February 22, 2014 Leave a comment
The success potential in the cloud for Microsoft was laid down many years ago, well before cloud was even on the horizon, a unique differentiator that no Amazon or Google can challenge …. Yet.
What I am talking about are customer ‘Relationships’ and the trust that those relationships has fostered, especially in the Corporate and Enterprise markets.
The reality being that Microsoft is the only provider who can deliver to both on premise and the Cloud which is for the foreseeable future Hybrid is the overriding model organisations are using. Whilst a feature shoot out would see Microsoft struggling in some discrete areas versus the likes of Amazon the reality is what Microsoft Cloud offers addresses the majority of organisations needs today without them having to stray into untrusted waters, and the offerings from Microsoft are just going to get better and narrow the gap in time to be sure.
As for the cost argument, that is a no brainer, Microsoft has made the commitment on price matching the competition. You can bank that one.
So back to the hearts and Minds. The Key to this is the Partner Ecosystem and how Microsoft engages this and brings its awesome capability to focus on the task in hand. The Partners represent the contact area through which the majority of Microsoft business is generated. Through its Partners Microsoft has the Corporate and Enterprise customer credibility that key competitors like Amazon and Google are struggling to gain. The competition are realising how slow trust and confidence gets built, Microsoft is decades ahead of them, but Cloud is threatening to be a bit of a leveller if they don’t watch out.
Success in the cloud is as Kevin Turner made very clear is non-negotiable for Microsoft. His famous slide of a tunnel with a bright light at the end sums this up. Whether we are in for a train wreck or a sunny day is still too early to judge, but one factor that will make this more certain is decisive action to reverse the disillusionment Partners are having with their Microsoft relationship as they adapt to new cloud business models and the Microsoft dimension that now exists in the service delivery. The relationship with the channel is an up front and central priority if the current wave of ambivalence is to be stemmed before it develops a momentum that will be hard to subside.
The elephant in the room is that Microsoft is perceived as moving into traditional Partner territory with its own services, and to be blunt, it is more than a perception it’s a reality. Let’s not argue that point. Another that always frustrates me and is more visible than ever with Cloud Computing rampaging across the marketplace, is the illusion of role security in IT (Information Technology). Be that a an IT Business offering or individual IT pro in a customer’s IT department the hard reality is that anyone in IT who thinks their current technology skill set will last him or her a career are delusional. That goes for Microsoft Partners with their service offerings and products AND Microsoft to boot with their attitude to how they define their Partner engagement.
In the medium to long term Cloud Computing will change the face of IT as a work and marketplace. People who don’t like change will be some of the laggards holding back their businesses from capitalising on this new computing paradigm, they should NOT be working in IT. They might as well stand on the beach and try and hold the tide back.
Just take a look at what is already happening and visible for those with their eyes open. Start-ups don’t build out Datacentre’s, they launch in the cloud. Why? They are not encumbered and can do the most cost effective and logical thing with the choices available.
Datacentre capacity and scale today is accessible to anyone and can be deployed and run by 2 men and a credit card in less than a week. OK the dogs still there just under the desk, after all the 2 men can do this now from home, they don’t need to build or maintain datacentres anymore, nor the infrastructure or maintenance for that matter
So why don’t established businesses!! Cloud is encumbered by the conditioning of entrenched IT and a lack of Trust. It is the Trust factor, which is where the relationships are critical and Microsoft has the key to the kingdom.
People buy from people = RELATIONSHIPS = people partnering with people.
Key to any sustained relationship is a positive experience, yup that can have some esoteric dimensions to it but we are talking IT here OK, so back on theme… The magic word in services EXPERIENCE, and specifically quality of experience. It’s not product feature sets, which is the hard cultural shift Microsoft is having to make, yes you have to have the goods but that is not the end game anymore.
Microsoft Partners deliver that personable face of the Microsoft ecosystem and the valued customer experience. The partnering structure Microsoft imposes on its partners though has plummeted in comparison, as I wrote in my last blog ‘Microsoft Partner Network (MPN) in a Modern World’ . The main point being a significantly revamped Partner Program is required to reflect the commercial prerogatives that drives the new Cloud world.
For Microsoft the Holy Grail is to re-engage its Partners in a new way. The symbiotic relationship has never be more important than it is with the shift to a Cloud world. Microsoft needs those relationships to be transitioned to the cloud, and they are not in a position to do that themselves.
