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Microsoft Cloud Partner Program Changes Needed But Timing Poor, Partners Say

Wade Tyler Millward

“The idea of having a specialized level for things like business applications makes a partner with lots of Dynamics talent excited,” Zac Paulson, CEO of TrueIT, told CRN in an interview. “It should help distinguish one partner over another when it comes to areas of expertise.”

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Some Microsoft partners have told CRN that they are happy with changes unveiled this week for the tech giant’s partner program around partner-level designations and training, but the changes may add extra stress while partners continue to deal with the New Commerce Experience Microsoft launched this year.

The biggest changes under Microsoft Cloud Partner Program (MCPP) – the new name for Microsoft Partner Network starting Oct. 3 – include a new partner capability score (PCS) to separate base-level partners from so-called “solutions partners.”

Microsoft will also get rid of Gold and Silver designations and instead introduce new “specializations” and “expert programs” for partners to stand out.

Partners who are happy with the new score system tell CRN it’s about time Microsoft made it harder to receive badges and incentives that come with earning a specialization with Microsoft products and services.

[RELATED: Microsoft Introduces New Solutions Partner Score, Plans Program Name Change]

CRN has reached out to Microsoft for comment.

Multiple partners told CRN that they do not currently meet the new MCPP thresholds for specializations they want.

Microsoft executives announced these changes while the Redmond, Wash.-based tech giant’s New Commerce Experience (NCE) continues to roll out. Some partners have criticized a premium on month-to-month commitments to Microsoft packages such as Microsoft 365 – which includes Word, Excel, Teams and SharePoint – and a seven-day window for partners and customers to change plans before getting locked into a contract. Partners are also locked in with the distributor they used as part of the sale.

Michael Goldstein, CEO of LAN Infotech – a Fort Lauderdale, Fla.-based Microsoft partner and member of CRN’s 2022 Managed Service Provider (MSP) 500 – told CRN in an interview that the MCPP changes should be easier to implement compared to New Commerce Experience.

He said that he has expected for some time now for Microsoft to make its certifications more challenging. Getting rid of the Gold and Silver designations and better rewarding product and service expertise are good moves by Microsoft, he said.

Goldstein appreciates any effort to raise the bar for becoming a Microsoft partner, he said.

“It used to be, fill out these things, pay this fee and go out there – you’re a partner,” he said. “It is a maturing of the program.”

LAN Infotech meets some of the future specialization requirements from Microsoft, Goldstein said. He and his team are working to meet the rest before October.

Bobby Guerra, CEO of Jacksonville, Fla.-based Microsoft partner Axiom – a critic of parts of the New Commerce Experience who even started a petition calling for Microsoft to revoke the 20 percent premium on monthly – said that even more program changes while partners adopt NCE comes off as tone deaf.

“It seems irresponsible,” he said.

Microsoft’s New Partner Score Explained

For partners that want Microsoft to recognize them as “solutions partners” instead of base-level partners, they have to demonstrate net customer adds, technical certifications, usage growth and the number of solution deployments to score a partner capability score above 70 out of 100, according to Microsoft.

In one example of the change, partners with a cloud platform competency in Gold or Silver will likely look to achieve the new solutions partner for infrastructure (Azure) designation. Partners with this designation show a broad capability for delivering services with Dynamics 365 and Power Platform.

Under the cloud platform competency that Microsoft is doing away with, one way U.S. partners could achieve a Silver competency with $15,000 of Azure customer consumption in the previous 12 months and an employee who has passed a certain Azure exam.

Partners could achieve a Gold competency with $100,000 in customer consumption and two employees passing a certain Azure exam.

To achieve the new solutions partner for infrastructure (Azure) designation, partners need three net customer adds, 20 percent usage growth year over year, five deployments and other measures of success, according to Microsoft.

Partners can track their score through the partner dashboard, according to the company.

Customers can renew the benefits they use today or they can move to new benefits packages customized for their business, according to Microsoft.

Partners can continue to receive internal use rights (IUR) licenses such as on-premises licenses, cloud service subscriptions and Azure credits, though IURs are now called “product benefits.”

Partner incentive eligibility won’t change from October to September 2023, according to Microsoft.

More Partners React

Partners who spoke to CRN about the changes to Gold and Silver were mixed on the value of those designations for business.

Tanaz Choudhury, CEO of Houston-based Microsoft partner TanChes Global Management, told CRN in an interview that customers do respond well to badging from vendors that signifies a partner’s technical expertise.

