Partners: A Priority

Allison Watson vice president promotes Microsoft's channel reliability.

The buck stops at Allison Watsons desk when it comes to partner satisfaction at Microsoft Corp.—a heady position, considering Microsofts nearly complete reliance on its partner channel to sell its wares.

Among other things, Watson, vice president of the companys Worldwide Partner Group, is responsible for the successful implementation of the Microsoft Partner Program, designed to enable partners to have a predictable and consistent relationship with Microsoft, something that was lacking prior to the program rollout last year.

At Microsofts Worldwide Partner Conference in Minneapolis earlier this month, Watson spoke with Senior Writer Renee Boucher Ferguson and Senior Editor Peter Galli about the Redmond, Wash., companys latest partner initiatives and its overall strategies.

Youre putting out new concepts at this conference—verticalization, for instance—but there are still some old issues partners are dealing with. 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, on behalf of Microsoft, have done significant incremental investment over the last three years. Were approximating a $2 billion annual investment—thats marketing dollars, sales force 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. We look at all partners, from all types around the world, and were at the highest level weve ever been, within the last three years, and were on a continuing-upward trajectory.

[Senior Vice President of the Business Solutions Group] Doug Burgums performance bonus must have been very small, given the partner questions in the Q&A [after his conference keynote]. 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 accountability? Because I want to make sure. I have 3,500 employees in the field directly accountable to working with partners ... and they have deep focus in the different technology areas.

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 [discussing] 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.

In particular, [partners] are upset with verticalization. They dont know what theyre going to tell their customers.

If you look at the history of MBS [Microsoft Business Solutions], 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.

Whats an example of some tools youre rolling out for partners? Do you have a database now that has partner 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 [July 10], Im announcing the Microsoft 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, 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. Where that thing is going over time is in the Windows marketplace. So this is Step 1.