Incentives, promotions designed to attract partners
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Microsoft kicked off its channel assault against Symantec, Google, Salesforce.com and Cisco Systems last week, but the jury is still out on how the software giant and its partners will fare in the markets led by these vendors.
At its worldwide partner conference in Boston, Microsoft launched programs and incentives to lead existing partners and lure rivals' partners to its security, search and unified communications platforms, and to prepare them for hosted software services such as its CRM Live service, also announced last week.
Microsoft, for instance, launched a new Security Software Advisor Program that rewards partners with an additional 20 percent fee (30 percent though February) on sales of Forefront antivirus and security products. The vendor also talked up its Jumpstart program to help partners make money on search applications and other enterprise information management solutions. It plans a Search competency in 2007.
Microsoft CEO Steve Ballmer and Microsoft COO Kevin Turner, both speakers at the conference, said Microsoft will work hard to win the hearts and minds of partners in these new markets.
Ballmer anticipates partners will benefit from advertising revenue, earn agent fees and commissions for reselling Windows and Office Live services, and build services practices hosting customer infrastructures and customizing software services.
The introduction of a "partner-based customization model out of the gate for CRM Live," Ballmer said, demonstrates that Microsoft will integrate partners into the new business model.
Still, the company—and its partners—acknowledged that the channel model for software as a service (SaaS) is not yet baked. That's one reason the company is forming a Live partner advisory council to explore how to go to market together. Web services giant Google launched its own partner program recently as well.
"We're not going to let Google win in the enterprise space. That's our house, our space," said Turner, who got a resounding cheer from partners for his tough talk. "Then we go after Novell, Linux, Red Hat and others. We're going after IBM and Google. We know you have choices to make, but this is a company that if we don't get it right the first time, we'll keep coming back."
One solution provider briefed on the new security program was optimistic about Microsoft's prospects against security leader Symantec, as well as Google.
"The new efforts will take some time to develop since customers are used to thinking a certain way about search and about security," said Neil Rosenberg, CEO of Quality Technology Solutions, Morris Plains, N.J. "When Microsoft enters a market, it refines and enhances its products and builds market share. The integration from their solutions is compelling. That's how they beat Novell, Lotus, WordPerfect, and it will work here."
Still, other partners worry that customers won't pay Microsoft for products that fix holes and vulnerabilities in Windows and Office. And taking on the company whose name has become synonymous with Internet search will not be easy, even if Google only recently launched a partner program, partners say.
One partner, who asked not to be named, said he was skeptical the channel will make much money off the Live platform.
"If I'm going to compete with anyone, it's not going to be Microsoft," said the solution provider.