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One top executive at a Microsoft enterprise partner applauded the decision to restructure, however, saying it will drive a more cohesive and unified organization. The executive, who attended the partner conference but did not want to be named, said the changes are being driven by Microsoft's view that it needs to step up its game against Apple, Amazon and Google.
The executive's biggest issue coming out of the conference was the inability to sell Surface. Making matters worse, he said, is Microsoft's insistence that solution providers need to have Surface shipped directly to customers from one of the 10 LARs authorized to sell the product. That puts solution providers in the position of buying products from competitors.
"They are screwing us," he said. "You think my sales reps are going to go to a competitor and order it? The strategy doesn't make sense."
The executive said Microsoft's distribution strategy for Surface is forcing his sales reps to sell tablets from vendors such as Samsung, Apple, Hewlett-Packard and Dell, which are partnering with his company. "In six months, I am not going to want to sell it [Surface] because my sales reps will have moved on," he said.
Partners say the Surface distribution strategy is just one more sign that Microsoft is not listening to its partners. Denali's Daher, for his part, said that came through loud and clear in Microsoft's decision to announce the restructuring on the last day of the partner conference.
"They came into the conference knowing about the restructuring and waited until the end to make the announcement," he said. "That means they had their mind made up and the conference was just going through the motions more than anything else. Why have a conference and have people spend good money to attend when you don't value their input? When I invest my time and my people's time to go to a conference, I expect to get a return on that investment. It is clear to me I made the right decision by not going."
Bob Nitrio, CEO of Ranvest Associates, an Orangevale, Calif.-based small-business Microsoft partner, said he was outraged by Microsoft COO Turner's suggestion that partners bring customers to Microsoft retail stores as an extension of their offices. "I don't think so," he said. "I am not going to bring my clients to your stores so you can sell them something."
After reading the Ballmer restructuring memo, Nitrio said he was incensed. "I went ballistic," he said. "Ballmer uses the word 'partners' three times and 'partnership' once. That shows how disconnected Microsoft is from partners."
Nitrio sees the Microsoft restructuring as yet another sign that Microsoft is moving away from engaging with the vast majority of channel partners. "The Walmart retail strategy is now part of Microsoft's vision," he said. "It makes me feel as if I am insignificant in the Microsoft ecosystem. We have been the unpaid sales force for Microsoft for years and this is the thank you we get: the door hitting us on the way out."