Microsoft gets specific with partner program

Looking to foster the expertise of its resellers, the company offers new incentives.

Ina Fried Former Staff writer, CNET News
During her years at CNET News, Ina Fried changed beats several times, changed genders once, and covered both of the Pirates of Silicon Valley.
Ina Fried
3 min read
TORONTO--Like a college with too many liberal arts majors, Microsoft says, its reseller base has too many generalists and not enough with deep knowledge in a particular subject area.

"To a large extent, I would say, our partners have not specialized," Microsoft senior vice president Orlando Ayala said Sunday in an interview.

Microsoft hopes to change that with a revamped partner program that debuted this week at the company's Worldwide Partner Conference in Toronto. In addition to combining previously separate programs for its main software line and its Microsoft Business Solutions products, Microsoft is offering new incentives to partners that specialize in one or more of 11 categories, areas such as security, business intelligence and advanced network infrastructure.

The company plans to spend $1.7 billion on its partner programs this year, up from $1.5 billion last year. Resellers and other partners that get certified in one or more areas can earn points, which can be used for additional support and marketing help from Microsoft.

Ayala, who heads Microsoft's small and midmarket sales effort and the company's partner organization, stressed that the program doesn't just reward partners for getting book smarts.

"That's not enough," Ayala said. "They have to make an impact in the marketplace."

Ottawa-based identity management firm Alacris hopes to benefit by taking part in Microsoft's security specialization, an area it already focuses on. The challenge for the firm is the cost of getting the necessary software testing and client references to earn enough points in the new program, said Bill Thompkins, Alacris' vice president of market and business development.

"I think in the end it will help us," Thompkins said. "I'm hoping."

Ayala said he is convinced that those who do more than resell Microsoft software stand to gain by offering small and midsize businesses ways to solve their most difficult problems.

To highlight the opportunity to those who follow along, Ayala points to his brother, Oscar, who owns a hobby shop. Orlando had been trying to pitch his brother on Microsoft's Small Business Server--a combination of Microsoft's Windows Server 2003 operating system, Exchange e-mail and other software.

"I'm not interested in that stuff," Ayala said his brother told him. "I want you to solve my cash flow problem."

Oscar Ayala's business had a Web site, but to buy things, customers had to use PayPal--not the sort of credit card experience he wanted. Thanks to new tools from Microsoft that help pair partners with different expertise, Oscar was connected with two Microsoft partners, one that specializes in retail and another that sets up credit card processing.

In the end, Oscar Ayala did buy Small Business Server, spending about $4,000 on hardware and Microsoft software, along with another $13,000 in services to the two partners.

More broadly, Ayala points to a recent study that calculated that for every $1 a customer spends on software, there are $7 available to partners that help with services. Even though the market for such services is only projected to grow 3 percent to 5 percent, Ayala said it is growing, and faster for those offering answers to specific customer problems.

"We know it is perhaps our largest opportunity to create jobs," Ayala said.