Steering the USS Microsoft to CSP

According to Microsoft, they currently have 112,388 employees. That is a big ole company. As companies go, it qualifies as an Aircraft Carrier. My former brother-in-law was the commander of the aircraft carrier USS John C. Stennis, and he said it was hard to turn fast.

Ships Passing in the Night

You would think that an Aircraft Carrier sized company like Microsoft would also be very slow to turn. But in recent years, Microsoft has maneuvered more like a speedboat. Unfortunately, Partners and Distributors have proven far less nimble. I took way too much time to create the confusing looking diagram below:

carrier path

Okay, clearly this will require some explaining. The Microsoft Aircraft Carrier that had been so focused on on-premise solutions, suddenly does a starboard dime-spinner towards cloud a few years ago. I wrote about this a while back. This turn was so abrupt, that many partners failed to make it initially, and while some still have not, the majority are finally now on the cloud path… at some level. But, just as partners are getting their cloud bearings, the USS Microsoft swings hard to port towards CSP. Again, partners are failing to make the turn.

Making Simple Complicated

The thing about aircraft carriers is that sometimes they can’t get out of their own way. Microsoft has completely bungled the CSP (Cloud Solution Provider) message. From the first announcement of CSP, right through their continuous efforts to clarify it, Microsoft has thoroughly confused the vast majority of partners. I was in one of those first announcements where Microsoft said  to a large group of partners that they had their choice of two CSP Models. This was trip up number one; in fact 90% of those in the room really only had one practical choice… via distribution.

Many partners completely wasted a month or two trying to figure out which CSP model was best for them. When they ultimately concluded that their only viable choice was distribution, many thought “Aha, I knew it, this is not good for us”.  Obviously, Microsoft has a lot to gain from CSP. CSP shifts a significant burden off of Microsoft and onto the CSP provider. Partners, being a suspicious bunch in the first place were thinking that Microsoft was the only one who would benefit from CSP. Aware of this perceived inequity, Microsoft threw a big layer of partner dollars over CSP to even out the scales.

Distribution to the Rescue

Okay, Microsoft bungled the message, but ultimately it would be distributors, who are closer to partners on the ground, who would have to rephrase the message. Microsoft gets a do-over via Distributors. And indeed, Distribution stepped right up… and made the message even muddier. Microsoft must be pulling their hair out. CSP was supposed to accelerate the current trajectory, not stall it… Stupid Partners. To expect that Distributors, who have their own agenda and are not under your control, to go out and provide a clear and consistent understanding to partners was naive.

You only get Three Tries to Land a Message

Okay, I made that up. I have no idea how many times you can go back to partners and clarify a message before they stop listening. It may actually only be one. I say that because I talk to a lot of partners, and daily one of them will tell me that, as he understands it, he makes more money in Advisor (WebDirect) than CSP. All I can say is “That sir, is Incorrect Information”. I can’t blame the partner, the first message he heard was FUBARed, and everything after that was screechy noise.

What to do… What to do?

In my opinion, because it’s the only opinion I can share freely, CSP is a better model for most partners… that’s actually a fact. But most partners either don’t get it, or don’t believe it. I think Microsoft needs to take a step back, and restart the conversation… differently. Direct CSP should be a back-channel conversation to be held directly with Distributors and those few capable partners, and never mentioned again to the rank and file.

The front-facing, and only partner message should be a single message about indirect CSP which should just be called CSP. Microsoft has taken a “here it is, promote it how you want” stance with Distributors. There seemed to have been an assumption that everyone would just “get it”, and maybe they would have if Microsoft had not gone so wide right out of the gate. Microsoft needs to invest in helping Distributors with the clearest message. Dollars thrown at seats in CSP is pointless, if the partners are not over there.

My Feeble Effort

What I would, and do, say to partners today is, forget about everything you have heard about CSP. Take my word for it, that it is a 90% probability that CSP will put more money in your pocket, at the end of the day. We work closely with Tech Data, and while not a commercial for them, and not saying they have a super clear message either, they are starting to hone in on it. Be prepared to persevere through some fog, knowing that you will make more money once it clears.

When you talk to Tech Data make sure you go away understanding the all-up money, beyond just Tech Data margin, but the Microsoft money layer. Grill them on the support obligations, and “bill on behalf of” options and understand the collection risk. As a partner, this is what you really need to know, that the pretty PowerPoint decks don’t go over. If, at the end of the day, you decide that CSP is not for you, too bad, do it anyway as all other models will be evaporating soon enough.

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