I guess it’s no surprise, that 90% of my blog readers are Microsoft Partners. Most of them, operate in the same space that we do: Dynamics 365. From that, I can also assume that most of my readers were on the Executive Briefing calls last week. So what did we all learn?
The Glue Layer
I have written much in the past about how Microsoft has been launching more new capabilities faster than the North Koreans launch missile tests. Many of these new capabilities were chunks of brand new technology, stood up adjacent to existing things we do every day. While created by computer scientists and crackerjack developers, it required an almost similar level of skill on our part to incorporate some of them into our customer deployments. Last week, a lot of what we saw was Microsoft taking much of this awesome technology and gluing it to the products. Many new stitches were applied, leaving a lot fewer for partners to have to figure out. If an Azure ML algorithm falls in the woods, does it make a sound? It does now.
Let those with big budgets rejoice!
Even though Microsoft has pulled all of this awesomeness closer together, leaving only a stitch or two for a partner to fully realize it’s potential for a customer, awesomeness will not come cheap. A stitch here, and a stitch there and you have activated a universe of possibilities for a customer. But which customer? Which of your customers could actually realize the full potential, or even a fraction of the potential, of all of this power? Which ones have enough smart people to interpret the flood of new capabilities, and decipher it for their particular business? Which ones have the capability to actually “act” on it? The big ones.
Looking through SMB Glasses
In my last post, I suggested that too many partners will look at the new Business Edition limitations through their Enterprise glasses. For some of us, myself included, I am looking at many of the unlimited Enterprise capabilities through my SMB glasses. Right now those glasses are pretty fogged up. Like all of us watching the roughly 15 hours of stuff that was thrown at us, most in small teasing chunks, I found myself alternating between either riveted, or writing email on my other monitor. For every new item that would come up, I would watch long enough to determine whether this was something an SMB customer would want, or not. For example, about 90% of anything with the word “Insights” in it, sent me back to writing emails. I no doubt suffer from Enterprise Envy, but I am also a realist.
Feeling Sorry for Enterprise Partners
I would guess that about 80% of what was revealed was enterprise focused, and with each of these items, I found myself breathing a sigh of relief, and thinking “Thank God I don’t have to figure that shit out“. But then I would think about my Enterprise partner friends like, Joel Lindstrom, Chris Cognetta, Shawn Tabor and others and think, “Those poor bastards are not going to be able to sleep for months“.
SMB can use this stuff
I can already hear some of you saying,” Steve, you are full of shit, there is a ton of stuff here that SMB could use”. I think about the typical SMB customer, and some of their requests, “Is there any possible way that I could get like an email or something when a new Lead is created? Will the platform do something as advanced as that?“. A lot of SMB customers are still amazed by the shiny hood ornament on the Ferrari.
The Shiny Hood Ornament
At this point, you may think that I am complaining, and if all Microsoft brought us, was the 80% I described above, you would be right. But, they also brought us the other 20%, the Dynamics 365 Business Edition. Right about now is where many of my Enterprise partner readers will go write their emails. To call the Business Edition a Shiny Hood Ornament is not a fair assessment. But before Business Edition, for SMB customers, our only choice was to focus their attention on the Shiny Hood Ornament of an Enterprise product, lest they notice what it actually was, and ran for the hills. Up to now, Microsoft did not take SMB very seriously in the Business Solutions space.
Taking SMB Seriously
Microsoft knew. Oh yes, they knew very well that some of us were out there trying convince SMB customers that an Enterprise product was their best choice. Trying to convince them that we could harness 10% of the power for their needs, while trying to keep them from peeking behind the curtain at the ominous machinery that was just behind it. A full-on Enterprise product hiding behind a $40 SMB Promo sku. For many of us, demos became an art form, after we modified the sitemap and ribbons to keep the SMB customer from asking “What’s that?“. We rationalized this behavior by convincing ourselves that someday, this SMB customer was going to want more of that power… “So is there any way that we can add like a column to a view?” The $40 dollar price tag was how we were able to sleep at night.
A Real SMB Product
Many thanks have to go to Param, Kishan, Leo, Paul, and others for deciding that partners like us deserved a break. To actually make the decision to carve away development effort from the Enterprise Golden Goose, and invest some of it in a real SMB product. One that requires hiding nothing in a demo. One that makes partners like us, feel we are actually selling the right product, to the SMB customer. Complain all you want about the “limits” and blocked off functionality, Microsoft just saved us SMB partners from having to obscure it all.
The gap between Financials and Operations is intentional, as is the gap between Business Edition Sales and Enterprise Sales. For most customers, the path will be obvious, but for others the path will be less clear. The large customer with Basic needs, or the small customer with sophisticated needs. Yes, both of these exist. I expect these middle-ground customers will give the Business Edition a hard look first. Customers look first to determine if their needs can be met at the lower cost, not the other way around… and the cost difference is significant. Business Edition is less than half of the Enterprise cost, multiply that by a larger number of users, up to 300 (which makes no sense), and you can imagine a lot of rationalizing on the customers’ parts. We have all been in that meeting watching a customer try and convince themselves that they don’t need something, that they obviously do. Thinking through ridiculous gyrations to avoid costs, “We’ll just review and delete contacts that exceed the limits on a weekly basis”, or “Can’t we just use Opportunities for PSA?“.
A Huge Step
The launch of the Business Edition, will indeed create some challenges in certain scenarios, but there is no doubt in my mind that it will be a huge success (quietly crosses fingers). The “Partner Opportunity” around Business Edition is completely different than it has ever been. A lot of services that customers used to pay us for, like simplifying an Enterprise product, will not be needed. Leveraging certain advanced capabilities, because we had them, will not create billable hours anymore. Success in this new world will come from a dormant muscle in SMB Partners, building scale. The bad news about the limits, is that they create a ceiling of just how much you can do for an individual customer. Your CLV will go down, and the only way to offset that will be with more customers. Fortunately, the SMB market for Business Solutions has woken up, largely due to other targeted solutions from other vendors, but none of those have the Microsoft brand on them.
For us, G.A. cannot come soon enough. Here’s wishing for a short Preview period.