MINNEAPOLIS—The buck stops at Allison Watsons desk when it comes to partner satisfaction—a pretty heady position considering Microsofts nearly complete reliance on its partner channel to sell its wares.
Among other duties, Watson, vice president of Microsoft Corp.s Worldwide Partner Group, is responsible for the successful implementation of the Microsoft Partner Program.
Initially rolled out in phases throughout 2004, MPP 2.0 was announced Saturday at Microsofts Worldwide Partner Conference here. The program is designed to offer industry partners a “predictable, consistent and flexible relationship with Microsoft,” according to the companys Web site.
In her tenure with the program, Watson has tackled a huge backlog of partner complaints, including overlapping territories, a lack of support and outright competition from Microsoft. And the issues are by no means solved completely.
Now Watson is tasked with bringing partners on board with Microsofts newest strategy around verticalization and selling an integrated portfolio of products, from Microsoft Classic infrastructure to Business Solutions software.
Watson spoke with senior writer Renee Boucher Ferguson about her plans moving forward. And stay tuned for part two of the question-and-answer session, when senior editor Peter Galli joins the conversation with Watson.
Im confused about how the MBS applications are going to interoperate with the Microsoft stack going forward, and it looked like there might be some confusion from partners as well. Can you help me out here?
The theme of the conference is about how we bring the story together to drive business outcomes for customers. I framed up this morning a challenge that our customers are having, and how Microsoft is responding in both R&D and what I also call sales and marketing innovation with our partner channel, and how to go to market with them to deliver, in a new way, for our customers.
The concept of the past 30 years, as businesses have tried to solve business productivity challenges, is that processes tend to be very structured in the business—the standard way you do IT, the standard way you do finance, and the standard way you do sales and marketing. And you wonder after 30 years of selling technology solutions—be it ERP or CRM or B2B—why we still have not solved the business productivity challenge?
The reason is because of people. We talk about people and we start to frame the concept of individuals acting within their roles. Youre a reporter; I am a sales and marketing executive. Every day I come to work and Ive got my agenda driven by my priorities, and whether or not IT helps me, its whether or not it helps me do my job and if I interact with the processes that are set up through technology in my company.
So, we frame today that the challenge is the nexus of bringing people and process together, with people in the center. Thats really a fundamentally different way of thinking. If youre thinking about ERP [enterprise resource planning] and CRM [customer relationship management] in our stack, instead of thinking about enabling the business and financial and customer processes as stand-alone, you start to think about what are individuals in their roles doing, and how do we then drive innovation.
In order for people to be successful, we have to work with four attributes: empowerment, insight, connectivity [of] people and data, and really the concept of processes being able to adapt to the way people work.
If you look today at the current generation of ERP and CRM—if you look at current processes—many of the applications have been built with a standard way that business process is enabled. If you want to install the application in your company, then you have to adapt your company and your process to the way the software is developed.
We believe the critical link is that there is a layer built that has adaptable processes in it, so that as people change their processes, the underlying system that delivers ERP and finance, CRM, will have orchestration across a line of business systems, so things like BizTalk can adapt.
So, thats kind of the critical link. Now that also has to be surrounded by a platform of great fundamentals: secure, management, scalable, trustworthy computing platform. So, the genesis of what were doing is starting to deliver software that puts people at the center.
So, this is basically developing a composite application platform that brings in infrastructure and applications?
Yes, its about three layers, right? An individual in their role having the tools that they know how to use already to do what they need to do. Its about the layer in the middle, such that if they are changing business process then they dont have to take two years to issue a change request in an IT system, or change their process to accommodate. And the bottom layer is about how to do that quickly.
Where does verticalization fit into all of this?
So, if I were to frame how the Microsoft story comes together for innovation, its this: our platform and our software plus the Microsoft partners—innovation across both to deliver customer advantage.
If you look at how we build to deliver across this view of empowering people, its great software and partners on top of it that are going to deliver the ultimate solution. As partners deliver, theyre going to deliver whatever way the partner needs.
