I recently tweeted a link to an obscure Microsoft post I found about eliminating IUR. I thought at the time, “this is going to get messy“. I followed up with a post on it myself, which promptly blew up, and now there is actually a petition someone started. Just to be clear… I did not sign this petition, and I will not be wielding any pitchforks at Inspire. Why not?
It Had to Happen
The vaunted “Microsoft Partner Network“! Wow, that sends chills down the spines of all other software companies! “Oh no! Here comes a Microsoft Gold Partner! We might as well just pack it in, we don’t stand a chance“, said Salesforce or SAP never. The ones who are the most impressed by Microsoft “Gold” partners, have always been Microsoft Silver partners. The Microsoft Partner Network (MPN) is a legacy construct, designed for an era that has passed. In fact, I think the entire MPN today is constipated!
Wait, I thought you were with us!
It seems that many folks read my post and tweets as a rallying cry, but if you re-read it now, knowing that it was not, it will sound quite different to you. This is not the first time I have landed on the bank opposite of the screaming hordes. The recently introduced ISV revenue-sharing model was another brouhaha that most seemed to have assumed that I, as an ISV, would have had a tantrum over. Instead, I was all for the changes. The fact that I have written some rather scathing reviews of things that I thought were dumb moves by Microsoft, does not mean that I think Microsoft is dumb. I am not “that guy”, but I have met “that guy”. I run into them at every event, and they frequently comment on my posts. They can clearly see the conspiracies that I am obviously missing. Like, how at every event Microsoft has these kids in purple shirts standing around with tablets… appearing like they are giving you directions… but what are they really doing?
Back to MPN
Microsoft is not good at giving news that they feel will be poorly received. With the exception of Guggs, who seems eager to stick his face into a fire, the rest would rather hide. But just because Microsoft is staffed by chickens, doesn’t mean they’re always wrong. In fact, over recent years, it would seem that are right way more often than they are wrong. But even though things are publicly looking great for Microsoft right now, there are leaks in the ship. None that will sink it, but if not addressed, they will cause issues in the near future. MPN is leaking like a sieve. Within MPN are a lot of things, beyond just training and competencies. Your MPN membership controls everything about your relationship with Microsoft, or lack thereof.
Competencies
As far as partners without a competency are concerned, competencies are a shitty way to grade partners. First of all, they are not required. You could well be a highly capable firm with many professionals, selling a butt-load of licenses, but unless you opted to pay the fee, you are not Microsoft competent. Conversely, up until recently, any firm with a handful of people and few deals, could opt to pay the fee and voilà, they’re a Microsoft Gold Partner! So basically competencies as they existed, were pretty much a sham. BTW, I am saying that as a current Gold partner, not one of those petty and envious Silver ones. A lot of noise was made recently about the required increases in certified individuals and revenue to maintain a competency, but in reality Gold didn’t mean shit anymore, and Silver never did. Microsoft’s entire competencies strategy needs an overhaul, pulling the IUR benefits out of it, just stopped some bleeding from a program that was not working… for anybody.
80:20
We’re all familiar with the 80:20 rule; 80% of the value that Microsoft accrues from their Partner Network, probably comes from less than 20% of the Partners in that network. Those who are calling for revolt, creating petitions, and threatening to leave the channel are in the 80%. So, on the unauthorized behalf of Microsoft let me say… “Please Leave!”. How much more nimble and focused could Microsoft be, if they lopped off the 80% deadwood in their channel? How much time and money could they save, by instead of catering to partners who ain’t doing shit, just hitting the delete button? To put this into context, I thought I had heard recently that there were like 600,000 Microsoft Partners Worldwide. Even if that number is way off, how many partners does Microsoft actually need to accomplish their “new” goals? I mean, 20% is still 120,000 partners!
Never say Never
Satya Nadella himself proclaimed “Microsoft has always been a partner led company and will always be a partner led company“. Hmm… it seems like he should have left some wiggle room there. I can easily see a Microsoft without partners, or at least with a fraction of them. Microsoft itself suffers from Pavlovian conditioning, opening every partner presentation with the obligatory “Thank You Partners!” slide, and then going though a whole deck on how developers are no longer required. Many partners, and all LSPs are basically order takers for Microsoft, while at the same time Microsoft continues to expand it’s direct sales capabilities at an unprecedented rate. “Reselling” licenses is a pointless relic in the SaaS world.
