Microsoft FY18 Partner Strategy

At the recent Microsoft Inspire partner conference, Microsoft announced major improvements to how they support partners for the year ahead (FY18). This article summarizes their new partner strategy and the opportunity for managed partners to tap into Microsoft co-sell resources.

Microsoft’s One Commercial Partner (OCP) organization is meant to simplify the partner experience with Microsoft and align incentives with Microsoft sales teams. The framework for partner support is “Build-With”, “Go-To-Market”, and “Sell-With”. This framework applies to ISV, Systems Integrator, Managed Service Provider, and Reseller (channels) partner types.

Overarching customer themes remain the same as FY17: Empower Employees, Engage Customers, Optimize Operations, and Transform Products. These are addressed through 4 main Microsoft workloads: Modern Workplace, Business Applications, Applications & Infrastructure, and Data & AI. Microsoft FY18 scorecard items include the following:

  • Azure Consumed Revenue (ACR)
  • Azure Customer Adds (ADA)
  • Dynamics 365 Customer Adds + Revenue
  • SQL Server + Azure Data Services Revenue
  • Office 365 Commercial Paid Subscribers
  • Office 365 Active Commercial Usage
  • SPE (Microsoft 365) E5 Commercial Subscribers
  • Windows 10 Enterprise Deployment

Organization

Microsoft is implementing a major change in the sales organization structure. The former EPG and SMSP (CAM, CTM, SMB) segmentation no longer applies. Instead there will be Enterprise and Small Medium Corporate (SMC). Historically, the break point for EPG coverage was ~1,000 employees. Employee count will no longer be the criteria for Enterprise account coverage.

The Microsoft Account List will be redefined to incorporate cloud potential: expect this list to be finalized in August. SMC coverage will be provided by tele-coverage teams, shifting field sales resources away from the upper mid-market coverage in favor of more 1:1 management of enterprise accounts.

In the US, there will be East and West regions (vs. East/Central/West in FY17) and 8 districts within those regions (vs. 14 US geographic districts in FY17). This means some territories will merge. While the organizational blueprint has been defined, it will take a few weeks for Microsoft staff to understand their new roles and objectives.

Microsoft is also returning to a strong industry focus (particularly for financial services, manufacturing, retail, education, healthcare, and government). Top partners will be represented in “solution maps” which Microsoft field sellers will use to prioritize which partners to lead with. Note that to qualify for a solution map, partners will need to commit to getting listed in AppSource or the Azure Marketplace.

Enterprise sales teams will continue to have Account Team (ATU) and Specialist Teams (STU), plus a new Customer Success Unit (CSU). Sales teams will not have quota for new Azure contract sales (unlike FY17) and will continue to have quota for Azure Consumed Revenue (ACR). As a rule of thumb, each field seller is expected to drive an incremental $1M in Azure revenue in FY18.

Co-Sell Ready ISV sales will result in ACR quota offset for Microsoft sellers, similar to H2FY17. This ISV incentive resulted in $1B in Microsoft retired quota in H2FY17. New for FY18, partner sales of Office 365 will apply to Microsoft field sales Office 365 quota objectives.

Note: I’ve updated the Microsoft Acronyms for Partners to include the new role and organizational acronyms.

Partner Resources

Microsoft is investing in partner co-sell incentives and headcount (including 600 channel managers worldwide). Partner teams are organized around the “Build-With”, “Go-To-Market”, and “Sell-With” framework. Co-Sell partners will have access to a Partner Development Manager (+ supporting Partner Technical Strategists) for Build-With support. Partner Marketing Managers (+ supporting Partner Channel Marketing Manager) in the Go-To-Market team will manage co-marketing resources. Sell-With is supported by Enterprise Channel Managers. The SMC customer segment will be served by Territory Channel Managers. Note that channel managers are assigned to customers, not dedicated to specific partners.

To qualify for co-sell engagement, partners will have to maintain a Gold Microsoft Partner Network Competency and have a Partner Seller (P-Seller) on staff (in addition to exceeding Azure consumption criteria which will be built-in to the Competency requirements). Azure Marketplace or AppSource listing is preferred but not required.

