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Microsoft shakes up partner program

In a drive to reward expertise, not just volume, the software maker is revamping the way it shares the wealth among its smaller business allies.

Microsoft is revamping its far-reaching partner program in a drive to boost sales to small and midsized businesses.

The company plans to introduce the Next Generation Partner Program this week at its worldwide partner conference in New Orleans. Under the new scheme, Microsoft will change the way it divides up special perks among nearly 800,000 Microsoft resellers, and software and consulting allies, said Allison Watson, a Microsoft vice president.

One purpose of the new program is to improve Microsoft's relations with companies that sell software and services to small businesses. These partners are often on the small side themselves, so by taking more than sales volumes into account, Microsoft hopes to level the playing field for them, Watson said.

The software maker spends about $1.5 billion each year on partnership efforts, Watson said. Traditionally, those allies pushing the largest amount of its products out the door and those with the highest level of Microsoft training are entitled to a bigger chunk of that budget. The money goes to additional training, technical support, sales leads and marketing programs.

Now, Microsoft will take into account a number of other factors in rewarding its partners. These factors include their expertise in certain specialized subjects, such as computer security and business intelligence systems. The new partner program will also weigh customer satisfaction and the influence a consulting or software partner has had on a Microsoft sale, even if the partner is not a direct reseller, Watson said.

The new program takes effect in January, but it will take a year or so for Microsoft to get it fully up and running, she said. About 36,000 Microsoft-certified partners, which pay $1,500 a year or more for a higher level of cooperation with the software maker, will have until January 2005 to comply with the new program.

Microsoft plans to update the partner-search feature on its Web site--called the "Resource Directory"--as part of the initiative. Prospective customers will be able to search for the company's partners based not only on location--as now--but also on their areas of expertise, Watson said.

Separately, Microsoft said it is also releasing a new bundle of Windows Server and Exchange e-mail software this week . Microsoft Small Business Server 2003 is designed to appeal to small companies, with a price tag that's less than half what Microsoft charges for its standard package.

Microsoft signaled a greater focus on partners in March when it reassigned Orlando Ayala, its former global sales chief, to lead the Redmond, Wash.-based company's efforts to expand its partner network and sales to businesses with fewer than 1,000 employees. Watson, who reports to Ayala, said the Next Generation program is one of Ayala's changes.