Angry Birds: The Microsoft Partner Edition

Microsoft
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I’ve been in this business for roughly 15 years. Throughout that time I have been a Microsoft Partner (various levels), Microsoft Most Valuable Professional, Microsoft Certified Systems Engineer (various levels and specialties) and overall based a large chunk of my business on the Microsoft platform. I have many friends around the world that work at Microsoft and I’m also a shareholder. In short, I’m familiar with their business model.

Some of you seem to be new to this so I’m going to help you out.

Over a decade ago Microsoft was an arrogant company that was prosecuted around the world for the criminal abuse of their monopoly. Thankfully they had enough attorneys and money to wiggle out of many steep penalties and restrictions but in a nutshell Microsoft thought it was well within their right not just to demand their software be installed on the new PCs, but that no competing software be installed. It undercut it’s competitors on the commercial side, gave software away for free to squeeze others out and launched many misleading and false campaigns (Google FUD) in order to discourage people stuck in their monopoly from even considering everyone elses software. Thanks to the global prosecution at the time, Microsoft couldn’t do the ultimate Hailstorm hat trick: force the Internet into Microsoft’s proprietary formats, protocols and authentication standards. So the Hailstorm died and Microsoft is a better company as a result of it, right?

Well. Sort of. Sort of the exact opposite. The exact same people are still managing the company.

Microsoft, for as long as I’ve been following them, takes on it’s competition in the most infantile way as possible.  They don’t do this out of lack of respect or maturity, they still own nearly 90% of the market and majority of the browsers, game consoles, office software (the list goes on). They view every bit of innovation as a threat to their immense monopoly on business computing and rightfully so.

Now, if this is the way they have behaved for years, do you think they have learned something valuable over their insistence of eliminating any potential third parties from their ecosystem? Or do you think they act like a little kid that got beaten on the playground and is trying to come back years later seeking revenge?

Microsoft 4.0: We’re all in… and there is no room for you.

When Microsoft launched BPOS, many of the partners took great offense to being nearly completely cut out of the pie. You can play in the Microsoft cloud, but you only get 6%.

Then Microsoft cut the cost of those services. Woops, so much for making money with Microsoft’s cloud.

But it get’s better – some of you were delusional enough to go on with the illusion that you may one day be able to bill the customers.

Folks… this is why you need to go to Microsoft Worldwide Partner Conference (or at least watch it on the web) if you want to hear the direction of the Microsoft business straight from the horses mouth. In this case, Steve Ballmer characterized the importance of Microsoft Partners concerns about the cloud as eloquently as he usually does “And I’m sure I will be hearing from you this week about the comissions, billing, account control, blah blah blah”

Dig to find the least effective liar

I am not necessarily the CEO of a company because I am the most skilled manager or the most skilled developer or the most amazing leader.

I am the CEO because I can speak for 2 hours and say absolutely nothing.

It pisses my staff to no end. They get called on every mistake or statement they make. I speak for 2 hours, promise stuff (that I later find out doesn’t exist) and have people apologize to me when they can’t find it. It’s a superpower, OK?

You get your feet put into the fire enough times and you learn how to avoid it.

CEO’s, COO’s, CFO’s and other CxO officials are phenomenal liars. At some point in the past they were honest – and man, people HATE getting bad news. So to find out what is really going on, you need to dig deep. Find that binary sales idiot that is just repeating whatever they are fed by the upper management and there you finally get some clarity about what is truly going on.

Wired has had spectacular coverage of recent Microsoft missteps.. First about how Microsoft is blatantly violating it’s own licensing agreements to help former managers that ultimately sell the businesses back to Microsoft – if you look back at the history of Microsoft, they took a lot of flack for giving away Internet Explorer for free. So a former executive branches out, violates Microsoft licensing to gain VDS popularity on the iPad until Microsoft get’s to publish it’s own Office for the iPad. That’s not anticompetitive, that’s downright genius.

Wired followed up the post with more angry partners (please read the whole blog post here):

I was recently at a conference for technology solution providers, put on by an industry association. There I was sitting at a roundtable near the front. To my left and right were executives of managed service providers (MSPs), internet service providers (ISPs) and others, but the real action was directly across the table, frothing at the mouth. It wasn’t a rabid dog, it wasn’t a sports fanatic describing a huge loss — it was a Microsoft sales rep.

After listening to the backlash from the executives, the rep finally reached his boiling point, when the question was asked, “When are we going to be able to start billing our clients directly for Office 365?” His eyes glared back at us, his face turned red in anger, and with a firm voice, he blurted, “never, it will never happen.” Emphasis on the never was hard to mistake.

