Ziff Davis Internet
News & Resources for the IT Reseller
NewsReviewsTech AnalysisCommentarySecurityLinux/Unix
My Account |  

Steven J. Vaughan-Nichols  
With Partners Like Microsoft, Who Needs Enemies?
By Steven J. Vaughan-Nichols

Opinion: Microsoft is pushing into the service space with its direct sales force while insisting that it won’t hurt its service partners. Yeah. Right.

Come on, can’t anyone just call a betrayal a betrayal?

Take, for example, Microsoft’s plans to continue to expand its specialized, vertical-solutions direct sales force. Simon Witts, corporate vice president of Microsoft’s enterprise and partner group, said that this won’t cause any business conflict with its partners.


Mind you, Witts said that Microsoft is moving the selling of services into its sales force under a program known as “One Microsoft,” in which there is one account team and one opportunity pipeline.

Nevertheless, Witts insisted that Microsoft is not in the services business and doesn’t have ay plans to become a services player

“We still run that as a cost center, and it doesn’t even break even. I bill $1.6 billion of services in the enterprise, and so it is always going to be less than 10 percent of my revenue and less than 5 percent of my server sales,” Witts said.

Excuse me, maybe 1.6 billion ducats is pocket change for Microsoft, but it’s big bucks for anyone who’s south of a $100 million annual gross revenue. It’s more green than most of Microsoft’s partners see in a year.

OK, maybe it’s a cost center now, but Microsoft is still pouring more money and resources into it. In the last five years, Microsoft has increased its enterprise sales force by 60 percent. And, Witts said, “I think we could grow it another 60 percent in the next five years. We have also been growing our on-site services team by 16 percent compound annually, and we will continue to do that, so we can get to 23,000 people inside the enterprise in the next five years.”

But, wait there’s more. The number of specialists in the enterprise sales force is also likely to double to 50 percent, according to Witts.

PointerClick here to read more on Microsoft and its channel practices.

And what’s a “specialist”? This “specialist” designation does not just mean that the on-site Microsofties know all about the individual technology sets, but increasingly that they understand things like straight-through processing, claims, point-of-sale and branch. “This is very much what I would call cross-workload or industry solutions,” Witts told eWEEK reporter Peter Galli.

Enough is enough. Microsoft is getting ready to compete in the channel with its partners. End of equivocation.

Microsoft is new at selling services, so it may yet fumble this new effort. But even if it does, Microsoft’s partners are going to feel the pressure.

Microsoft is already saying that it’s no longer choosing partners based on their commitment to Microsoft products. The new gold standard is whether partners have vertical expertise.

At the same time, though, that’s the same area that Microsoft is boosting its direct sales force. Ack!

From where I sit, the Microsoft solution plan looks like trouble whether you’re a traditional value-added reseller or an integrator who installs and maintains Microsoft Office and server software or a higher-end verticals service provider.

When you consider Microsoft’s great-white-shark tactic for dealing with competition in the software business, Microsoft partners should be worried, really worried.

Microsoft can say all it wants that these changes aren’t really going to hurt partners. All I can say is: Don’t listen to what it says, look at what it does. Then you tell me if your future as a Microsoft partner looks rosy.

eWEEK.com Senior Editor Steven J. Vaughan-Nichols has been using and writing about operating systems since the late ’80s and thinks he may just have learned something about them along the way.



Free Hands-On Training Lab
Find out how key features of SBS 2003 can help you open up a new line of revenue. Register now >>

SBS 2003 Sales Reference Card
This handy reference card contains features at a glance, sales objection handling, pricing guidelines & more. Get it now >>

Microsoft Empower for ISVs rewards your big idea with big benefits and support.
Access key development tools at a low cost to help you develop that idea into an innovative application. Learn more >>

Changing Business for the Better: A Practical Guide to BPM

This paper provides an overview of the benefits of BPM technologies and identifies the characteristics of BPM solutions that lead to successful BPM process-centric integration projects.

Download this free white paper to learn more!

>> brought to you by IBM

Attention Microsoft Solution Providers!

Want to gain a competitive edge? Try Microsoft Watch – FREE!

Each week you receive:
  • Microsoft News and Insider Information
  • Expert Analysis
  • Code Names of Upcoming MS Products
  • Year-Ahead Calendar, updated monthly

    Click Here to sign up now for your FREE 14 Day Trial to Microsoft Watch.
  • Add up to $1,200 of value with the new BONUS PACKS.
  • HP PartnerONE: The key to increasing your margins.
  • HP Compaq nc6129 Business Notebook. $1149 Smart Buy
  • HP xw8200 workstation. Smart Buy price $1549.
  • ProLiant DL360G4p server: HP Smart Buy price $1647
  • Microsoft files new anti-piracy lawsuits. Learn more.
  • New offers with Windows Genuine Advantage.

    •Catalog Publishing
    •Dealer Management
    •Order Configuration
    •Price Management
    •Sales Management

    View All >

    Search the jobs you want & get the info you need – post your resume here today!

    Powered by Dice
    White Boxes
    MS vs. IBM
    Linux in the Channel
    Stay in the Zone
    Put The Channel Insider on your desktop.
    Subscribe to The Channel Insider: Channel News, Reviews, Resources and more.

    Make your selections below:

    Contract Watch

    The Channel Insider Update

    Preferred e-mail format:

    Enter your e-mail:

    view all newsletters >>
    Channel Insider Quick Links
    Ziff Davis Footer Logo