Program Changes Concern Partners

Microsoft has talked to select partners about proposed changes that would segment partners based on customer size. For example, under the new plan, Microsoft would steer a huge Detroit automaker toward a global enterprise partner, such as Hewlett-Packard's services division or Accenture, for implementation. But such a move could cause huge reverberations in cases where smaller partners are already active in that account.

A Microsoft spokeswoman confirmed that the company has sought feedback from partners on potential changes that will be discussed during Microsoft's Worldwide Partner Conference next month.

While not providing specifics, the spokeswoman said the company is committed to maintaining future and existing customer relationships with partners. No changes to the program have been finalized, she said.

Smaller partners bridled at the specter of global partners "bigfooting" them in accounts. But even some of those partners say Microsoft has telegraphed segmentation plans for more than a year and has reassured them that it will encourage more "partnering of partners." HP Services, in that scenario, would subcontract more of its business in a given large account to smaller colleagues with specialized expertise.

"The message I'm hearing is more 'Dating Game' stuff," said one Midwestern partner who requested anonymity.

Microsoft's channel rapport is already in a tender state. Last month, the company incensed many Microsoft Business Solutions partners with news that the next release of Microsoft CRM,which previously was sold only by MBS partners,would go into broad distribution. (See story.)

That move was seen by many as the first of several expected "disruptive" channel moves by Microsoft.

"Two-thirds of the partner channel could feel remarkably estranged this coming year," said one longtime East Coast partner. This segmentation push seeks to bolster Microsoft in the enterprise after it promised to keep its own consulting services group from competing with partners, he said.

"Microsoft has a bit of IBM Global Services envy, and they think hooking up [with] HP Services and Accenture and maybe Dell Services down the road, will help them compete better in the enterprise," the Midwestern solution provider said.

Still, many partners maintain that the Microsoft field already plays favorites, doling out leads to partners that are more exclusive to the vendor and undercutting those that offer non-Microsoft options. They fear that favoritism will accelerate, this time benefitting large services companies at their expense.

"If they try to segment [smaller] partners out of enterprise accounts, they will have a mutiny," said one Mid-Atlantic VAR who also requested anonymity. Smaller companies such as his have global customers "precisely because we are smaller and agile," he said.

A New York-area partner was pragmatic, saying, "Microsoft knows it has to do right by the customer, and if the customer picks someone other than a global partner, Microsoft will support that."

For more on Microsoft's channels see story.

PAULA ROONEY contributed to this story.