Microsoft Enterprise Group Romances SIs

Microsoft Consulting Services

While Microsoft hunts for a new chief for its enterprise group, the company will increase its number of partner account managers (PAMs) by 15 percent to 20 percent to serve the needs of ISVs and systems integration partners, said Ralph Young, vice president of Microsoft's Enterprise Sales Strategy, at Fusion 2002 here. Microsoft currently has 400 PAMs dedicated to the enterprise unit, he said.

Young also said the company intends to train roughly 80,000 enterprise partners on Microsoft's Integrated Selling Solution (ISS) in fiscal 2003.

"ISS is what you need to engage with, and what matters to the Microsoft sales force," Young said on Monday, just days before the launch of Microsoft's Global Briefing, its annual sales meeting, in New Orleans.

While Microsoft also plans a major sales force expansion in fiscal year 2003, as well as a continued emphasis on its ISS, the company is promising partners it will do what it didn't do last year: push a stronger partner engagement model to its growing sales force.

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ISS, formerly code-named "Sable," was launched last year to replace Microsoft's simple product sales model.

"The health of Microsoft's enterprise business is best judged by the opportunity for partners," said Young, noting that partners won't be shut out of enterprise deals, a promise that is backed by a new company charter that emphasizes customer and partner satisfaction. "This is what we're training the field on. It's a requirement in the enterprise segment that we partner for service deployment. That's a huge business opportunity we need to enable."

With Microsoft's enterprise server sales growing 30 percent annually, representing some $6 billion of the company's annual revenue, the enterprise segment offers service and application development opportunities for partners in the $600 billion range in fiscal 2004, Young claimed.

While Microsoft is endorsing a more predictable, consistent sales process that makes it easier for partners to engage with the company, local district offices will continue to be responsible for assuring partner selection on projects, said Young.

While Young acknowledged that the "behavior" of Microsoft's services organization has not been in step with the company charter, he said deploying and supporting solutions and services with partners will be a top priority for Microsoft in 2003.

Microsoft's enhanced vertical approach will impact partners as well, he said. The company recently announced plans to add two new "hard," or fixed, verticals to its lineup, which includes health care and retail.

The company is also piloting a number of "soft" verticals in specific geographics regions. For instance, Microsoft has established a vertical focus for oil and gas in Texas, an automotive focus in Michigan and a professional services focus on the East Coast, said Young.

"This is an incubation approach to getting more vertical alignment with customers," Young added during his keynote. "It's the next logical step for Microsoft."

Microsoft's enhanced vertical focus is the brain child of Gerri Elliott, former IBM Global Services executive and now corporate vice president of Microsoft's Industry Solutions Group, sources said. Elliott and Microsoft worldwide vice president of services Mike Sinneck, another IGS veteran, are working to professionalize services, said sources familiar with the plans.

While this strategy has been causing concern among some systems integrators, Microsoft's enterprise partner 'Go To Market' framework, hiring new PAMs and the allotment of $15 million for enterprise partner training in fiscal 2003 are good signs, Young said. "We're tightening partner integration in the sales process," he said, noting that 80,000 of the 300,000 partners that will be trained in fiscal 2003 will focus on enterprise sales.

As Microsoft prepares to launch its enhanced IIS focus to sales troops in New Orleans, the company still hasn't publicly named a successor for Charles Stevens, who is departing as chief of the Enterprise and Partner group.

At a meeting with CRN on Sunday, Microsoft's top sales executive, Orlando Ayala, would not comment on the candidates or whether the unit will be significantly reorganized.

Sources indicated Microsoft was mulling those changes.