Microsoft Solution Providers Want Action Not Words

Partners, who had previously criticized MCS for going into SMB accounts, said they were reassured by the new rules of engagement, called the Services Partner Framework.

"It's encouraging to hear them say there will be rules and they won't compete with partners in medium-sized accounts," said Randy Schilling, president of Quilogy, a St. Charles, Mo.-based Microsoft partner.

The list of the top 1,000 accounts MCS will target was due to be published for the first time last Friday. The company plans to publish an updated list every six months.

Solution providers were also pleased Microsoft established an escalation process as part of the rules to handle conflicts. "An extremely positive step, however, is the escalation process that [Microsoft has laid out with a path all the way up to the [vice president level for issue escalation," said Michael Cocanower, president of ITSynergy, a Phoenix-based solution provider that does no business with Microsoft's top 1,000 named accounts.

However, a major concern to channel partners and observers is a loophole in the rules of engagement: Microsoft admits there will be exceptions to the named-accounts rule when the company deems a customer an early .Net adopter.

While Microsoft promises to review the list of its named accounts with partners every six months, there will be exceptions to the named-accounts rule, said Paul Bazley, vice president of U.S. enterprise and partner sales at Microsoft. "In select high-impact early adoptions of .Net where it makes sense for MCS to participate aggressively, that still may happen, and we will review that as an exception."

While Bazley insisted that instances likely will be isolated and limited to a handful of companies with more than 4,000 PCs, one analyst said the exception amendment nullifies the named-accounts provision.

"While Microsoft is clear and unequivocal in naming specific customers that MCS will actively target, it leaves the door open to exceptions in the midmarket and doesn't clearly outline how the company is going to behave when it encounters partners competing for services business in either type of accounts." said Steve Graham, an analyst at IDC.

Many partners also worry about the constantly evolving channel organization and the long-term direction of MCS, which is technically under the umbrella of Mike Sinneck, the newly appointed vice president for worldwide services, but whose sales force also continues to report to Microsoft's sales division, according to inside sources at Microsoft.

In spite of the rules, Microsoft CFO John Connors told Wall Street last week that the company's services business "has been on an amazing trajectory."

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