Watson Nudges Microsoft Partners Toward Vertical Vision

Q&A: Allison Watson urges partners to specify the vertical markets they're selling into, but says Microsoft still will support its partners in their horizontal strategies.

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.

/zimages/4/28571.gifClick 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.

/zimages/4/28571.gifCan 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.