Lipstick on a Pig
I had something great for this heading, but I feel like I am starting to sound like a raving lunatic already, so I will save it for a future post.
As someone who was with a large national partner (VAR/SI), and is now a new ISV startup, I certainly can see where large vendors like Microsoft make decisions that show little regard for the investment their partners have made. But I also largely agree, and applaud, Steve’s article. I rarely see this. People stating the truth in the VAR world. With the caveat that Microsoft, among other vendors, have been less than transparent and handled the change less than perfectly, I think the most telling piece of all this is that a community which has witnessed a sea change in how businesses procure, deploy, and maintain business software along with more or less all technology, is somehow surprised that change arrived. I decided to leave the VAR/SI world when time after time, with my leadership or talking to community peers and people more senior than me, there was little to no appetite for implementing ANY self-generated GTM, regardless of how compelling. There was a general sense that there should be a guaranteed positive outcome, in terms of revenue and profit. There was little acknowledgement that the ways in which value had been created in the past had been hollowed out more often than not. That led me to leave and start my own business, a big risk, but one I don’t regret taking, even though the outcome is still TBD,. When I started my career in the late 90’s we offered clear, demonstrable value. That became more and more strained to articulate. Now it isn’t, and that always seems like the right choice.
You’re not just happy to stick you face in a fire Steve but jump all in face first. For what its worth I agree with the premise that MPN is not working and differentiates no-one. But neither will it help to send 480k to Google and AWS. Needs more levels and more notice of the changes. Trouble is now anything they announce get a ‘but will they roll back again?’ comment
Very interesting as always Steve. I certainly agree that there are problems with the MPN and how simple it was to join. I was actually surprised of the relative ease at which we attained our Silver Partner competency. To be honest we never wanted to be Gold, and the main reason for becoming a Silver Partner was to use the better support for our customers, and get the IUR software to enable business growth. I thought the fee to join as a Silver partner pays for some of that. I think the key differences between Silver and Gold were how much IUR licenses you receive and how many support hours.
For the IUR software – I see it as simply “eating your own dog food”. By all of us internally using the Microsoft products – Office 365, Azure, Dynamics 365 – we know it inside out. We are part of the preview groups on all our products to ensure we get the latest updates and we know the products we are selling. The cost of knowing our tools has suddenly increased tremendously. Maybe we will should use Zendesk\Freshdesk to manage our helpdesk instead Dynamics 365? Move over to Monday instead of Dynamics 365 PSA? We will probably stay with Office 365 because its still better than the competition in a lot of ways, but we will definitely consider utilizing AWS a lot more. It’s not because Microsoft’s products aren’t good, It’s because previously there wasn’t a reason to consider an alternative and now there is.
Something that could be fair is reduced pricing for partners. We would still need to pay – which is very fair to pay for what you use – but to go to full commercial prices is a bit harsh. Just create another price list for Partners in your Dynamics instance 🙂
The changes they are making seem to be clearly geared towards larger partners, and toward more sales for new Microsoft customers. Our primary business is consulting and support, not license sales, which inherently limits us on the Microsoft measure scale. The fact that we advise our customers which license to get, what products are good and which features are coming is what gets them to buy more subscriptions and expand the Microsoft footprint.
Your 80:20 comment is also interesting – While most of the business comes from the 20%, which are probably the larger partners that get the big multi-million dollar deals, i’m not sure it’s wise in this ever changing market to spur and incite the majority of Partners who have been loyal and selling you products for so long. If only 50% of that 80% (nealry 250,000 businesses) sell more of the competition, and convince existing customers of the benefits in moving (as we are their trusted advisors), it could have a bigger impact than Microsoft may think…
This is going to be a big problem for partners as you describe. Very short sighted on Microsoft’s part, when partners use the technology they sell it from firsthand knowledge. There are a number of applications we as a partner use due to the IUR’s and then recommend to clients. This would not happen if IUR’s were not available.