Sellers will be able to rate partner co-sell execution based on sales and implementation performance. This will keep accountability on Microsoft partners to execute well on the Partner Connect/deal registration management as well as solution delivery.

Product Announcements

This year’s partner conference was relatively light on product announcements. The key news was Microsoft 365 which merges Office 365, Windows 10, and Enterprise Mobility & Security capabilities into 1 subscription-licensed suite. Available in both Enterprise and Business (SMB) versions, it will generate monthly recurring revenue streams for Microsoft and its partners.

Steps to take in July/August

Microsoft was able to communicate enough of the planned changes for the Microsoft employees to intelligently engage partners at Inspire. Microsoft staff will gain deeper insight into OCP implementation and their specific roles/objectives at Microsoft Ready, Microsoft’s Public Sector kickoff (ISU), and District Kickoffs (in July/August). Managed partners should maximize their alignment and exposure as Microsoft sales teams initiate account planning activities (in August). Actions to take in July/August:

  1. Assert your relevance to Microsoft industry stakeholders to stake your claim on the appropriate industry solution maps
  2. Increase your awareness with regional Microsoft teams
  3. Map your leads/opportunities to strategic accounts in the Enterprise segment
  4. Summarize your Microsoft FY18 scorecard alignment and co-sell capabilities in time for the Microsoft account planning cycle

 

Maximize Microsoft Inspire

Microsoft Inspire (formerly the Microsoft Worldwide Partner Conference) will be held July 9-13, 2017 in Washington, D.C. Inspire is a great opportunity to learn about Microsoft’s product and channel strategy, engage Microsoft partner sales teams, and advance your own channel development objectives.

Inspire is also the forum where Microsoft recognizes its most productive partners with awards. The Microsoft Partner of the Year awards provide credibility for customer, channel, and Microsoft engagement and garners over 2,800 award entries from 115 countries. I’m thrilled to share that 2 Competegy clients won Partner of the Year awards this year: PROS (Global Commercial ISV award) and ICONICS (Application Development award). Competegy clients have won a total of 6 Microsoft Partner of the Year awards over the past 6 years!

I’ve attended 11 Inspire/WPC events and have always found them to be the most productive days of the year. Maximize your Inspire results through the suggestions below.

Maximize Microsoft Inspire

Define Event Objectives

Inspire provides a host of learning and networking opportunities including keynotes, product and marketing sessions, evening receptions, regional lounges, side meetings, scheduled networking, and the expo hall. Most valuable of these is the capability to set up 1 on 1 meetings with other attendees. In general, prioritize side meetings because most of the session content is available afterwards.

Recruit New Partners

There are over 40 half-hour meeting slots available (49 if you include the Sunday arrival day) and a scheduling tool (MyInspire) to locate and organize meetings with prospective partners. About half of the 16,000 attendees opt-in to this networking tool. SIs historically represent the largest group of partners attending. If you wish to recruit new partners at Inspire, I recommend the following preparation steps:

  1. Define your target partner criteria (including Microsoft competencies, company size, geography, and company type).
  2. Develop your partner pitch including projected partner revenue. Consider a short term offer to motivate new partners (that expires 90 days after Inspire).
  3. Research potential partners by mining the MyInspire networking tool and correlating with LinkedIn profiles as needed.
  4. Leverage the MyInspire tool to identify attendees, secure meeting space (over 100 tables are provided), and propose meeting times. Contact partners outside of the MyInspire tool if you don’t get a response (MyInspire meeting messages are sometimes lost/ignored).
  5. Document key points during your onsite meeting and follow-up promptly with viable partner prospects after the event.

Exhibiting at Inspire is best if you sell to other partners. If your intent is to partner with other companies, focus your efforts on scheduling the right MyInspire side meetings.

See the Channel Development Best Practices whitepaper for insight on recruiting channel partners.

Refresh Marketing Plans with Existing Partners

Microsoft budgets and priorities reset July 1 so Inspire is the perfect time to engage partners in context of those Microsoft directives. Meet with your existing partners at Inspire to discuss co-marketing plans and sales-coordination.