We think there are three key ways partners express their needs for this sort of technology deliver. One is very horizontal. Were going to talk about an information worker solution, were going to talk about an infrastructure solution, or a security solution. Very horizontal isnt going anywhere, and in fact I think its a huge opportunity.
The second major area is really around a concept that I call role-based specificity. So, if you drill into “information worker,” not at the vertical level but a horizontal level, theres a role—a finance professional, a customer relations professional, and in that case, youre not in a vertical line of business, youre in a horizontal area, but with role-based situations. So, when you drill into “information worker,” youre going to get role-specific. And thats where you get partner opportunities.
The third is what I call vertical- and industry sector-based solution. I need an equipment-tool manufacturing solution that understands how I bring my equipment tools from point A to point B. Often those needs will be expressed at the industry, or down to a vertical layer.
So, Microsoft Partner Programs promise, and the innovation were driving, is going to accommodate the business productivity problem across all of those. Very, very horizontal, traditional Microsoft Classic fundamentals; roles-specific horizontals; and then the vertical line of business applications.
When you talk about partners taking a vertical approach, are you talking about partners who already sell the Microsoft [Classic] stack, or who sell the applications? Who is more important in this scenario?
In terms of where we are today, the call to action at this conference is about those partners in the Business Solutions business, those partners who are building ISV applications of any type that are vertical in nature, and for those partners doing custom development solutions that are line-of-business specific.
Those are the three partner types, where we are encouraging them to go further and forward with declaring the verticals theyre in, and anticipating how they can be repeatable in their solutions.
Thats who were targeting. Now if I am an entirely a big-stack partner, a guy that says I want to go all the way from infrastructure all the way to business solutions and information worker along the way, if their business can be suited to a vertical market, we have them going there as well. Were not excluding them, but our primary focus is around people that are going there anyway.
That sounds like a push also to get those stack partners to sell the applications.
Talk about the power of the Microsoft ecosystem in the market. I often talk about the multiplier effect: Why does Microsoft matter in the market, and why does it matter for customers?
Take a partner of any type, doing either one or multiple areas of focus, and another partner doing complementary work, theres two ways we grow our business: partners who bring it all under one fold, or partners partnering together.
The genesis is partners partnering together along the stack. I am hearing from partners that 40 percent of growth is coming from those types of partners.
Partners that I have talked to have talked about some of the things youve done to alleviate some of the partner issues—territory overlap, a lack of response from Microsoft, not a lot of incentive for companies to actually grow. So, youre putting out new concepts here, but there are still some old issues out there. What are you doing to tackle the remaining issues in the partner channel?
The way were doing it is were stating the direction of where were going, and then were holding the Microsoft team accountable to deliver, and were holding Microsoft partners accountable to make sure we are delivering. I frankly am not hearing [about issues] as much anymore.
I am hearing feedback from partners that if they take the time to understand the range of innovation we are delivering for them, and they sit down and put a business plan together, that their profits are increasing, revenues increasing.
So, Ive painted a picture of where were going and I, on behalf of Microsoft, have done significant incremental investment over the past three years. Were approximating $2 billion annual investment—thats marketing dollars, salesforce investment, and tools and infrastructure systems investment to drive profitability, with the No. 1 goal of profitability for partners.
I cant guarantee that theyll be profitable, but I can guarantee that I can show them how were creating profitable business models for them.
How are you holding Microsoft employees accountable?
At the executive level of Microsoft, 750 level, so the top 750 executives at Microsoft, have a significant portion of their bonus compensation based on partner satisfaction. We rolled that out two years ago broadly, and we set a very aggressive measure.
Our partner satisfaction results, which we measure not only at the highest level of satisfaction, but every step along the way: Are you satisfied with sales and marketing? Are you satisfied with business opportunities? Are you satisfied with how you interact with us? We look at all partners, from all types around the world, and were at the highest level weve ever been, within the past three years, and were on a continuing upward trajectory.
Stay tuned for Part 2 of the interview, when senior editor Peter Galli joins the conversation with Watson.