Five Stages of Microsoft Partnership

I spent some time with a colleague this week discussing how partners work with Microsoft, and it’s a conversation I’ve had in many shapes and forms for almost 15 years with many Microsoft partners in partner briefings, conferences, advisory  boards, executive round tables, and other less formal venues (ie/eg, over beers).  Having built much of my career around partnering with Microsoft, I have strong opinions about this “dance” that we do, and if you know me at all, you know that I am generous about sharing such opinions. 🙂

So, please find here a reasonably informed but informal, slightly tongue-in-cheek but generally based in reality, take on partnering with Microsoft:  an ersatz “maturity model,” if you will.  In this case, I need to be crystal clear:  I speak for myself and myself
only on this one:  this by no means reflects the opinions (or even the experience) of any of my employers over the last 15 years.

With apologies to Elisabeth Kübler-Ross, here are the Five Stages of Microsoft Partnership:

Stage One:  Denial 
Why on God’s green earth would we want to partner with Microsoft?  They need to bring us some leads, then we can talk.  It just feels like a tax, with no immediate evident return.   We can’t make any headway without being asked to fill out some form containing information about my company that Microsoft should already know.  What are they bringing to us, besides a long list of acronyms?  We don’t know or care about the difference between an SSP and a TSP.

Stage Two:  Despair
Wow, this program is dauntingly comprehensive, and our organization really doesn’t have our act together.  If I were Microsoft, I wouldn’t be bringing opportunities to us.  We have a long way to go to meet the requirements and guidelines, and to avail ourselves of all the benefits of the partner program.  We understand the segments of Microsoft, however, and know which one(s) our business should be aimed at, and we’ve identified some key people in those segments with whom we need to connect.  It just feels like a long way up from here.

Stage Three:  Hopeful Performance 
We have seen the value of the program, are executing against it, if unevenly, and we have a plan to monitor and improve our execution,  The Microsoft team has started to take notice, and our organization is either managed or on a path to becoming a managed partner.  We’re using software entitlements to get/stay current on our own productivity
technologies.  We have started to speak in sentences with two or three Microsoft acronyms in them without batting an eye, and understand the different licensing mechanisms (e.g., OEM vs Open vs Select vs Enterprise Agreement) that Microsoft uses in my segment, and why that matters.

Stage Four:  Soaring Execution
We and our Microsoft partner team have executed against our plan, we are considered a “go-to” partner in at least one Microsoft competency or segment.  One or more people on our team has a “purple badge” as  a Virtual Microsoft employee, and we’re jointly crafting sales and marketing programs with Microsoft team members.  We’re making sure we bring a nice outfit to WPC, because we expect to be on stage receiving a Partner of the Year Award, and/or sitting for a photo shoot so that Microsoft can use our image in their
stock photography.  We also know enough to prioritize our Microsoft investment in the most “partner-friendly” individuals/teams, (ATUs/STUs, individual sellers, and segments) and avoid wasting time with the others.*  We know very precisely, by late summer, when annual plans are finalized, what the incentive structures and goals are for our key points of contact at Microsoft.

We have, un-ironically, used sentences like “Is the new TSP for SMS&P aligned with APIO and goaled on SQL Azure POCs?”

*Like everywhere else, there is a bell-curve of partner-friendliness among Microsoft team members, and we’re attuned to it.  A Partner Account Manager who can help you focus on where to invest, and perhaps as importantly, where not to waste your time, is an incredibly valuable resource, all along this lifecycle, and at this stage in particular.

Stage Five:  Devolution/Plateau
We have been a Microsoft partner long enough to train new Microsoft team members in Microsoft’s own structure, organizational dynamics, and programs. We continue to perform at a high level, but have rested on our laurels a bit.  We lack the vision to ascertain which changes are critical, or the agility to embrace seismic changes in
Microsoft’s partner model, margin model, deployment models, etc.  We fail to adapt to where Microsoft is headed next, so we double down on what got us to Stage Four.  We get the sense that Microsoft has begun to favor more “up and comer” partners, and too many of the “best practices” we espoused with Microsoft have been adopted broadly, killing
any competitive advantage we had against other partners.

Note:  The best partners, of course, maximize their time in Stage Four, and/or create what some investment banker-types call “a liquidity event” prior to ever reaching Stage Five.

I’ve learned two key lessons in my time as a Microsoft partner:

  1. There’s money to be made as a Microsoft partner.  It’s not always easy — Microsoft is a large, complex organization even in the midst of its own reorganization, and even the friendly dragon can obliterate a whole village with one swipe of its tail.  As with most partnerships, there are two key types of assets that make it work:

a. Programmatic/systematic:  forecasts, Partner Sales Exchange, events in a box, training opportunities, conferences and other events,etc.

b. Personal:  the people who interact with Redmond, developing product and go-to-market strategy, and the people who interact with Microsoft’s customers in the field, at the regional sales organization level.

The programmatic things often need to happen (check that box!), but it’s the personal relationships with the right people in the organization, as with most partnerships of value, that will make or break you as a Microsoft partner.  Don’t ever miss an opportunity to wisely invest in these relationships.

        2.

You’ve got to stay attuned to, not just how Microsoft makes money now, but also what their sellers are “goaled” on each fiscal year. 

      In so doing, you’ll learn a lot about their priorities.  While it can be costly to be too early in the market with Microsoft’s products and services (see:  PerformancePoint v1, Windows Mobile until about 2009 or so, Dynamics AX in about 2005-2006, etc.), it can put you out of business to be too late.

Overall, the magnitude of the Microsoft opportunity for partners, even in challenging times, has been enormous for a long time, and Microsoft is distinguished in its attention to a robust partner “ecosystem.”  I have many times likened Microsoft to a battleship:  it takes a long time to turn the ship, but once it trains its guns on a target, it tends to obliterate that target.

If you know where you are on this continuum, and what opportunities and threats to look out for, you can create a lot of value to your clients, your community, and your investors.

Happy Partnering!

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