By the time you read this, Microsoft will have once again announced major changes to its indirect channel, those “feet on the street” resellers that are the primary point of contact — and success or failure — for the millions of small and medium-sized enterprises that consume enterprise software.
This constant tweaking of Microsoft’s partner model, which last took place in July 2008 at its Worldwide Partner Congress, follows similar efforts at virtually every enterprise software vendor. In fact, regardless of the size of the prospective customer — small, medium, or large enterprise — if a vendor has a partner channel, chances are that channel is being reassessed as never before.
While channel reorganizations are rarely noteworthy, the ones taking place this year are different for two important reasons. The first is that most vendors are realizing they can no longer afford to let a mismanaged channel mess up their customer satisfaction, something that happens all too frequently. The second reason is that the recession has made vendors more emboldened to fix their channel problems, even if it means biting the hand that feeds the revenue stream.
This effort to rein in the channel and in the process make it more responsive to customer needs should be a welcome move for manufacturers. Behind it is the realization that the channel isn’t as customer-centric as it should be, and the vendors need to take greater responsibility for their partners’ activities. Channel partners are anointed, not born, and the vendors doing the anointing owe it to their customers to get the anointment part right. Or suffer the consequences.
And suffer they do. Partner programs are notorious for the dead weight they carry in the form of underperforming resellers that take up a lot of program cycles, fail to deliver more than a handful of deals each year, and make a mess of customer satisfaction in the process.
Microsoft is attacking this problem by trying, once again, to get its partners to bulk up, consolidate, and otherwise become more valuable to Microsoft and its customers. Part of this program entails getting partners to focus on industry-specific functionality. The program also includes some serious disincentives, in the form of a much more rigid partner classification program, that could result in second-class status if the partner doesn’t get smarter, more efficient, and more knowledgeable about the entire Microsoft stack.
Microsoft’s approach is similar to that of other enterprise software vendors: Make the channel more responsive, and responsible — or else.
This channel turmoil may prove to be the best thing that has happened to many MA readers. One effect is that by focusing partners on specific industries and functional domains, customers should expect more expertise and less guesswork — and lower costs — as their implementations roll out.
More importantly, cleaning up the channel, in most cases, will include eliminating the deadbeats and shysters who have been ruining vendor/customer relations all these years, to the benefit of all.
There’s a lot of work to be done to make the channel more effective, and some of that has to be undertaken by the vendors themselves. But the new thinking about the channel is a positive step in an industry desperate for a more customer-centric approach. Sometimes it takes a massive upheaval, like a major recession, to upset the status quo. This is one of those opportunities.