Microsoft continues inching into ISV Turf


Microsoft has always been a partner-led company, and we are committed to creating more opportunity for our partners across our businesses.” and “This ethos of being partner-led will be there in everything we do“. Satya Nadella has said these things, but I am wondering…

Lip Service?

One of the major factors that brought me to transition my company from a Salesforce Consultant, to a Microsoft Partner in 2011 was the “Partner Ecosystem” story. After almost 10 years with SFDC, during which their relationship with consultants was borderline antagonistic, I was fed up. Microsoft sounded like a breath of fresh air. But their “Partner Ecosystem”, particularly for ISVs, has been weighed on the balance… and found wanting.

No Bigger Advocate

You would be hard-pressed to find a bigger advocate for Microsoft’s ISV ambitions than myself over recent years. Having drank the Koolaid and creating I.P back in 2015, as we were all strongly encouraged to do, I had a vested interest in their effort. Many of my posts started out apologetic for my previous encouragement, but ended up positive and hopeful. But, I am starting to lose hope that Microsoft will get it right.

Was Saleforce Better?

There is no doubt that at the time I came over in 2011 Microsoft’s business applications were complete shit compared to SFDC. This was clearly demonstrated by their market share. I took it on as a personal challenge to seek out anyone at Microsoft who would listen, and press annoyingly for change. Over time, my incessant ranting made its way through the grapevines of Redmond, and I was invited to participate in many things. Multiple Partner Advisory Councils, more private phone calls and in-person meetings with Product Managers and leaders than I can count, and an MVP designation. I can honestly say that today, Microsoft has an undeniably better product than Salesforce on every measure other than market share.

Not Alone

Before I start sounding like some kind of narcissist, claiming to have single-handedly straightened up the leaning tower of Pisa, I was far from alone in this mission. While it is satisfying to see aspect of products or programs that I know I had a direct influence on, many others had similar influence over other critical aspects. Each of us “trouble-makers” have a vested interest in our mutual success.

My Biggest Disappointment?

Almost every aspect of the ISV effort for Business Applications ISVs has been found “wanting”. Up until last year, the various aspects of the ISV efforts have been led by lower level soldiers with little authority, no imagination and no understanding of the ISV business. “Hi, I’m Joe, I’m in charge of this important ISV facet, I just transferred from the MS Paint development team where I have been for the last 15 years. How can I help?” Sorry Joe, but you know less than my dog about this business.

Not Guggs Fault

After years of watching the revolving door of low-level solders step up to within two feet of their targets, raise their rifles and miss… a General showed up. Steven “Guggs” Guggenheimer, a long-time veteran of Microsoft and self-described “Fixer” was brought in. I first met Guggs at a Partner Advisory Council meeting with about 15 other ISV leaders. He struck me as a no-nonsense guy who planned to get things done. He also struck me as a guy who did not need, or want, our opinions.

ISV Connect

Guggs’ brainchild was ISV Connect. A program developed mostly in the dark, that basically seeks to take a share of ISV’s revenue, in exchange for some benefits. It is not optional, it is “Pay to Play”. The program was launched in lightening speed with agreements being sent out to ISVs almost immediately who were expected to sign or leave. The minimum tier is 10% of your revenue, in exchange for some benefits from Microsoft that in my opinion are mostly worthless, at least for existing ISVs. If you opt into, and are accepted into, the 20% tier, there was an additional promise of Co-Sell business, meaning Microsoft’s own sellers, would pimp your solutions. At a recent Inspire session Guggs, as well as in a few interviews I have done with him,  intimated that some ISVs are happy. I have not met any of these ISVs, and Guggs just announced his eminent retirement. Now what?

Back to my post title

The Microsoft ISV landscape has become a risky place to be. In order to continue participating, we now have to find another 10% or 20% of margin. For those with paid resellers in particular, this is a huge challenge. If the program was producing 10% to 20% more business for ISVs that would be one thing, but that is not what I am experiencing, nor any other of the many ISVs I have talked to.

