Winds Of Change Blowing In Microsoft's Partner Channel

Change is sweeping through the Microsoft partner channel like a cold front, and solution providers are facing tough choices about where they'll fit into the new Microsoft Partner Network (MPN) structure.

As part of the MPN changes Microsoft introduced Nov. 1, the blanket Gold and Certified partner designations are gone. Instead, partners will now choose to attain Gold or Silver status in any of 29 distinct MPN technology competencies. In addition to more stringent testing, partners will also have to hire or contract with a certain number of Microsoft Certified Professionals (MCPs) to achieve Gold and Silver MPN status.

All of these changes are forcing partners to think long and hard about where they want to place their MPN investments going forward. "The big changes in MPN are designed to make partners more accountable for the benefits they receive," said Rick Oppedisano, executive director of partner and channel Sales at Azaleos, a Seattle-based Microsoft partner. "If someone claims to be an Exchange expert, they have to prove they are instead of just having to take a test."

Many Microsoft partners typically re-enroll in the program in December and January, and so VARs are now in the process of making decisions that will affect their businesses for the next several years.

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Omnivue, an Alpharetta, Ga.-based solution provider, was one of the first partners to make the transition to MPN. A former Gold Dynamics partner with certifications in hosting and ERP apps, Omnivue has achieved Gold certification in ERP and Silver certification in CRM under MPN, and has a long-term plan to attain Gold CRM status, according to Jeff Pyden, president and CEO of Omnivue.

As for the time involved, Omnivue's vice president of operations spent about 40 hours on the MPN transition, while 15 consultants spent about a half-day on MPN certification testing. Gold ERP certification also requires testing in Sure Step methodology and project management, as well as pre-sales tests. "It was a lot of work," Pyden said.

InterKnowlogy, a Microsoft Gold partner in Carlsbad, Calif., is in the midst of its transition to MPN. Interknowlogy is working toward Gold certifications in the new Software Development and Web Development MPN competencies, as well as six additional Silver competencies, while also maintaining its Small Business Specialist Community status. All of this has required a great deal of planning and forethought.

"We've spent a ton of time over the past year working with Microsoft team in the transition to MPN. It's a significant process," said Emilie Hersh, CEO at InterKnowlogy.

Next: How Microsoft Is Helping Partners Make The Transition

Both Pyden and Hersh give Microsoft credit for providing dedicated MPN experts to assist in their transition. Microsoft is also helping out partners with vouchers for exams that are required to attain Gold and Silver status. Still, partners have expended a lot of effort in adjusting their businesses to meet the new terms of MPN, and they're naturally going to be expecting a return on their investment.

Pyden believes it's going to take a while for the market to recognize the value behind MPN, and that Microsoft is going to have to step things up on its end to spread awareness. "I don't think the majority of our clients understand that this change has happened," he said. "The bet is, if we are competing against someone who does not have it, the certification will give us a leg up with clients."

Peters & Associates, an Oakbrook Terrace, Ill.-based solution provider, is gearing up to re-enroll in MPN in late January, and plans to change its external branding to align with MPN. Ric Opal, vice president of Peters & Associates, is confident that Microsoft will promote the meaning of the change in a way that illustrates the value of the MPN brand.

"The change [to MPN] is difficult, and it will be hard for many partners. But at end of day, customers should see the benefits," said Opal. "Microsoft will being doing branding around MPN and what it means for customers, and I want to ride that wave."

MPN promises to help partners differentiate themselves in a way they haven't been able to do in the past, and it's a direct response to partners' longstanding complaints about the value of Gold being diluted. However, the road to MPN will be steep for many partners, both from a time and cost perspective.

For MPN Gold competencies, partners must employ or contract with four unique MCPs that can't be assigned to any other Gold competency. For Silver, 2 MCPs are required, but these can be used for multiple competencies. If partners can't afford to hire enough MSPs, they're going to have to make difficult choices with potentially long-term ramifications.

"You have to be more focused now as to where you place your bets," said Opal. "It's a challenge for smaller partners that have had multiple competencies in the past and now may not be able to have as many."

Many smaller VARs are also realizing that they’re going to have to drop some competencies when they move to MPN. "If I have an employee who's certified in business intelligence and security, now I have to decide which Gold competency I want them certified to. It’s a tremendous waste of talent," said one East Coast solution provider who has partnered with Microsoft since the late 1980s.

Next: How Smaller VARs Are Reacting

Unsurprisingly, VARs that used to have Gold status, but are only going to be able to attain Silver competencies under MPN because of the amount of investment required, aren't happy with the outward appearance that they're being downgraded.

Daniel Duffy, CEO of Valley Network Solutions, a solution provider in Fresno, Calif., says Microsoft has done a good job of communicating the changes to partners and giving the channel plenty of time to figure out where they fit in MPN, but the changes are still going to negatively impact some VARs. "The end result is that we're going to lose the ability to distinguish ourselves accordingly," Duffy said.

These concerns aren't new to Microsoft's ears: The software giant has been talking about MPN changes since the 2009 Worldwide Partner Conference, and it's aware that illuminating the advantages of MPN is going to take more time.

"We understand that some partners haven’t yet realized the full benefits of the Microsoft Partner Network and we continue to work with them so they understand how the new membership opportunities will benefit them and their customers," said Jon Roskill, vice president of worldwide channels, in an e-mailed statement.

For partners that have only enough technical staff to achieve one MPN Gold competency, Microsoft recommends that they pick one that best represents their primary business focus and augment that with Silver competencies, for which MCPs can span multiple areas.

Clearly, winds of change are blowing in the Microsoft channel, and MPN isn't the only factor on the radar for partners.

Microsoft is on a borderline obsessive crusade to position itself as the IT industry's preeminent cloud computing vendor, and that's forcing business model changes on Microsoft solution providers. Roskill is also still settling into his position as Microsoft channel chief, and some partners may be wondering if he'll maintain the same unwavering devotion to channel partners as former channel chief Allison Watson displayed during her eight years at the helm.

It wouldn't be an exaggeration to call this the most tumultuous time in the Microsoft partner channel history, nor would it be hyperbole to call it the most exciting when it comes to the opportunities involved. One thing's for sure: the Gold partner brand is gone, Microsoft has raised the bar in a major way and powerful forces of change will continue shaping the software giant's channel program.

Microsoft is once again turning the battleship in a new direction, and it's time for partners to figure out whether to jump ship or start swabbing the decks and preparing for the journey to the new world.