  1. Understand your own partner co-marketing objectives, budget, and campaigns.
  2. Identify your existing partners attending Inspire (using the MyInspire tool).
  3. Schedule onsite partner meetings to define H2 marketing plans.
  4. Understand Microsoft FY18 strategy and incentives as articulated in Inspire keynotes and sessions.
  5. Meet with partners to document joint marketing plans.

Grow Microsoft Co-Sell Relationships

Over 4,000 Microsoft employees attend Inspire. Microsoft enterprise sales teams don’t attend so focus your efforts on meeting Microsoft partner enablement roles including Partner Sales Executives, Industry Sales Executives, Partner Business Evangelists, and Marketing Managers. Seek side meetings product group speakers that align with your solution. If you are a managed partner, request Microsoft senior executive meetings via your PSE or GTM Lead.

Prepare for Microsoft meetings as follows:

  1. Create pithy talking points for your Microsoft FY17 accomplishments (in context of Microsoft priorities) as well as what you want to achieve with Microsoft in FY18.
  2. Research relevant Microsoft attendees and schedule side meetings using MyInspire.
  3. Microsoft should have determined FY17 managed partners before Inspire, so kick off go-to-market planning with your PSE/GTM Lead at Inspire, in context of whatever partner status you’ve attained by then.
  4. Seek out and participate in side events including roundtables, meetings, meetups, and parties. Your PSE, PBE, or GTM Lead can help identify these opportunities (the ISV and NSP Kickoff meeting and the US EPG Partner Meeting are particularly useful).
  5. Document meaningful conversations and follow-up. Note that Microsoft has internal training (Microsoft Ready, Microsoft ISU) and vacations in July so don’t expect material progress until August/September.

See the Co-Selling with Microsoft Best Practices and 10 Tips for Partnering with Microsoft whitepapers for insight on maximizing your Microsoft alliance.

Learn About Microsoft Product and Channel Strategy

Use the MyInspire session catalog to determine top priority sessions to attend (as well as alternates in case the content or presenter isn’t compelling). Attend only sessions essential to your business (keynotes and select breakouts). Most content is available afterwards as PowerPoint files and video, so prioritize onsite meetings and diligently review the content afterwards.

Engage presenters after their session if they are important to your business. Also look for opportunities to network with Microsoft attendees at side events. There are excellent contacts to be made everywhere at Inspire.

See the Top Takeaways from Microsoft WPC 2016 for insight on last year’s partner conference themes. See the Microsoft Acronyms for Partners to decode Microsoft jargon.

About MyInspire

Seek to book 30+ meetings with the MyInspire networking app (available June 7). Leverage the delegation feature if you aren’t detail oriented or don’t have the time to manage your schedule yourself.

Unfortunately, many Microsoft attendees do not opt-in for MyInspire (they need to reserve time for their high-priority partners). Request those Microsoft meetings well in advance through existing relationships.

Save visits to the Expo for those meetings that fall through. The exhibitor area is typically nearby and serves as good filler for those inevitable schedule gaps.

For both Microsoft and partner meetings, have a defined “offer” in mind that encourages action. Follow-up promptly afterwards where there is partnering potential, summarizing common interests and next steps.

Next Steps

Competegy provides partner search, meeting management, and evangelism services at Microsoft Inspire. Learn more about partnering with Microsoft via the Competegy ISV Strategy Blog and join the Microsoft ISV LinkedIn Group to discuss cloud, mobile and channel development strategy.

 

Microsoft Acronyms for Partners

Keeping up with Microsoft jargon can be a challenge, especially if you don’t live it day to day. Following is a simple list of common Microsoft acronyms that Microsoft partners encounter.

Microsoft Acronyms for Partners


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Co-Selling with Microsoft Best Practices

Microsoft rolled out significant new incentives in 2017 which aligned Microsoft enterprise sales teams with those partners driving substantial Microsoft cloud revenue.

Microsoft

This whitepaper reviews the resources and best practices to effectively leveraging Microsoft’s ISV co-sell incentives. In particular, it reviews the relationship between the Microsoft Partner Network, Managed ISV, and Co-Sell designations then dives into the elements of a successful Microsoft co-sell strategy including:

  • Co-Sell Readiness,
  • Microsoft Evangelism,
  • Co-Sell Management, and
  • Co-Marketing Execution

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What’s New for Microsoft 2017 Partner of the Year Awards

Every year Microsoft recognizes partners delivering innovative customer solutions at their annual partner conference (formerly the Microsoft Worldwide Partner Conference, now Microsoft Inspire).

