Watson Nudges Microsoft Partners Toward Vertical Vision

By eweek  |  Posted 2005-07-13

Watson Nudges Microsoft Partners Toward Vertical Vision

MINNEAPOLIS—At Microsofts Worldwide Partner Conference here, eWEEK senior editor Peter Galli and senior writer Renee Boucher Ferguson continue their conversation with Allison Watson, vice president of Microsofts Worldwide Partner Group.

Click here to read the first installment of the interview with Watson.

Peter Galli: Doug Burgums [the senior vice president of Microsofts Business Solutions group] performance bonus must have been very small, given the partner questions hes been facing.

One after the other, they were very angry—about the verticalization, about the fact that they didnt understand the policy, about the fact that the sales force often doesnt know the product and werent responsive. His response was, "Well, we hope it gets better by next year."

Thats not good. But just quickly, did I cover off on accountability? Because I want to make sure. I have 3,500 employees in the field directly accountable to working with partners. As a Partner Technology Specialist, and what we call a Solution Sales Specialist, they have deep focus in the different technology areas.

I have someone focused on Axapta, I have people focused on CRM [customer relationship management]; I have people focused on security solutions. Those people are measured—50 percent of their compensation is measured on revenue, whether direct or indirect that comes in from partners.

So, if youre in a services business, and you dont sell any Microsoft software—not the resale business—the indirect revenue that you do sell is [considered] half of that persons compensation. The other half of the compensation is related to partner satisfaction and execution against profitability targets for the partner. So, its a very accountable model end-to-end.

So now, Peter, how would I say we would respond to people who are still out there. First of all, I hear a lot less of that [disgruntlement]. To be fair, the Doug Burgum keynote is historically known for people bringing whatever is on their mind, and it is the place where more people come with bad attitudes than good attitudes. Doug, in particular, has always encouraged people to bring their most negative stuff out in front of the people. Because thats his culture.

Renee Boucher Ferguson: This is the most negative Ive seen …

Oh really? Were you here last year? It was much better [than previous years].

Galli: In particular [partners] are upset with verticalization. They dont know what theyre going to tell their customers. There are a lot of specialization issues that are not sitting well with partners.

OK, well, let me try to frame it out what it is. In terms of the partner innovation on top of the platform, its horizontal in nature for Microsoft competencies. Its role-based, meaning as I talked to sales and marketing, HR, think about role-based solutions that are based on Microsoft information worker platform. Thats a horizontal opportunity, not vertical.

We need thousands of partners to meet our share and growth goals, and to meet profitability targets, in our horizontal competencies, and taking to role-based desktops. So, if I just had a conference alone, it would be enough to grow Microsoft business more than double-digit, small, midmarket and enterprise next year.

Then were saying, hey, for those of you in MBS [Microsoft Business Solutions], for those of you that are ISVs of any kind, and for those of you that are custom developers who build line-of-business applications for a living, were saying we want you to continue doing what youre doing, but recognize where your unique specialization is.

Can Microsoft make over MBS? Click here for a column by Mary Jo Foley.

If you look at the history of MBS, the partners have been selling into vertical markets already. So, heres our message: Keep that focus, but start calling it out very specifically. We want you to tell us if youre doing the entertainment industry, or oil and gas, please tell us, and were going to ask you within the geographies that you serve, what vertical market you serve on what platform, and what ISVs youre partnering with to deliver that.

And then were going to make that information available to customers. So, its not about telling them to do something different than theyre already doing. It is going to say, hey, weve done a market map in St. Louis, and it turns out there is a pretty big beer-distributor industry, and we dont have enough partners in St. Louis.

So, were going to say, hey partners, if youre in the distribution industry, we need you to beef it up. Or hey, partners, heres a big opportunity in St. Louis in beer distribution, and we dont have any partners focused on it. Thats where I think we are going to get very systematic. Youre going to see some of the new tools were demoing to bring that to life.

Next Page: Building a vertical solution profiler database.

Vertical Database

Ferguson: Whats an example of some tools? Do you have a database now that has all of this information thrown in there?

Yes and no. Id say, not unlike my competitors who will tell you how easy it is, I have a database thats been up and running. But tomorrow [Sunday, July 10] Im announcing one thats the next generation of really taking that out, so Ill be announcing the Microsoft Solution Profiler Database. Ill be encouraging all 6,200 partners to make at least one entry into the vertical solution profiler database.

From that database, we have two applications running against it. One is Partner Channel Builder, and that is being launched with what I call flexible and rich search, not unlike MSN Search, in terms of easy and simple keyword search, to search for other partners that will be either complementary in your skill across the stack, or complementary between resale ISV services and MBS.

The second application, launching in the fall, is the Microsoft Solution Finder that introduces a customer search engine. Again, a very simple UI designed to be meeting both horizontal and vertical application needs, location specific search, keyword search, etc., for which partners will qualify to put opportunities into the solution profiler.

There are Microsoft Partner Program points and then Microsoft designation and competencies—things that will rank them higher if theres going to be a tie between solutions. So, its the brand that carries Microsoft that will make a difference—and then well present rich search to our customers.

We really want to turn on the customer finder, with all the marketing around it for small, midmarket and verticals, over the next six months. And enterprise, I should say. Where that thing is going over time is in the Windows marketplace. So, this is step one. And the Windows marketplace vision weve been telling you about over the past 12 months.

Galli: Whats the time frame for actually moving into the Windows marketplace?

On the technology side, were already working on it. Weve got some really cool stuff coming because were fully enabling all the Longhorn excitement around Web services with our Solution Profiler.

So, imagine this wonderfully rich solution profiled, and you may go into a searchable database generically, but now you want to say, "I want to go to a third-party Web site about the entertainment industry," and the entertainment industry wants to provide information on technology for their businesses.

Well, wouldnt it be great if there is a Windows marketplace Web service that calls out the queries, the preselected queries online, and then gets presented on the third-party industry Web site. So, thats kind of where were taking it. But Ill talk to you more about that next year.

Galli: What about those businesses [partners] who may have solutions that span a couple of verticals? They see themselves covering a more broad base, and youre asking them to see themselves in boxes.

One thing to highlight to partners is this is not an either/or thing, its a both. If your business is about horizontal ERP for blah, blah, blah, and thats how you sell your business and youve been wildly successful, more power to you. And were going to continue to support you. At the end of the day, our incentives dont change.

You dont get penalized if you dont say I am a vertical market; you dont get extra credit if youre in a vertical market only. That may be the genesis of the confusion out there, is really clarifying that message, and Ill make sure I do that.

Ferguson: So, just to be clear, Microsoft is not going to be developing any horizontal applications?

Correct. Its absolutely for partners to take that on.

Galli: So, what youre saying is partners who are already working in the vertical solutions, youre just asking them to say what those verticals are, what their target market is, and how they would like you to promote them?

Correct. And encouraging them, where they are vertically focused, to do promotions in that area, and where they are horizontally focused, to continue in that area as well.

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