Microsoft attempts to mend broken partner fences

Microsoft attempts to mend broken partner fences

Microsoft has offered its partner community both an olive branch and a carrot stick, reflecting a fundamental go-to-market shift occurring within its walls.

Predicting PC sales will return and that revenue opportunities are increasingly rife, Microsoft executives speaking at the Fusion partner conference promised to repair broken links with its partners.

"We just can't make it without you, that's the reality," exhorted Orlando Ayala, Microsoft group vice-president of sales, marketing and services.

Yet despite the sentiment, Ayala admitted that during a time of immense upheaval in the IT industry and continued problems across its company from licensing, security and channel conflicts, "we have nothing guaranteed as a company [in the future]".

To that end, Microsoft has detailed plans that are under way to restructure its MCS (Microsoft Consulting Services) division. Part of this restructure includes re-aligning its field service MBOs (major business objectives) and sales compensation plans, said Mike Sinneck, corporate vice-president of Microsoft Services. Sinneck said MCS's objective is not to build a replica of IBM Global Services - his former employer - but to expand the market as customers return to the PC upgrade cycle.

"Our commitment to [partners] is that we're not going to compete," he added.

One area where Microsoft is making concessions is in lowering the cost of phone incidents, cutting the price from $US245 an hour to $99 an hour. "It costs me a lot more than $99 to do an incident so it costs money, but it's okay," Sinneck said.

Sinneck and Ayala's comments reflect a tide of pro-partner sentiment coming from the Fusion podium. Ayala noted that despite the setbacks facing the computer industry in the past year, including a market value that sunk by $2.5 billion and industry-wide layoffs of 1.3 million, Microsoft still grew by 13 per cent.

Customer and partner satisfaction will determine 50 per cent of the bonuses for general managers and vice-presidents at Microsoft, Ayala said.

Discussing problem areas, Ayala acknowledged Microsoft has had issues with its licensing plan, but said the problem was the company did not explain it well enough. The company also wants to resolve conflicts with its channels.

Sinneck said the company plans to redouble its efforts to provide better end-to-end solutions to partners through a series of increased financial and human resources to existing Microsoft services and support programs as well as some new ones.

Sinneck said the company will take steps to ensure that there is little or no competition between Microsoft sales organisations and those of its partners, which has caused some friction in the past, he admitted. To that end, Sinneck made a promise to keep level and even reduce the headcount within the 12,000-person MCS organisation.

"We screwed that [relationship with partners] up by hiring too many people and perhaps focusing too much on profit. We will take steps to correct that by not focusing on making profits," Sinneck said.

Sinneck admitted that Microsoft has made it hard for partners to work with the company and will focus hard on tearing down a variety of barriers that prevented them from working in concert better to provide their common users with seamless solutions.

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