WPC16
The award nomination tool is now open for submissions and all entries must be received by April 6, 2017.

This year there are a few changes to the available award categories. New additions include:

  • Global ISV Alliance: reserved for a WW DX-managed ISV that leverages cutting edge Azure technology.
  • Cloud Apps: recognizes an SI partner that has designed, developed, and deployed Azure apps for Enterprise customers. Cloud Platform and Application Integration competencies are required.
  • Customer Experience: recognizes a partner who demonstrates an exceptional ability to manage customer demand and exceed expectations. A PowerPoint presentation and customer references are required.
  • Mobile App Development: recognizes a partner who has delivered mobile solutions based on Xamarin. Application Development or DevOps competency (or participation in the Xamarin Partner Program) is required.

A number of award categories were removed, some reflecting Microsoft’s retirement of competencies that don’t focus on cloud or mobility:

  • Volume Licensing
  • Software Asset Management
  • OEM
  • Hosting
  • Microsoft Azure Certified for Hybrid Cloud
  • Microsoft Azure Certified ISV Solution
  • Dynamics Industry
  • Modern Marketing

The nomination process is similar to last year. See the 10 Tips to Winning a Partner Award for proven best practices in writing a winning award nomination!

10 Tips to Winning a Microsoft Partner Award

It is that time of year again: the countdown to Microsoft’s annual partner conference (Inspire) where Microsoft strategy is shared with the channel and top performing partners are recognized. The Microsoft Partner award nomination tool is now available and submissions are accepted until April 6, 2017.

Inspire2017

Receiving an award from Microsoft can serve as a valuable marketing tool: awards help attract new customer prospects, provide sales credibility, trigger new partnerships, and facilitate Microsoft field sales engagement.

Microsoft has the largest software partner ecosystem.  They receive thousands of submissions for the partner awards, with winners recognized at the Inspire conference in July. That’s a lot of competition!

As a former partner award judge (and enabler of 4 Partner of the Year award wins), I offer the following helpful tips to improve your chances of winning:

  1. Understand the process
  2. Meet the criteria
  3. Follow the rules
  4. Answer the questions concisely
  5. Quantify your results
  6. Tell customer stories
  7. Write like a journalist
  8. Take Microsoft’s perspective
  9. Don’t wait until the last minute
  10. Leverage the award writing process to invigorate your Microsoft partner relationship.
  11. BONUS TIP: Pursue subsidiary awards

A detailed explanation of these steps and the keys to writing a successful nomination are in the following document.

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Microsoft Co-Sell Opportunity for Partners

If you’ve been paying attention to Microsoft, you know that cloud (Azure and Office 365) is their top priority. They’ve been communicating the shift to cloud computing for years and providing incentives to transition their partner ecosystem to leverage and sell Microsoft cloud offerings.

clouds-cash

What’s New

This year, Microsoft is taking another bold step by encouraging internal sales teams to actively sell with cloud partners. This encouragement is backed by real incentives (including cash awards and quota relief) so it works (unlike altruism-based attempts in the past).

This Microsoft co-sell opportunity applies across partner types, but I’ll focus on ISVs — this is the ISV Strategy Blog after all. 🙂

Managed ISVs

Historically ISVs were either “managed” or not. Being managed enabled access to a partner account manager (such as a “Partner Business Evangelist”) and often came with marketing and development incentive dollars.

Co-Sell Ready

This year there is further managed partner distinction based on the amount of Azure consumed over the trailing 12 months. If you reach the threshold, you can be designated a Co-Sell Ready partner (or better yet, Co-Sell Recommended). This means you can be discovered by Microsoft field sellers and receive leads.

If you are a managed ISV, you’ve undoubtedly been notified of this opportunity. The key is to create a compelling profile in the internal Application Catalog and execute well with the lead sharing tool (including coordinating across sales teams).

Call to Action

These systems are already in place and partners are receiving leads, but take action now to ensure you’re lined up to receive additional leads when Microsoft field incentives go live in January.

