Last week Microsoft announced the new Microsoft Partner Network at their Partner World Conference in the US.
As Waldo wrote in his blog post, then one of the changes is that Microsoft now requires more people and more certifications from their partners, if they want to continue to be the “best of line” partners, what they used to call “Gold Partners”.
But there are other changes than new requirements toward certifications and number of people.
In the material sent out by Microsoft they state these three goals as the primary reason for their changes:
1) Triple the average customer adds of our VAR Partners 2) Triple the number of ISVs and VARs gaining >50% of their revenue from packaged, repeatable vertical solutions 3) Increase the average operating margin of our Partners by 50%
This all sounds good, and one of the things they want to do is to grow their partners. Partners with 20, 40, 60 people must grow to 80, 120, 150 people.
They are also introducing minimum annual revenue requirements (I know this did already exist in some markets). And the a partner holding the “Advanced ERP Competency” badge (the new Dynamics Gold Partners), then 85% of their customer must renew their annual service/upgrade plan.
All in all a plan where Microsoft wants bigger partners, who is able to sell a lot of packaged software.
In this plan then I’m really missing the customer and the customers expectation towards the unique solution customized to their special needs. Instead Microsoft want to have highly specialized industry specialists.
But where are the small partners in this picture? The partner companies with 2-3 top consultants, who have been working with Navision or Axapta for years and are doing a great job delivering superior service, but not selling too much software?
Well as I read this, then these companies can either grow, merge with another partner or find something else to do. Basically these smaller partners are now sailing in the same boat as the freelancers have been doing for years. Microsoft knows that we are here, but they really don’t care too much about us, as long as we are not selling their software. It doesn’t matter that we are making lots of customers very happy about their software.
But what do you think?
It is clear – Microsoft wants to deal with larger partners. I absolutely understand why they want do this but have small concern for strategy.
First of all – they can archive there goal – partners will be bigger and it will be less of them. Small partner can get only 20% discount when Large can get 60%. Small partners will not be able to compete. But good thing partners do not need to compete. The revenue will be counted worldwide - this mean that multiple solution centers from different countries can form alliance and use shared revenue toward discount and be completely independent companies.
Most likely such alliances will be formed around Companies with Vertical focus. It make a lot of sense for somebody like “LS” create affiliate in every country where there have partners and ask partners buy through there affiliate – so everybody can share the same discount.
Very soon few “consolidation” companies will be created who will offer shared discounts for small fee – and this is good for community but I do not understand how Microsoft will benefit from this.
My offer for the community is: “Our Company will pick up your customer if they decide stop paying Microsoft Support fee… We will also sign that we will never work with them so you can still keep all support revenue. If they decide to resign contract you can take them and it will be counted as your renewed customer and we will share 10% at time of renewal. This will guarantee that you will have 100% customers renew their license and you can have additional 7% on your paying customers.”
My guess that short term result will be less partners who buying license from Microsoft but the same number and size of partners who implement them. But partners will get better discounts. So – thank you Microsoft – at the end your result will be achieved just because partners will have more money to invest into solution.
In addition – for all freelancers – if you need sell software you are always welcome – you will get complete discount.
Yes it's been in the planning for quite a long time, I'm just afraid that it will hurt them in the long way. Especially in countries like Denmark where we have tons on partners with 5-15 employees.
It has been made clear at the last Directions conference. They only want to deal with large partners, they don't want to deal with small partners.