Partners: New Microsoft CEO Nadella Must Quell Channel Angst


Solution providers Tuesday said new Microsoft CEO Satya Nadella's biggest challenge is a channel that is disengaged from the company's cloud computing strategy.

Nadella, a 22-year Microsoft veteran, previously was executive vice president of the company's cloud and enterprise engineering group. He has been widely credited with leading the technical shift across the company's products and services, including its cloud computing initiatives. 

"Nadella faces challenges with the product strategy and development, but his biggest challenge with regard to the major transition to the cloud should be focused on how to leverage the channel," said the CEO of one of the top Solution Provider 500 companies in the country, who did not want to be identified.

"Microsoft's view of a channel partnership is a one-way street," said the CEO.

[Related: Report: Microsoft Picks Nadella As CEO, May Replace Gates As Chairman]

Microsoft has designed a channel with a heavy focus on a few Large Account Resellers who are increasingly competing with enterprise partners driving huge cloud computing engagements, the CEO said.

A number of Microsoft partners also say the channel issues around the cloud are heating up as Google and Amazon Web Services are stepping up their own partnering efforts.

"My message to Nadella is try to understand how Microsoft can differentiate [itself] and leverage the channel," said the SP500 CEO. "Google and Amazon right now don't have the advantage that Microsoft has with the channel. I would tell him to make sure that Microsoft builds their go-to-market [strategy] around protecting the building out of the channel. If I were him, I would much rather have the channel working for them rather than against them. They don't want us working against them. I don't think they fully appreciate the potential impact the channel can have en masse."

The latest channel uproar among partners has come from a move by Microsoft to slash the fees partners get from the Microsoft Online Services Advisor Incentives program.

Those cuts have left many partners furious about the likelihood of making less money selling Office 365, Exchange Online and other cloud services.

"Microsoft is [screwing] its partners," said the CEO of one Microsoft cloud services partner, who did not want to be identified, upon learning of the changes. "It's total [crap]. I am not happy about this."

Microsoft also said Tuesday that Bill Gates, previously chairman, will assume a new role on the board as founder and technology adviser and will devote more time to shaping technology and product direction and to supporting Nadella, who will become a member of the board.

John Thompson, lead independent director, will assume the role of chairman and remain an independent director on the board.

NEXT: Nadella Will Have To Convince A Skeptical Channel


See the latest cloud technologies, learn best practices, and interact with your peers at the channel’s first all-inclusive cloud event: NexGen Cloud Conference & Expo, December 4-5, 2014 at the San Diego Convention Center. Register now at  www.NexGenCloudCon.com