Microsoft Gets Choosy About Dynamics Channel Partners

Microsoft is going to devote more business development resources to resellers of its Dynamics ERP applications who bring in new customers and sell vertical industry applications that run with the Dynamics software.

"We're going to take a different approach going forward," said Chris Caren, Microsoft Dynamics general manager of product management and marketing, in an interview Wednesday at the company's Convergence 2009 conference in New Orleans. "It's a more proactive and more selective approach to how we use the channel."

Vendors are increasingly pushing channel partners to recruit new customers and add more value through add-on products and services -- not simply resell a vendor's products. Last month, IBM said it would adopt a controlled distribution model for its software, requiring resellers to be certified to sell IBM software such as Tivoli and WebSphere and provide more services around those products.

There are about 2,000 Dynamics partners at Convergence, and Microsoft executives, including Dynamics channel manager Doug Kennedy, began talking to resellers about the coming changes earlier this week.

Caren said the change is part of a move away from selling its ERP applications (Dynamics AX, GP, NAV and SL) on a horizontal basis through any reseller that wanted to carry the products to a greater focus on vertical markets, particularly retail, manufacturing, distribution, professional services and the public sector. The changes also will apply to channel partners that work with Microsoft's Dynamics CRM application in the midmarket.

Microsoft's intention is to recruit more VARs that offer more than technical implementation services. The company is seeking resellers that are good at selling and marketing to find new customers and either develop their own applications that work with the Dynamics software or partner with ISVs to deliver complete solutions.

In addition to steering market development funds to these solution providers, Microsoft will be forwarding most sales leads to them as well, Caren said.

Details about when the changes will be implemented and how channel partners will be evaluated are still being worked out, Caren said. More information will be disclosed in July at Microsoft's Worldwide Partner Conference in New Orleans, he said.