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Pay To Play?

Does Microsoft want partners to pay to play as it rolls out a new set of services offerings? That&'s the word from partners who say two of Microsoft&'s top consulting services executives earlier this month, tried to sell partners on the advantages of taking on Microsoft Consulting Services (MCS) personnel for their own businesses and paying for that privilege as the software giant rolls out new services SKUs.

That&'s the word from partners who say two of Microsoft&'s top consulting services executives earlier this month, tried to sell partners on the advantages of taking on Microsoft Consulting Services (MCS) personnel for their own businesses and paying for that privilege as the software giant rolls out new services SKUs.

“They want us to pay MCS salaries,” said one attendee of a session at Microsoft&'s annual Worldwide Partner Conference in Minneapolis. The session, called Microsoft Services and IT Overview and Partner Strategy, was led by Rick Devenuti, senior vice president of services and IT for Microsoft, and Peter Rakoczy, worldwide general manager for MCS.

This solution provider and another attendee said Microsoft painted a “pay for play” scenario for upcoming services SKUs that would give precedence to the partners who took on MCS people and paid the freight.

Rakoczy denied any quid pro quo.

“There is no linkage between [hiring a] Partner Strategy Consultant and access to services IP,” he said, referring to the intellectual property and methodologies Microsoft is bundling into “SKUs” to be made available late this year to customers and sometime later to partners.

The first offering will likely be the “ExRAP” Exchange Server 2003 migration SKUthat Devenuti discussed with CRN last month.

Rakoczy acknowledged that the perception of “pay for play” did come up at the event but was quickly discounted.

“Someone asked if they needed to buy a [Partner Strategy Consultant] in order to have a good relationship with the account teams and get more services opportunities. And my response, which Rick [Devenuti] reinforced, was ‘No, we don&'t want you to pay for the relationship,” he said.

Microsoft partners said the Redmond, Wash.-based software giant has pushed Partner Strategy Consultants to channel players for some time but that the new services push may be ratcheting up that activity anew. Clearly, the attraction for Microsoft would come in defraying its costs and hopefully driving deployments and migrations. But for partners struggling with profitability, the value is thus far unproven.

“A senior MCS resource costs about $300 an hour [and can hit] $500,000 for a full year. I can get three or four less well-trained but useful folks for that,” one integrator executive said. His company already pays for Partner Account Management (PAM) and Technical Assistance Managers (TAMs) support, although most of those costs are recouped if the integrator hits its Microsoft targets.

Some partners with past experience with Partner Strategy Consultants, were not impressed.

Robert Stalich, CEO of Internosis, a Greenbelt, Md.-based Microsoft solution provider, said he is not a fan. “For all that money you get a good, not great, technologist. You don&'t get a strategic thinker, and those prices are close to what Accenture or even McKinsey get,” he noted.

Partners say Microsoft, to its credit, is trying to move them to a potentially more lucrative services model, but the company also is recruiting more and more partners, which inevitably leads to discounting and other contention in the field.

Microsoft clearly needs partners to foster and implement upgrades to its latest-and-greatest wares and hopefully conversions from competitive offerings from IBM, Oracle, Novell and others.

The integrator executive said the use of Partner Strategy Consultants, in theory, could get partners up to speed on new technologies faster than they are already doing. Slow uptake of new technology releases is a concern to Microsoft, he said.

“They want us to get trained, [to] go to boot camps and other events, which aren&'t as well attended as they would like. They don&'t seem to get the fact that we don&'t make that much money from their stuff,” he noted.

A West Coast solution provider said he has been pitched by MCS repeatedly to hire Partner Strategy Consultants but has resisted.

“The only benefit we see is that partners who win Microsoft&'s awards tend to be those who hired their consultants. But those partners don&'t necessarily win any business,” he said.

MCS, while a tiny fraction of the size of IBM Global Services, remains a sore point for some partners who say they face pressure not only to hire MCS personnel, but to bring the group into accounts where it is not already present, often at the expense of their own business.

“I wish they&'d just be honest and tell us, ‘We&'re competing with you,&' ” said one East Coast partner.

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