Unmanaged Partners

P.S. Even if you aren’t a managed partner, Microsoft still offers light marketing support if you align with Microsoft’s cloud mission. The go-to-market concierge desk provides social media mentions, press release quote support, and other marketing benefits. Ask your local Microsoft contact and they can connect you to the GTM team for consideration.

Microsoft Marketplace Insights

Microsoft’s Azure Marketplace currently features over 1,000 VM solutions from over 360 partners. Microsoft AppSource features over 200 solutions from 100 partners. This article addresses the value of being listed in the Azure Marketplace, the associated challenges, the current composition of marketplace offerings, and comparison with Microsoft’s AppSource marketplace.

Microsoft Marketplace
Partner Value

Customer access is the primary partner motivation for getting listed in the Azure Marketplace. Enterprise customers with Azure contracts are encouraged by Microsoft to leverage Marketplace solutions. People with an Azure account can peruse the available offerings and download applications to run against their own Azure services contract. This is the preferred approach by Microsoft field sellers and is referred to as Bring Your Own License (BYOL).

Customers can also locate applications and services (including developer services, web applications, and data services) to run on the partner’s Azure instances. This catalog helps improve discovery by IT professionals at enterprise customers.

There is also a set of authentication solutions (using Azure Active Directory) which help with single sign-on authentication across cloud applications. These serve as a useful utility to existing apps but won’t drive significant customer awareness or trials.

In addition to customer visibility, partners obtain better alignment with Microsoft enterprise sales teams when they publish a VM to the Azure Marketplace. Co-selling with Azure Marketplace ISVs is a top priority for Microsoft in FY17, particularly where partner applications use the existing Azure contract of the customer (as an Azure Marketplace VM).

Microsoft Motivations

Microsoft has successfully sold Azure agreements as part of Enterprise Agreements. Because these Azure agreements reflect a block of pre-paid services, it is imperative not to leave excess unused services on the table at the end of the contract period. Otherwise, the customer will be reluctant to expand their Microsoft cloud consumption at renewal time. For this reason, there is substantial motivation (in the form of seller quota and subsidiary scorecards) to drive utilization of existing Azure contracts.

As a partner, if you deliver solutions that drive intense Azure consumption, you will receive preferred support from Microsoft sales and partner teams.

Challenges

The act of automating the Azure Marketplace installation process can be a challenge for some ISVs, particularly those that require professional services to tailor their solution for each customer. Installation requires working with Azure Resource Manager templates to script the deployment (and all software dependencies). While sample templates are available, this effort takes away from other ISV development efforts.

While many partners have been listed in the Azure marketplace, some complain the onboarding process lacks structure and transparency. Of particular concern is the lack of visibility as to the status of their submission and the reasons for rejection. Microsoft has a team focused on revising the portal which will provide more clarity on publishing and certification progress (and expected SLA). Expect the first improvements to be seen in Q1 2017.

More importantly, the purpose of listing in the marketplace is to drive sales. However, customer leads (of those that download VMs from the Marketplace) are not shared with partners today. Microsoft is evaluating the amount of information to share, balancing the privacy requirements of the customer and the reporting needs of ISVs. Expect reporting to include customer lead info and high level Azure consumption starting in 2017. This will not only help ISVs follow-up on customer interest but also provide overall consumption reporting to incent collaboration by Microsoft field sales teams (they need to receive credit for working with ISVs in their accounts).

Marketplace Composition

I recently reviewed all of the Azure Marketplace partner offerings. Of the 770 VM solutions, approximately 20% were provided by Bitnami (a company known for scripted application packaging). 70% of the ISVs offer a single Azure Marketplace listing. So for most, the learning curve of ARM template scripting isn’t reusable. However, there is an argument that providing a scripted deployment is a DevOps best practice; for ISVs not “born in the cloud”, the exercise could improve “deployability” of their solutions.

I would categorize the types of VM solutions as: security, storage/data management, DevOps, BI, media management, and open source platforms. There were some interesting industry specific examples (e.g. biotech), but most solutions were infrastructure/platform oriented. This makes sense because IT professionals and developers would have access to the Azure console and therefore know how to make sense of a VM solution from a partner. Note that some of the infrastructure solutions are also listed in the AWS Marketplace.

