ons is a big area as well. MS has tried to push forward on using Sharepoint as a Document library for CMS and there are a number of add-ons for that purpose in what is already a fairly large industry. Will it succeed? Hard to know.
My good example is when MS tried to get into hosting with bCentral. After four years, they dropped out, despite having some very good tools for small business, leaving many of us (yes, we used them) without a true solution. Now we have a hodge-podge of separate solutions. Can you rely on MS for a hosted solution? I’m not sure as MS seems to do it more for demo or trial purposes rather than a real solution.
While MS may come out with a health care solution, I think they will turn it into an opportunity for partners to build accelerators (or something along those lines) where the real subject matter experts can offer their wares. We’ll see.
Thanks Andrew.
It’s true that Microsoft is pushing the Add-on path for Partners (ie don’t build your own platform – instead build add-ons for ours) and ISVs may be safer there. But it also adds risks – because it is much easier for Microsoft to copy an existing add-on in a future version of their product and undermine a partner’s offering. I agree that this isn’t usualy MS behaviour though (although companies like Xobni should be wary).
In the hosting space, I think it is only going to get more cut-throat for resellers. Microsoft is not competing with the hosting companies, but their cloud strategy will likely remove the need for traditional hosting in many areas. And whilst they will certainly be providing reseller models for their Azure products, the margins are so small that only the big partners will survive – they’ll require huge volume just to make a profit.
As you say, I think Microsoft’s Amalga and HealthVault solutions will be good platforms for developers to build on, but it is definitely eroding an existing market (ie partners who have built health platforms) that partners have been involved in.
In the end though, it is just a changing of the model. Microsoft needs to adapt to survive. And Partners need to do the same.
Good point, Craig – I think there are a number of industries who should be wary, but in many areas, I think MS is recognizing that they don’t hold all the right cards for various consulting. A client of mine is partnering with MS Consulting on a CRM Accelerator. I think there’s a number of areas where MS has shown great interest but then not succeeded (as you noted with financial programs) and subsequently dropped out. I think Sharepoint add-ons is a big area as well. MS has tried to push forward on using Sharepoint as a Document library for CMS and there are a number of add-ons for that purpose in what is already a fairly large industry. Will it succeed? Hard to know.
My good example is when MS tried to get into hosting with bCentral. After four years, they dropped out, despite having some very good tools for small business, leaving many of us (yes, we used them) without a true solution. Now we have a hodge-podge of separate solutions. Can you rely on MS for a hosted solution? I’m not sure as MS seems to do it more for demo or trial purposes rather than a real solution.
While MS may come out with a health care solution, I think they will turn it into an opportunity for partners to build accelerators (or something along those lines) where the real subject matter experts can offer their wares. We’ll see.
Thanks Andrew.
It’s true that Microsoft is pushing the Add-on path for Partners (ie don’t build your own platform – instead build add-ons for ours) and ISVs may be safer there. But it also adds risks – because it is much easier for Microsoft to copy an existing add-on in a future version of their product and undermine a partner’s offering. I agree that this isn’t usualy MS behaviour though (although companies like Xobni should be wary).
In the hosting space, I think it is only going to get more cut-throat for resellers. Microsoft is not competing with the hosting companies, but their cloud strategy will likely remove the need for traditional hosting in many areas. And whilst they will certainly be providing reseller models for their Azure products, the margins are so small that only the big partners will survive – they’ll require huge volume just to make a profit.
As you say, I think Microsoft’s Amalga and HealthVault solutions will be good platforms for developers to build on, but it is definitely eroding an existing market (ie partners who have built health platforms) that partners have been involved in.
In the end though, it is just a changing of the model. Microsoft needs to adapt to survive. And Partners need to do the same.