In-Depth

Talkin’ ’Bout the Next Generation ... of Microsoft’s Partner Ecosystem

Redmond recently unveiled plans to revise key aspects of the 5-year-old Microsoft Partner Program. Experts and partners weigh in on the likely impact of the coming changes.

• By Anne Stuart
• September 01, 2008

Microsoft officials can't yet precisely describe what shape the program's next generation will take; they say only that their planned changes, while significant, won't happen overnight -- or, to use their preferred metaphor, it will be an evolution rather than a revolution. As Julie Bennani, the program's general manager, told RCP earlier this year: "We're going to do it in an evolutionary way." (See "The New Rules of Partnering with Microsoft," July 2008).

"I welcome the C-Sat requirement because having something to measure your overall success with the end customer is very important. Without that, you're basically blowing smoke." Stuart Crawford, Vice President, Business Development, IT Matters

However, officials insist that the program's core mission -- encouraging companies to partner with Microsoft in exchange for profitable business opportunities -- remains the same as when the program launched in October 2003. It's the surrounding environment that's changed. Over the past years, "our business has evolved, the industry has exploded, and it's time to evolve together to the next step," Allison Watson, corporate vice president for the worldwide partner program, said at the Microsoft Worldwide Partner Conference (WPC) in Houston in July, where some of the planned revisions were unveiled. "Regardless of what business you're in today, it's time to evolve."

I hate the 'Good-Better-Best' label. Personally, I don't want to brand our stuff that way. But the concept, people agree with ... because part of the design is keeping the bar high." Allison Watson, Corporate Vice President, Microsoft Worldwide Partner Group

As with any evolutionary process, the program will probably make some unpredictable twists and turns as it morphs to the next stage. As outlined in RCP's July cover story, one new major program component is already in place: an expanded package of partner competency areas. Two others are still being developed:

• A new competency "framework" for ranking a partner's expertise in each specialty area
• An increased emphasis on documenting customer satisfaction -- or in Microsoft parlance, "C-Sat"
  (For more details on those and other revisions, see "The New Rules in a Nutshell".)

"The emphasis on customer satisfaction is good. The anonymous factor helps to allow people to say what they really want to say." Andrew Saletra, Strategic Relationship Manager, Allin Consulting

Those last two program components in particular are drawing mixed reactions from partners, industry analysts and others in the partner ecosystem.

All That Glitters
As currently planned, the competency framework wouldn't just identify partners as proficient in particular specialties -- it would label them as "Good," "Better" or "Best" in each area for which they're certified. That approach is part of a larger effort to address a much-discussed larger issue: whether the Gold Certified tier, once viewed as an elite pinnacle, has become too easy to achieve. The number of Gold Certified Partners has more than doubled in the past two years, jumping from about 7,000 in 2006 to more than 14,400 today, according to Microsoft figures. (Meanwhile, the number of Certified Partners has dwindled rapidly, dropping from about 30,000 worldwide in 2006 to just more than 17,500 today as, presumably, most of those Certified companies move up to Gold Certified status.)

"Anything that helps differentiate partners is a good thing. There is too little of that in today's program." Arlin Sorensen, Founder and CEO, Heartland Technology Solutions Inc.

Those figures already have many partners concerned that the Gold Certified label may have lost some of its luster and that they need other ways to promote their expertise to prospects and customers. "The meaning of 'Gold [Certified] Partner' has been diluted over the years as more and more partners achieve that status," says Bill Breslin, vice president for application development at Insource Technology Corp., a Houston-based Gold Certified Partner specializing in networking, applications and outsourcing solutions. "Our clients continue to value the 'Gold' status, but it's important [that] there's always a higher mountain to climb for the partners willing to put out the effort."

Kerry Gerontianos, president of Gold Certified Partner Incremax Technologies Corp., a New York City-based technology consulting company, doesn't view the skyrocketing number to the program's top tier as a problem in itself. "What's bad is if customers don't recognize it as being special," says Gerontianos, who recently succeeded Breslin as U.S. president of the International Association of Microsoft Certified Partners. He views the planned competency labels as one way to inject more meaning into partner designation, but adds this caveat: "There has to be some kind of knowledge transfer from Microsoft to customers. If they already know what the program is and they see that I got an 'A' [best rating] in it, that's good. If I have to explain it, that takes too long and I get glassy-eyed customers."

"While I'm supportive of collecting customer-satisfaction data, I think it is a burden on clients." Matt Scherocman, Vice President of Consulting Services, PCMS IT Advisor Group

Others say the competency rankings prove valuable because they're much more specific than the program's basic three tiers. "As a Microsoft Partner with six competencies and dozens of specializations, we invest a ton of time and energy into the program," notes Matt Scherocman, vice president of consulting services for Gold Certified Partner PCMS IT Advisor Group, a consulting and services company based in Cincinnati, Ohio. He supports the "Good-Better-Best" approach because, he says, "it will help differentiate PCMS and the investments that we've made in Microsoft emerging technologies like Performance Point and OCS with telephony integration from those partners that earned Gold [Certified status] by just installing Windows Server."

Bottom line: "Anything that helps differentiate partners is a good thing," says Arlin Sorensen, founder and CEO of Heartland Technology Solutions Inc., a Gold Certified Partner based in Harlan, Iowa. "There's too little of that in today's program."