AppSource

Microsoft AppSource was introduced at Microsoft’s Worldwide Partner Conference this July. AppSource is geared toward business decision makers, not IT. It doesn’t accommodate VM solutions deployed by IT, but rather features SaaS partner solutions. In particular, it enables discovery and trial of line of business SaaS solutions.

AppSource has a limited number of partner listings given its recent debut but If Microsoft puts marketing promotion behind AppSource, it could emerge as a significant value to Microsoft partners. Most of the currently listed solutions integrate with Dynamics with 30% of the 200+ solutions provided by the top 2 partners.

Conclusion

In summary, Azure Marketplace represent a moderate development investment by ISVs and is a good fit for solutions targeting IT within existing Azure enterprise customers. AppSource is a better fit for line of business applications implemented as a SaaS model.

If you would like to learn more about engaging Microsoft as a sales and marketing partner in context of your Azure solution, request an introductory meeting via info@competegy.com.

10 Tips for Partnering with Microsoft

Microsoft partners invest valuable time and money sustaining their Microsoft relationship. Partners that understand how to efficiently access Microsoft sales, marketing, and technical resources can accelerate business growth. Use the following whitepaper (revised for Microsoft’s FY17) to make the most of your Microsoft partnership. It has been revised to include current Microsoft priorities, incentives, campaigns, and co-sell criteria.Partnering with Microsoft

In summary:

  1. Understand Your Partner Potential (using the Competegy ranking criteria)
  2. Determine Scorecard-Driven Motivations
  3. Decode the Organizational Structure
  4. Refine Your Message
  5. Target the Relevant Roles
  6. Engage in Context of Customer Opportunities
  7. Actively Manage the Marketing to Sales Process
  8. Leverage Microsoft Co-Marketing Resources
  9. Publish to Microsoft Marketplaces
  10. Monitor for Competitive Mind Share

The "10 Tips to Partnering with Microsoft" helps Microsoft partners understand how best to engage Microsoft's partnering resources and go-to-market channels.

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AWS Summit 2016

I had the opportunity to attend the AWS Summit in NYC this week. Boasting 10,000 registrations, this was much larger than the last AWS event I attended.

AWS_Summit_NYC

The structure was 1 day of free access to the keynote (by Dr. Werner Vogels, Amazon CTO), product sessions, and the partner expo (there was also a paid pre-day for training bootcamps). Renting out the Jacob Javits Center and providing lunch to so many unpaid attendees represents a significant investment by Amazon. The event targeted technical decision makers with most of the topics focused on new cloud services (see related product announcements). Amazon is hosting similar events in other cities.

Amazon boasts over 1 million active users per month, an $11 billion annual run rate, and 58% year over year growth. There are similarities with Microsoft’s vision including the Digital Transformation customer imperative and shifting to microservices to facilitate cloud scale. I liked Amazon’s messaging on “eliminating waste” (anything that doesn’t benefit customers) vs. Microsoft’s partner emphasis on increasing consumption.

My purpose for attending AWS Summit was to understand AWS messaging and see how partners in both ecosystems (with Amazon and Azure marketplace offerings) view customer opportunity and channel potential. Partners I spoke to (even those with Azure marketplace offerings) believe Amazon is the cloud incumbent and a safer bet, particularly those providing value-add cloud operations services. Amazon is the IaaS leader with designs on PaaS with Microsoft has focused primarily on PaaS infrastructure and catching up on IaaS.

There appears to be a thriving value-add community around AWS as a platform whereas Microsoft hasn’t published as many APIs and/or wants to retain more control over the core cloud services. From my perspective, Microsoft’s ISV priority is on enabling higher level applications to run on top of Azure (vs. growing operations and infrastructure ISVs).

There remain a lot of similarities between the partner motion at Amazon and Microsoft but when it comes to enterprise selling, Microsoft still has an advantage with superior enterprise presence and renewed focus this year on co-selling with partners. In addition, the partner to partner initiatives at AWS are still a long way away from Microsoft’s partner ecosystem maturity. Amazon is missing an opportunity by not enabling these ISV-SI-VAR partner connections: repeatable customer solutions will drive cloud service utilization at scale.