Microsoft Gets It Right With Small-Business Partner Initiative
"In order to have the lowest prices, you must have the lowest costs," he would say, and then go on to explain how he paid cash for his cars and subsequently had no financing costs, so he could sell cars for less.
Well, in our industry, to sell to small businesses, you have to have products that fit their needs and that carry a low cost of sales. In addition, you need focus. This sounds simple, but it takes real work to accomplish both, and most vendors can't pull it off.
Microsoft is the exception. Not only has the company developed a solid group of products that are truly built for small businesses, but it is focused on building a channel that will lead with Microsoft products.
Allison Watson, vice president of Microsoft's Worldwide Partner Sales and Marketing Group, and her North American counterpart, Margo Day, are breaking ground on new programs designed to gain the company more attention from solution providers that specialize in the small-business market.
Watson, Day and Microsoft CEO Steve Ballmer understand what a lot of other vendor executives seem to miss: The solution provider channel is the best leverage point available for small-business sales.
CMP Channel Group data illustrates this point well. Our research shows there are approximately 36,500 solution providers in the United States that are selling to small businesses with 20 to 99 employees. Those solution providers tell us they each have an average of 134 customers in that segment. Multiply that out, and this tells you that, combined, they call on 4.9 million small-business customers. U.S. government data estimates there are 500,000 companies in the country with 20 to 99 employees, so a little division says the coverage ratio of solution providers to prospects in this area is 10 to 1.
That's why building a direct-sales effort to address small businesses would be incredibly expensive, if not downright impossible.
So Microsoft, which has spent many years fine-tuning Small Business Server and its Office Small Business offerings, is also fine-tuning channel programs for this market. Not one to stand still, the developer is bringing forth small-business offerings in the point-of-sale and accounting areas as well.
The reason I believe Microsoft will continue to have success with small businesses is because it does what few others do: It thinks about its go-to-market channel strategy in tandem with its product development.
Microsoft is not only building products for small business from the ground up, it is thinking through how to build a channel capable of selling these products successfully and profitably. In a nutshell, it is showing thought leadership in small business while other vendors try to talk a good game.
Microsoft's Small Business Specialist designation comes with an investment on the part of both Microsoft and the solution provider ("Partners Are Microsoft's Ace In The Hole," CRN, July 11). In addition, Microsoft is simplifying licensing with an eye toward making it easier for customers to get software through value-added solution providers.
This effort will not be perfect out of the gate and will likely need refinements along the way.
But when you roll it all up and consider everything that Microsoft is doing, it's clear the company is showing thought leadership in an important customer segment and is actually investing in a fundamental belief that the best way to service small businesses is through solution providers that are themselves small businesses.
That's not an easy thing to accomplish for a gargantuan company like Microsoft. Nonetheless, it is doing a better job at this task than anyone else.
Make something happen. I can be reached at (781) 839-1202 or via e-mail at [email protected].