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Microsoft plans sales force reorganization

Major revamp to focus on adding staffers with knowledge about particular industry segments.

Microsoft is planning a major revamp of its North American sales force, with the company looking to add staffers with knowledge about particular industry segments.

Microsoft plans to overlay its current sales structure, which divides the continent into regions, with a second group that is focused on five specific industries--financial services, health care and life sciences, manufacturing, professional services and retail. Microsoft's existing public sector and communications units will also be folded into this effort.

Both regional district managers and industry general managers will have their own separate sales targets, while the individual accounts themselves will be handled by a single account manager. While such changes in organization have the potential to be quite thorny, Microsoft said it believes it is ready for the shift.

"It's a pretty significant change for us," said Bill Veghte, the corporate vice president in charge of the North American region. But, he added, "we piloted virtually every concept."

Veghte said that Microsoft has been testing the concept for about a year in specific industries and in a few markets, including Northern California and the Chicago area. The response, he said, has been positive. "It's given us the confidence to go very aggressively," he said.

The new structure will result in an increase of about 10 percent to 15 percent in the size of the North American sales force as Microsoft hires more industry specialists, Veghte said. No cuts are planned for the regional teams. "Our business is growing nicely enough," he said.

In addition to potential conflicts within its own sales force, such a shift could also impact partners, who in many cases specialize on tailoring Microsoft's broad products to a specific market. However, Veghte said that partners have been asking for the kinds of changes the company is making.

Microsoft itself has been pushing its partners to get a more vertical mindset, announcing programs such as the Industry Builder initiative, which rewards Microsoft Business Solutions partners who help push Microsoft products into specific segments.

The software maker will announce the changes internally this week and indicate that they are effective July 1, the start of the new fiscal year. Veghte, who held top posts in Microsoft's server and embedded software units, took over responsibility for the North American sales force in 2003.

Veghte said the move is part of Microsoft's evolution as an enterprise technology provider.

"What we've heard a lot from customers recently," he said, "is, 'Wow, we are using a lot of your technology, but we want a deeper and more strategic relationship with you, Microsoft.'"