Any questions about where partners exist in the Microsoft cloud?

We have a saying in Texas.. Fool me once.. shame on me.. Fool me 8 million times..

{ Note to self… Vlad, come back to this part of the blog post and find better wording for “complete morons”.. something like “cloud specialized Microsoft partners”. }

Still, shame on you.

But we can make money in integration…

Shame on you.

But we don’t really like to bill anyhow, or the liability, or the support..

Right, because your clients are going to love you so much as their advisor when the stuff blows up as it does nearly every quarter? Shame on you.

But the money is not really in the licensing, it’s in the support..

Shame on you.

I really don’t know any more insulting words that I can share with you than those that Microsoft is apparently shamelessly issuing from Ballmer all the way to regional sales guys.

The shame really is on you – because Microsoft should not be blamed for any of this, not one bit. They are just trying to provide the best product at the best possible price and they are quite clear that they do not want you in it.

Any illusions you may have towards any future you have in the Microsoft cloud is your own fault, not that of Microsoft. Microsoft is responsible to it’s shareholders, not to you. And whatever amazing value you think you bring to the equation – well, it’s just facilitating your death faster. Because whereever you think you have an opportunity in the Microsoft ecosystem, you are dealing with a Microsoft client that they want to control – like Apple does – from the way they do business, sell you a mouse, phone, songs – everything your clients digital paws touch.

That’s it. End of story.

For my American fans.. Much of our disenfranchised population believes that we are slowly sliding down as a society and an industrial power because we don’t make anything anymore. We just outsource and import. This is the same thing. If you are making a solution, the most recognizable part of that solution better be you. Everything else should come secondary.

Or you can just pick better partners.

I work with Microsoft. I do so because they have the best software. But when I sell my products and solutions, Microsoft isn’t even in the top 10 reasons why they ought to buy my stuff. If you cannot differentiate yourself enough it’s a good indication that you will eventually be displaced by your partners. So pick your friends better and plan your business to be something more than an easily replicated service.

5 Responses to Angry Birds: The Microsoft Partner Edition

  1. Philip Elder says:

    Reality is such a harsh mistress (twist on Heinlein’s Moon is a Harsh Mistress).

    TANSTAAFL!

    A keen eye and hard work will always be rewarded. 🙂

    Philip

  2. David says:

    The erosion of the market does suck. Just like the days of making a several hundo just for slinging out a basic PC. The market forces that change because VARs just became Rs over time. There was no value add on a PC. Similarly, the VA for cloud hosted and backup services are eroding… fast. Microsoft is having to respond to services like Google Apps if they are to survive. Not that those products really hold a light to the MS Stack, but the average person just sees email and word processing on the surface. VARS need to move up the food chain. It’s as simple as that. We know it’s a tough industry. No free lunches. Competition from top, bottom, and all sides. Sharpen up those business skills and get to work finding other products and services that are VA still. Niches, verticals, horizontals, etc.

  3. Vlad Mazek says:

    I tend to agree more with Philip than David – mostly because Microsoft Partner population has been trying to “move up the stack” for years just to see more and more frustration along the way with the exact same results – Microsoft is moving up the stack too while absolutely obliterating the bottom of the stack.

    Inconsistent product portfolio may be attractive in infancy, but when you start hiring people, having to retrain them and attempt to market 50 different things it becomes an expensive exercise in minimizing noise. Been there. 🙂

    For small IT providers the question (seemingly always) is what does the client value the most and stick to marketing the heck out of that while not really talking about Microsoft or Google or anyone else that wants your pie.

    -Vlad

  4. Denis Wilson says:

    It is difficult for me to make out Microsoft as the evil empire. They are doing exactly what we would do if we had the resources and sales volume. Bitching about evolution is the marketplace (remember the buggy whip manufacturer) is a colossol waste of time. If you would like to create something that you can leave to your children, infuse it with value and a tenacious will to thrive. A voracious work ethic is irreplaceable; a you stil may get stepped on. Get over it!

  5. Philip Elder says:

    Ping back:
    http://blog.mpecsinc.ca/2012/03/some-thoughts-on-changing-times-in.html

    As much as things “change” things really stay the same.

    As mentioned, ask the buggy whip manufacturer. They probably stayed in business but only in Amish areas of the country! 😉

    It is ultimately up to us to be aware of what the SMB/SME market is up to and apply ourselves on the leading edge.

    This gets a bit expensive in time and money, but in our case the investment on this round of R&D is actually starting to pay off!

    Philip

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