The End of the Microsoft Partner

Okay, calm down, your Microsoft Partner practice isn’t ending anytime soon. But, if you throw your head back and think about what is happening in our world, you can probably see how it could. No? Let me tell you what I see.

The Commoditization of I.T.

I have spoken about this much in the past, primarily in the attempt to get you thinking about creating your own I.P. to differentiate so you don’t end up competing on price for everything you do. But in the final analysis, we may lift our heads one day, in the not to distant future, and realize that the Cloud may have screwed us all. Microsoft’s and other cloud providers’ dependence on channel partners is changing. Let’s face it, Microsoft was never going to show up at Joe Blow Printing Company and install an Exchange server, they needed you to do that. But today, “poof”, that server is gone. Well, not gone, but rather Microsoft is spinning it up in their data center. What was the Partner’s role? Selling a subscription.

Consumption is the Means to the End

If you are a Microsoft partner you know well about the new metric: consumption. Microsoft is now a cloud company, cloud companies survive, or thrive on recurring revenue, look at Salesforce. Recurring revenue is the result of selling subscriptions, and having customers renew those subscriptions indefinitely. Consumption is insurance. If users are not “consuming” the subscriptions, they cancel them. This is why you see Microsoft placing such a high emphasis on consumption, to insure the revenue stream. Your job? Make sure the customer is using the services.

“Steve, you are Full of Crap!”

Yeah, I get that a lot. I can hear you saying that Microsoft is completely dependent on you to architect that cloud system and help your customer succeed, etc. I agree, and so would Microsoft… for today. But they don’t need you to install an Exchange Server anymore, or any other server for that matter. In fact they don’t need you to migrate customer email either, they let you. Everywhere you look, not just Microsoft, but every provider is seeking to make things easier, to eliminate any hurdles that a customer may have to overcome in order to become a paying subscriber. Increasingly, Partners are that hurdle.

The Rise of the Hill Flatteners

What do products like SkyKick, Bit Titan and RapidStart CRM have in common? They each significantly reduce the cost of getting customers from here to there. These and other similar products, are promoted to “Make your Job as a Partner easier and more Profitable”, but are actually designed to flatten hills. Hills of cost customers previously had to climb over to start paying for subscriptions, the real end-game. Why do you think Microsoft keeps talking about these solutions? Your $150/user email migration cost is friction… your $25K basic CRM deployment cost is in the way! Many partners today are simultaneously facilitating and blocking Microsoft’s efforts. Right now these types of hill flatteners are offered though partners, but in the case of RapidStart CRM, our solution that is available only through our resellers, a customer can get CRM deployed in a usable way without any help from their partner, post purchase. Right now our resellers are largely just that, sellers; and they are not even particularly good at it. At what point do I decide that the channel is in my way?

The End of I.T as Voodoo

We know that the Baby Boomer generation, by and large viewed anything I.T. related, as the sole domain of Nerds. Nerds flipped the script and convinced everybody that I.T. was Voodoo, and only they could understand it. The typical Baby Boomer, while still in charge of many, if not most, organizations today, is also challenged by Smartphones. The Millennials are replacing the retiring Baby Boomers at a pretty good clip, and bring a more skeptical view of I.T. as Voodoo. Brought up with access to more technology, they are not nearly as intimidated by technology as their predecessors were. Guess who is coming next? Generation-X. Gen-X was raised on technology, they have no fear at all, and given access to the tools by the providers, they will be perfectly fine figuring this “stuff” out on their own thank you. Gen-Xers are at Microsoft developing these tools right now… for Gen-Xers. They will actually think “Tool” is too strong a word as it implies something that requires some skill to use. In a Gen-X run organization, I.T. is not a department, it is simply a fabric that everyone uses as they see fit, intuitively. They will have no need for a middleman between them and the platform provider. Gen-Xer: “Excuse me, what do you do again?“, Partner: “Oh, I provide consulting, to help you get the most out of Technology“, Gen-Xer: “Are there people who need that?“, Partner: “There used to be“…


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 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.

4 Responses

  1. September 26, 2016

    […] recently commented that my last post was an “Apocalyptic” view of the future of the Microsoft partner. Similar, and much […]

  2. September 26, 2016

    […] recently commented that my last post was an “Apocalyptic” view of the future of the Microsoft partner. Similar, and much […]

  3. November 17, 2017

    […] Over the last few years, many things that required specific deep expertise to enable, have been reduced to checking boxes. Microsoft has become keenly aware that while necessary, SIs can sometimes get in the way. The cost for an SI to build something for a customer, often kept that customer from moving forward. I have used this analogy before, but I am too lazy to come up with another one: the hill of cost that the customer has to climb, is too damn high. Microsoft has turned their attention to flattening every hill they can find. A ton of money and energy has been aimed at common items that a customer would like to accomplish, where the SI cost component of getting them configured and customized is simply in the way. “Can we make that a checkbox?” is the new internal mantra. The more things get reduced to checkboxes, the less significant and necessary the role of the SI becomes. I pissed off a bunch of partners about this over a year ago here: […]

  4. September 10, 2018

    […] who had to pay for it, or Microsoft who got no vig on it. Back in 2016, I wrote another post titled The End of the Microsoft Partner, which may have been a little early, but it is coming to fruition […]

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