Microsoft Taps Top VARs

The software giant is piloting a new TopVar program that places about 2,400 of its 60,000 resellers at the top of the stack, a privilege that gives the named resellers in the SMB market new telesales resources and training on .Net opportunities.

The TopVar program, which went into pilot mode six months ago, currently involves about 2,400 resellers in the United States that crank out at least $50,000 each annually in Microsoft software sales, said Bob Clough, vice president of broad channel sales and marketing at Microsoft.

The list includes solution providers such as Computer Network, Coast Technologies, Konica Computer Solutions, Journey Education Marketing, Fluent Systems, Monterey Information Technologies, A and A Technology, Amos Data Systems, Open Systems Of Cleveland, Pomeroy Computer Resources and S.B. Stone and Co.

In mid-March, Microsoft plans to host a TopVar 2000 Summit in Scottsdale, Ariz., for the executive management of top distributors, direct-market resellers, systems builders and resellers that focus on the SMB market, Microsoft executives confirmed.

Only a handful of the 2,400 TopVars are invited to the summit, sources said.

Microsoft executives said the TopVar program is not an effort to name partners or narrow down its sizable roster of 60,000 value-added resellers nationwide to a short list, but to increase its direct "touch" to the SMB channel. The company simply provides an additional telesales resource for the top performers in the SMB space, executives said.

"It's an incremental new resource that is going to have telesales engagements with the upper size of our VAR base," Clough said, noting that Microsoft has invested $4 million so far in the pilot program. "This telesales resource is for the upper echelons of the VAR base, but they're all important to us. The two-tiered distribution model has always been and will continue to be there, but the level of direct touch with VARs has not been there. "

TopVar also involves top distributor Ingram Micro as well as direct market resellers such as CDW and Insight. It is not intended for large account resellers that do major volume licensing deals, but rather for all resellers and systems integrators that serve the midmarket.

One TopVar said the program is not designed to narrow down Microsoft's 60,000 base of resellers and channel partner base but to stimulate more growth in the SMB market.

"This gives [partners incentives to try and make the [ranks of the top 2000 VARs," said Rich Figer, vice president of sales at S.B. Stone, a systems integrator in Cleveland, Ohio. "This is the first program I know of geared for the SMB channel that will help grow smaller VARs and help them with Microsoft business by giving them the personal attention that Gold VARs are used to.

"This is the first time we as a VAR have had a representative at Microsoft that we can count on, and they could not possibly give attention to 60,000 VARs with the same effectiveness," Figer said. "I give my rep a call, and I get answers immediately. This is the type of partnership that will help us grow our business."

While a handful of SMB resellers said they resent the fact that they did not make the list of Top VARs, many view the program as a way to boost SMB sales and better support Microsoft's SMB partners. Thus far, most are not concerned that Microsoft is narrowing the list or trying to streamline the number of its channel partners. "

"I can't believe Microsoft has any interest in cutting loose the 60,000 solution providers that don't make the Top 2000 list. Clearly, those 60,000 solution providers are selling a lot of Microsoft products en masse, and it's unrealistic to think that the 2,000 companies at the top of the pyramid could pick up all of that business themselves," said Dwight Davis, a Microsoft analyst at Summit Strategies. "I really see this as just one more instance of Microsoft trying to offer some value-added programs to a certain tier of its channel community. This TopVar program seems to me just an attempt to filter down some of the programs to the second-tier players, which collectively account for a huge percentage of Microsoft's channel sales."

"Clearly, they are simply trying to reach an underserved market," said Oli Thordarson, president of Alvaka Networks, Huntington Beach, Calif. "They know these channel players control this space. If this succeeds, depending upon the [return on investment, I could see them expanding it to the other 60,000 VARs."

Michael Cocanower, president of ITSynergy, Phoenix, said the TopVar program will address an oft-overlooked segment of the channel. "One of the things that has been frustrating over the past year or so was that Microsoft had no defined strategy in the district sales teams to address the small-business segment of the market," Cocanower said. "If a reseller wanted to work in organizations with less than 50 PCs, they were left to their own devices, as there was no local contact, and support from Redmond can be hard to find if you don't know the right people. The problem, however, is that there are several VARs out there who are selling a lot of product to the SMB space, and these VARs weren't being acknowledged or supported by Microsoft."

Microsoft's Clough insisted that the company is also planning to put additional resources into the broader channel to stimulate revenue growth, technical readiness for .Net and "programmatic" awareness. "We have a lot more on tap," Clough said. "This next round of incremental investments we have on tap will fill out the picture."