VARs Ponder Microsoft Management Shakeup

The news hit the wires late in the day May 12, but a more formal announcement about Day’s move into a new role at the software giant was made at the partner gathering last week by Michael Park, corporate vice president of Microsoft’s U.S. Small and Midmarket Solutions and Partners Group.

Day, whose five-year tenure as U.S vice president of the U.S. Partner Group ends July 1, received a standing ovation from system builders and VARs, as well as accolades from Park, her boss of eight months, and her successor, Robert Deshaies, who joined her on stage, say sources who attended the San Diego event.

Still, one partner said he does not understand the rationale for the U.S. partner group reorganization and said Microsoft shouldn’t try to fix something that’s not broken.

“It struck me as unique. When [Park] announced it, Margo was with him on stage. From my point of view, here he was, this new hotshot from SAP, publicly demoting this person and at the same time celebrating her work and describing what a great job she’s done,” said one source who attended the summit. “It’s like bringing in a relief pitcher or going with a new quarterback just to see if any changes result.”

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Park, a former SAP executive who joined Microsoft last October, then described Day’s new marching orders—to serve as regional vice president of the West region for Microsoft’s SMS&P Group.

To fill Day’s position, Park promoted Deshaies, former solution provider and past Great Plains executive, who currently is serving as regional vice president of the East region for the SMS&P. Deshaies will become the new chief of the company’s U.S. Partner Group effective July 1.

Officially, Redmond, Wash.-based Microsoft said the change was made to “cross-pollinate” expertise across the corporate organization and in the field.

“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,” Day said.

The move was amplified by other executive reshuffling going on in the partner groups as Microsoft prepares for a new fiscal year beginning July 1 and its worldwide partner conference in mid-July.

Recently, for example, Microsoft announced that Matt Pease, current regional vice president for the West region, will become region vice president of services, a new position at Microsoft. And the latest change out in Microsoft’s SMS&P unit is that Doug Leland—a 14-year company veteran who was named general manager of Microsoft’s worldwide small business just last October—is taking a leave of absence starting next month. Leland’s move was announced internally in a company e-mail but was not disclosed publicly.

Despite his pedigree from SAP and Siebel, which rely heavily on direct sales, Park said he is a channel advocate.

“The channel is how we go to market here,” he said. “There is no direct sales view in the SMS&P business. So, my job is to align the channels so they can compete against the SAPs and the IBMs of the world as they come downmarket into our space.”

Day, a popular U.S. channel chief and fierce advocate for the channel, said the shift does not signal that Microsoft is reducing investments in the channel. She said her new job will allow her to focus exclusively on the SMB market and drive more customer revenue through partners—not hurt them.

Although Day will have direct responsibility for only about one-third of the number of partners she oversees today as U.S. channel chief, serving as head of the West region as well as managing 100 Microsoft employees will give her Profit and Loss (P&L) responsibility for roughly $1 billion in SMS&P revenue for Microsoft and between 1.7 and 2 million customers, she said. The overall SMS&P unit brings in about $4 billion annually.

Another partner at the event said Day is being prepped for bigger and better things at Microsoft. “Park said he wanted to shake up the team and put new blood in new areas. At least he took full credit for it,” the partner said.

One analyst speculated that Day is being prepared for a U.S. sales post.

Other partners said they will reserve judgment.

“It’s a little shocking,” said Martin Tarr, CEO of Tiburon Technologies, an Independence, Ohio-based Microsoft partner. “It looks like a giant step sideways for Margo, who has been the face of Microsoft to the channel for five years.”

BARBARA DARROW contributed to this story.