Why is it that people only seek to open up the community channels, ask for feedback, have an ongoing conversation and attempt to win hearts and minds after they have launched a nuclear assault?
In case you have been out for the past week, last week Microsoft made an announcement that due to the pressures in the marketplace from Google, Apple, SalesForce and others it has to change it’s business model to be direct with the customer. While traditional business model will still be there, Microsoft will push for more and more direct business.
On the face of it, this is nothing new as Microsoft has already competed in consulting with Microsoft Consulting, as well as direct financial and licensing relationship with the customers with Software Assurance and Microsoft Financing. The new angle in the conversation pertains to the Microsoft offering ongoing services to the client which rightfully entitles them to fully managing the client, marketing solutions that compete with the current technology or support provider, bringing in their preferred partners instead of the ones currently in the account, etc.
Was Microsoft simply foolish when they came up with the S+S model that effectively destroys their partner community? Microsoft is a lot of things but they are not fools. In the process of pricing and designing services you look at what your competitors are doing.
I was put through the same cycle of advisory blindness when Google purchased Postini. “But boss, they are advertising their prices on their homepage with one-click purchase, can’t we do away with the partner program application?” In short, no, because we are a partner company. Somehow people failed to remind Microsoft of that when they me S+S ed up their strategy. I’ll tell you exactly what they did – they looked at the Google Apps or SalesForce and thought:
“You know what, instead of pushing this through Volume Licensing that requires a lot of paperwork why don’t we just do what Google does and we’ll even one up it, we’ll give them 6% commission for just doing the referral. Let’s face it, nobody that is interested in this will work with the partner anyhow, and they get a few bucks out of every conversation so we can go direct and be partner friendly at the same time!”
Where Microsoft lost it’s partner community in the me S+S is in the fact that we know their business and their business practices better than they do. We know how Microsoft markets. Sign up for a few newsletters and they give you a few more. One group pushes another and the TechNet subscription offering with an enticing free software offer comes up in the sidebar. Soon even Microsoft Action Pack and MPAN find their way into the newsletter. Coincidence? No, just trying to break into the account with a Microsoft solution. Genius. Want to see how this plays out for you when you recommend or offer Microsoft solutions?
Microsoft owns the client. They need to stay in touch with them and offer them valuable services of course. Why not use the opportunity to upsell?
Click here to buy Vista Ultimate, now 30% less!!!
Partner just lost a licensing deal. Microsoft should also be an active participant in the community. So it should naturally invite it’s customers to local events where material can be tailored for the customer that is not managed by a partner.
See how easy customizing CRM is? Let’s do a quick marketing blitz!
Partner just lost on the advisory fees, consulting and perhaps further sales. But what is the ultimate exit?
Growing? Need local servers? Need managed services? Want help with migration from Lotus Notes or SalesForce? Well check this out, our partner locator. Which ZIP code do you live in sir?
Quick question, who climbs to the top of the partner locator? The partners who take clients best interest and recommend software and solutions that make sense and not ones that collect the most PAM and Microsoft Partner Program Points? Good night.
Let me repeat: Microsoft is not a fool. They know what they are doing. They likely have a ton of metrics and numbers to justify the fact that the SMB consulting space should not exist beyond a certain level. To an extent, I agree with them in that and have written extensively on how you can avoid falling into the dinosaur herd.
Microsoft made a fatal mistake in it’s direct approach because it showed it’s hands.
No number of adjustments to the course is going to make partners feel easy about the long-held suspicion that Microsoft is after our clients. They just came out and confirmed those fears, laid down the rules of the game, pegged the partner value at 6%, dictated ownership of the client and the right to do with them as they please.
Where does this leave you? Well, you could jump the crocodiles from one solution after another and hope to stay one step ahead of Microsoft as they move all their applications to the cloud and make the on-premise or partner solution unprofitable or unjustifiably expensive.
Does the significance of the problem make sense to you yet?
Does it now make it painfully clear why I’ve written so many sharp articles bashing the mindset of SPF and riffraff? Did you listen to me all this time that I’ve been waning you about the impact the SMB space will feel as the complexity of the solution spectrum goes away? Do you now understand the value of having a business over a specialty and a passing hobbyist interest in making a sustainable wage without taking it seriously? For your sake, I hope it did. You may not enjoy every picture and agree with everything I say, but if I were out to screw you do you really think I would waste all of my time talking to you about it? How do you like me now? Still afraid to call and talk to the big bad evil Vlad? Have you made your decision yet cause the clock is ticking… the only thing that has changed is that you don’t have to blindly trust me anymore because the cards are on the table.