But many partners have concerns as well. "I like the idea of ranking," says Harry Brelsford, CEO of SMB Nation Inc., a Bainbridge Island, Wash.-based organization whose membership includes many Small Business Specialists and other Microsoft partners. "But I'm wondering whether Microsoft has just opened itself up to litigation," he continues."Someone who ranks low is going to say, 'With all due respect, that's not fair.' I would be real surprised if Microsoft Legal lets those [Good-Better-Best labels] stand as they evolve this."

Microsoft's Watson acknowledges that many aspects of the ranking system -- including those particular labels -- remain very much in flux. "The concept of a rating system [could be] three star, four star, five star; one star, two star, three star; gold, silver, platinum -- whatever. We're not even sure that we're going with the 'labels' yet," she says. In fact, she adds bluntly: "I hate the Good-Better-Best label. Personally, I don't want to brand our stuff that way." But she's quick to point out that, like Sorensen, many partners support the underlying goal of providing another way for partners to distinguish themselves from the pack. "Part of the design is keeping the bar high, so that 'Best' is a target to continue to aspire to, not one that everyone can just achieve, if that makes sense," she says. "That's something partners press on a lot, and that's our challenge."

Codifying 'C-Sat'
Microsoft COO Kevin Turner is passionate about what he calls "C-Sat" -- the process of ensuring and measuring customer satisfaction. "We have to make sure that taking care of our customers is a personal obsession," Turner, a former top executive with Wal-Mart Stores Inc., said in his keynote address at last year's WPC in Denver. "I think we can improve in this area. That's why it's at the top of the [priority] list." (See "Seeking Satisfaction," September 2007.)

That emphasis on C-Sat is reflected in the another major partner-program change: a requirement that all Certified and Gold Certified Partners engage in periodic customer-satisfaction surveys conducted by outside specialists, which will provide survey results to partners and non-identifying aggregate data to Microsoft.

Paul's Point of View

A leading analyst explores Microsoft's efforts to both segment and unify its partner program. The coming changes in the Microsoft Partner Program (MSPP) reflect a metamorphosis in how the company views its relationships with its channel partners, according to analyst and RCP columnist Paul DeGroot. "Microsoft wants much tighter alignment between what it wants and what partners do," says DeGroot, of Directions on Microsoft. "It wants to make a larger investment in its partner channel, but it also wants a larger return from its partner channel." Currently, Microsoft segments it partners primarily by program tier and competency areas. "It wants to add some dimensions to this taxonomy," including customer focus, vertical, business model and solution areas, DeGroot says. "There's a quid pro quo here: 'Hitch your wagon to our sales machine more tightly and we'll take you with us,'" he continues. "But it could mean that partners need to define themselves more narrowly and take the risk that the horse may occasionally wander off the desired track." DeGroot has always admired one thing about the current program: "I thought its design was a smart compromise that avoided pigeon-holing partners too narrowly. That's what Microsoft had before the current MSPP structure was developed, and it was a mess. Some programs had only a single partner in them." The current structure -- which he says already helps partners differentiate themselves via the program tiers and competencies -- helps Microsoft "to ensure that its messaging to partners is relevant to their particular requirements, and not scattershot," DeGroot says. And no matter how the program evolves, that's something he hopes will remain unchanged: "Those values -- some specialization, but within a single program -- are very important to preserve." -- A.S.

Many partners find it tough to find fault with any serious C-Sat initiative. "The real game for all of is customer satisfaction," points out Sorensen, adding that his company -- which has already voluntarily participated in such a surveys -- benefited greatly from the client feedback.

Stuart R. Crawford of IT Matters, a systems integrator based in Calgary, Alberta, Canada, also welcomes the C-Sat requirement. "Having something to measure your overall success with the end customer is very important," says Crawford, who is vice president for business development at the Gold Certified Partner. "Without that, you're basically blowing smoke."

Gerontianos, of Incremax, agrees. "I'm not kicking and screaming on this one because I recognize the value," he says. "We'll adapt to it. At the end of the day, it's going to help my business."

Having outside companies goes a long way toward ensuring credible survey results, says Andrew Saletra, strategic relationship manager for Allin Consulting, a Gold Certified Partner based in Pittsburgh, Pa. "The anonymous factor helps to allow people to say what they really want to say -- assuming that you're getting to the type of person who likes to reply to surveys," he says with a laugh, then adds: "But I'd like to see more incentives and more education out there, to both the customer community and the partner community, as to the importance of doing this."

Scherocman, of PCMS IT Advisor Group, has mixed feelings about the new requirement. "While I'm supportive of collecting customer-satisfaction data, I think it's a burden on clients," he says. Scherocman, whose company has also participated in voluntary C-Sat surveys, says the process needs a significant overhaul to be truly useful to partners. "Today, the survey goes out to clients and partners receive a summary of the data back," he says. However, they don't receive the detailed questions and the answers attached to them that would really help improve service levels or make changes.

And some partners say they're doing just fine with their own C-Sat efforts, thank you: "I think this program provides a great feedback loop to Microsoft and for some partners," says Breslin, of Insource. But, he adds: "Our own approach is to have such a deep relationship with a client that we always know their satisfaction levels and actively work to make it better."