Another risk is Microsoft’s continued encroachment into first-party vertical solutions. If you were not lucky enough to be acquired, like Field One, Microsoft has caused problems for several ISVs as they entered their spaces. Project Management and Marketing are a couple of areas that Microsoft has moved to displace existing ISVs. I was also very suspicious of the entire Accelerators program. Their recent announcement of an Asset Leasing Accelerator sounds pretty damn vertical to me.

So what’s the play?

What is the message we are getting from Microsoft? “Come join our booming ISV ecosystem, where we will take a share of your revenue in exchange for basically nothing, and if you are wildly successful in spite of that, we might just knock you off!” I would like to believe that is not the intent, but as my ex-wife used to tell me, “Actions speak louder than words“.

Is there still reason for hope? Maybe for a lucky few, but I am not seeing any for the masses at the moment. Let’s see what Guggs’ successor can do.

Update 08/06/2020

I received an email from Guggs after this post went out that included the following:

“I’m curious about a few things, but one in particular caught my attention. I can’t remember the time I said the ISV Connect program was “widely successful”.  I’m sure I have almost always said something along the lines of …..some things have gone well and some things we need to do more work on….but can’t ever remember using those words.   I don’t mind you pushing hard on the company or the program, but I would be happier if you didn’t attribute absolute phrases to me unless I had indeed used them….which isn’t really my style.”

After digesting this, and thinking back, I agree with Guggs, that he did not ever proclaim that the program was wildly successful for ISVs as I wrote above. I apologize for attributing that sentiment to him.

He also confirmed in the email that Toby Bowers would indeed be taking over his role as leader of the effort. I have known Toby for probably 5 years now, and hope for the best as he walks into what has been a very challenging issue for Microsoft. Toby has a completely different personality than Guggs, and time will tell if that is more effective at driving the program, and easing the discontent among ISVs.

At the end of the day, the buck stops at the leader’s desk. To be fair, Guggs came into a pile of shit, and I am aware that a lot of work needed to be, has been, done in the background on his watch. I would like to believe that while ISVs have still not seen the success they should have, Microsoft is closer than before at delivering on that soon. Hopefully Toby can push it over the goal line for us all.

Steve Mordue MVP

Steve Mordue, a Microsoft Business Applications MVP, is the CEO of Forceworks, a 2014 Microsoft Partner of the Year. Steve started his business applications consulting career in 2001, originally supporting Salesforce.com as a Certified Consultant. Steve transitioned his consulting practice to Dynamics CRM, (now Dynamics 365) in 2011. Steve has been engaged in hundreds of deployments over the course of his career. As one of the leading Microsoft Business Application Consultants, recognized by Microsoft as an expert, Steve has provided training, on behalf of Microsoft, to other Microsoft Partners globally on how to launch and build successful practices. Steve is a member of the Worldwide Dynamics Partner Advisory Council, and is a frequent presenter and panelist at global Microsoft events. The opinions shared in this blog are Steve's alone. If you are looking for Microsoft confidential information, you will not find any here.

5 Responses

  1. Jim Flushing says:

    Consider that one of the most celebrated partners year after year is Avanade, a joint venture between Microsoft and Accenture — basically Microsoft is awarding themselves the awards.

  2. akhildynamics (MCT) (@akhildynamics) says:

    Dear Steve,
     
    Almost everyone of us have found ourselves asking this question recently – “What is there in it for me as a partner?” With all the industry accelerators, with the presales and program management approaches like Catalyst, IDEA Framework and recently launched sales plays, what are they expecting the partners to add as a topping? Also, Microsoft’s strategic partnerships with the biggest conglomerates and blessings by Federal Governments (most recently, India), where are the startups and entrepreneurs’ space? Many questions, less answers! 🙂
     
    Thanks for the insightful and straightforward thoughts.
     
    Kind regards,
    Akhilesh
    (@akhildynamics)

  3. Andrew Snodgrass says:

    I’ve always enjoyed your no-nonsense analysis and willingness to press for answers. A great summary of the situation.

  4. Joseph Bonomo says:

    I am glad someone finally said this.

  5. Boris Belousov says:

    Wow, Steve, I saw many of your possitive articles during past 9 years. Are you loosing trust? Welcome to the club. I still hope things are going to be better. Maybe we will finally get some better Guggenheimer 🙂

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