Microsoft's Outgoing U.S. Channel Chief: New Role Isn't Demotion

In an interview Monday, Day, who has served as vice president of Microsoft's US Partner Group for five years, said the change – announced late Friday – will focus her efforts more narrowly on the Small and Midmarket and Partner Group and customers in the Western region.

"I've been very interested.. itching … to get out with customers for the last year," Day said. "I've been focused on the partner channel and I wanted to take that knowledge and get out with customers more and work with partners and customers to drive adoption."

A fierce advocate for the channel, shesaid the executive change does not signify any plans to change resources or investments in the channel.

Day said her reassignment has "been in the works for a year" but the reorganization was initiated and finalized by Michael Park, a former Siebel and SAP sales and marketing executive who was named Microsoft's corporate vice president of U.S. Small and Midmarket Solutions and Partners last October.

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Microsoft's SMS&P organization accounts for $4 billion in revenues annually.

Although Day will have direct responsibility for only about one third of the number of partners she oversees today, serving as head of the Western region – and 100 Microsoft employees -- gives her Profit and Loss (P&L) responsibility for "hundreds of thousands if not millions" of customers and the opportunity to drive revenues more directly through partners – rather than create programs to support partners, she said.

The Western region generates roughly $1 billion in SMS&P revenues for Microsoft and supports between 1.7 and 2 million customers, she said

"It's a great move overall for the partners," said Day, dismissing any notion that Microsoft is sidelining its US partner chief or its partner investments in fiscal year 2007. "This is not a negative at all, it's only positive … it's a lateral move for me, agreed, but that's part of the career planning model at Microsoft."

Robert Deshaies, a 12 year Microsoft veteran who is currently regional vice president of east region SMS&P organization, will take the reins of the US Partner Group and will oversee programs for both enterprise and SMB partners.

The U.S. Partner chief and executives in charge of the three U.S. regions -- including Day -- will all report to SMS&P Chief Park.

Day said the final budgets for Microsoft's global partner organization and U.S. SMS&P are not yet finalized and would not say whether or not there will be increases or cuts in partner investments.

However, she insisted that the reorganization is designed to create "breakthroughs" and "innovations" in driving partner-led sales in the SMS&P organization as the company prepares its next major round of product launches including Windows Vista and Office 2007. Notably, Day's channel expertise will be applied in the field and Deshaies' field experience can be best utilized by the company channel organization. Partners complain that corporate and field often work in a vacuum and need to coordinate and cooperate more closely for optimum results.

"We're doing it because [Deshaies] can bring his field knowledge to headquarters and I bring headquarters experience to the field, " Day said. "Our collaboration becomes far richer than it is today."

Still, several partners contacted by CRN were shocked and saddened by Day's move out of the partner organization, and questioned the sudden announcement late last week. They seemed open to the possibility that it may benefit the channel.

"It's quite an interesting development," said Ted Dinsmore, president of Conchango. "It could signal change from enterprise to the SMS&P … and around making the U.S. a subsidiary instead of the center of the universe within the culture. It is interesting that Robert comes from SMS&P and Margo is going to SMS&P."

"It's sad. I always enjoyed Margo," said Todd Swank, vice president of marketing for Nor-tech, of Burnsville, Minn. "She made me feel like she really understood the challenges of being in the channel."

Day said the changes are designed to drive revenues for Microsoft and its partners in the SMS&P market – and should not be taken as an ominous sign for partners.

"Our commitment to partner from budget and people and sources is unwavering," Day said. "No one should question our commitment in the marketplace. We haven’t handed down out budgets yet but no one should question our commitment to the channel. "

One partner familiar with the channel reorganization said it's not bad news for Day.

"They wanted Margo to get more field experience. She's being groomed for bigger and better things," said one partner who declined to be named.