In the old world Microsoft you were the factory that sat on your hill in the American North West, with a marketing engine that would fire off great salvoes of promotional air cover under which your partners would get up close and personal with the customers, refining the messaging for local consumption and ring the till. Packaged product would flow from the factory to the Partners and Partners would do and own the magic. The trust and relationships with customers being forged, fostered and cherished for mutual benefit by your Partners, Partners who rise and fall on the quality of the customer experience they offer and the profitability they can nurture from that engagement. The importance of the profitability message cannot be underestimated, it’s not that it never existed between Microsoft and its Partners, it is just that with Cloud Computing the model is changing, Microsoft is now directly impacting that in real time.
Microsoft is now in the field with Partners, expecting adoption as a direct extension of the Partners Service Delivery and by extension their IT teams, as Partners are now beholden on Microsoft as an extension of their support service chain. The established Partnership Trust Microsoft enjoys is getting them in the door and Partners are putting their goodwill and name on the line in blind trust. But Partners are starting to find their newly adopted IT extension(s) are not fully aligned to what impacts their business. Their new IT team dependency (Microsoft) is not delivering as expected or rather as Partners who expect form their own IT teams. Consequently Partners are feeling they are no longer 100% in charge of their own end to end solution delivery and there is the pinch, where control or coordination is missing costs can quickly spiral and profitability evaporate. Quick on the heels of which goes quality of service and customer experience, that hallowed trusted customer relationship, a veritable meltdown like a China Syndrome. In the wings awaits a Book seller and Search engine vendor hungry for custom.
When I am speaking to Partners I call this ‘A New Age of Trust in the Cloud’. For example ISV’s (Independent Software Vendors) experience this when their maintenance and support contracts don’t get renewed. Why? Because a born in the cloud start-up has just mined their customer base with a cloud offering that blows away the incumbent legacy ISV offering. By the time the ISV realises what is going on it will be too late. Service Partners see the same thing happening when the phone stops ringing from established customers with whom they have neglected to develop their Cloud credentials.
In Microsoft’s case its Partner Program MPN (Microsoft Partner Network) is hitting up against this like a ‘Trust Event Horizon’, testing that Partner faith just enough to be dangerous. A question mark over a relationship can be a gnawingly dangerous thing. Trust is a slow won but can also be frighteningly ephemeral.
Microsoft you have it in your power to rewrite the rulebook and engage Partners at new levels of marketing and operational intimacy and in so doing do credit to the trust and confidence of your Partners. Let’s see some of that Blue Ocean thinking, as Cloud is re-writing the IT rulebook it is time the masters of the Partner ecosystem did the same with Partner Channels.
Microsoft and Partners success will be found in the teamwork that is required to deliver end-to-end value + quality, experience rich scenario focused propositions into the market. That is not something Partners can do independently or in semi-detached way. Partners have the experience at the coal face and know how best to engage the customers and Microsoft controls the engines.
Some pointers as to where to start:
- Service integration – Microsoft you are now an extension of your Partners IT department, they need that same visibility and accountability from you. Extend your service help desk to your Partners and allow your Partners to become an extension of your own support teams with access to escalate to product groups. This has to happen to deliver to the market expectation of a single point of support.
Sales integration – Just as with the services, there are now questions that only Microsoft can answer, so when we are in the field and preparing for a client engagement we need the connection and joined up account planning. Yes we like the name change PAM’s (Partner Account Managers) to PSE’s (Partner Sales Executives), now let’s see the action, sharing visibility of managed (and breadth) accounts and working with the internal account teams, akin to an extension of the Partners Sales team. The customer relationship management success will be maximised with a consistent single touch point, the Partner.
This is something Microsoft has been doing internally already, just look at how GFS (Global Foundation Services) integrates and works with the rest of Microsoft to deliver the great suite of Microsoft Online Services. My suggestion is to follow the same principles, an extension of this type of service engagement model, into the Partner base.
Sounds great doesn’t it Partners, but the give back is this will only work with the fully committed and engaged Partners, the ones Microsoft can trust to engage at a level of professionalism to operate within NDA (non-disclosure Agreement) to share this level of operational integration. It will be no good anymore just signing up as a Partner and expecting an open door, it will require a new level of proactive engagement with Microsoft.
Challenging when working on Internet Time which doesn’t wait for anyone.