“When we go into our clients and we tell them, 'Hey, we are Microsoft Gold and Silver-certified level certified, or Dell Gold partners, that translates to them as an elevated level of support,” she said. “So it's a marketing gimmick. But there is still value to it.”

Choudhury said she would like more time than the six months Microsoft has allotted for adopting MCPP changes. “It’s like they change the rules of the game during the game,” she said.

John Jordan, president of Knoxville, Tenn.-based Microsoft partner Ahieros IT, told CRN in an interview that his company decided against paying for Silver and Gold designations in the past because he didn't see a return on the investment when he and his colleagues already had other certifications.

“We did do some Silver – we didn’t see the payoff,” Jordan said. “One of the key things that both Silver and Gold is supposed to do is it’s supposed to help draw in new clientele. It never did. At the very end of the day, it was more so word of mouth.”

He is, however, interested in more training and workshop opportunities for partners and a higher level of customer support that might come with the new partner levels.

Zac Paulson, CEO of TrueIT — a Fargo, N.D.-based Microsoft partner and member of CRN’s 2022 MSP 500 – told CRN in an interview that he is glad to see Microsoft increase the difficulty of becoming a partner and reward partners that specialize.

“The idea of having a specialized level for things like business applications makes a partner with lots of Dynamics talent excited,” Paulson said. “It should help distinguish one partner over another when it comes to areas of expertise.”

The timing of the MCPP changes isn’t ideal, Paulson said, since partners are still grappling with New Commerce Experience. Still, he’s not surprised by more changes to Microsoft’s partner program and expects more in the future.

“It doesn’t surprise me that they are making tons of changes,” he said. “That business has evolved a lot and is ripe to change.”

Phil Walker, CEO of Network Solutions Provider — a Google partner based in Manhattan Beach, Calif., and member of CRN’s 2022 MSP 500 — told CRN in an interview that he is happy for the changes Microsoft is making overall. The competition for cloud and business applications is growing for Microsoft from companies such as Amazon Web Services and Google.

As the tech giant changes to meet customer demand, partners must also change, Walker said.

“The change is good,” he said. “It’s not always what we want, but good business is good business. Net new business should be a higher value to Microsoft. As competitors change, we all must adjust as well.”

Microsoft Turning To Distributors

Distributors such as Pax8, TD Synnex, AppRiver and Ingram Micro have proven key for some partners during the New Commerce Experience transition.

Rodney Clark, Microsoft’s corporate vice president of global channel sales and channel chief, suggested Wednesday that the distributors – or indirect partners, as Microsoft calls them – will continue to serve an important role in adopting program changes.

“We have opportunities for partners to engage more deeply with Microsoft – some directly with their PDMs (partner development managers) and others with their indirect partners that sit in the actual field and work with a lot of our partners,” he said.

In a statement to CRN, Nikki Meyer, vice president of global vendor alliances for Greenwood Village, Colo.-based Pax8, promised to help partner customers “navigate the new path forward.”

“Pax8’s Microsoft partners can come at these changes from a position of confidence, she said. “First, nothing will change for six months. Therefore, partners who are just catching their breath after NCE can breathe a little easier. Even then, the new designations for partners and the Microsoft Partner Capability Scores reflect their expertise inside this ecosystem.”

She continued: “As changes and programs with our vendor partners evolve, we will work through the specifics to discover where we can enable partners to thrive. Pax8 partners are the fastest-growing MSPs in the channel, so we expect to continue supporting their growth through our technology, education, and support. … We will continue that momentum for our channel partners and look forward to helping them navigate the new path forward.“

Geoff Bibby, senior vice president of small- to medium-sized business and consumer (SMB/C) at OpenText, the parent company of Dallas, Texas-based distributor AppRiver, told CRN in a statement that “this new rollout is the latest in a series of strategic changes Microsoft has made to ensure it is delivering the most value to its partners.”

“It signifies a major shift in the Microsoft Partner Program … while this is a major change for partners, it is manageable providing you have an indirect partner that can guide you,” Bibby said. “Although partners can only enroll in one benefits program, it’s important to note that those enrolled in the old benefits program as of Sep 30, 2022, can continue to pay for legacy Microsoft Partner Network benefits at their next renewal whether or not they qualify for a Solutions Partner designation. An experienced and dedicated Microsoft Indirect CSP should be able to bring you through a consultation showing you the best path forward for your business.”

CRN has reached out to TD Synnex and Ingram Micro for comment.

Partners Still Grappling With NCE

New Commerce Experience seat-based offers became generally available in January. Microsoft offered a 5 percent discount on NCE annual subscriptions to make annual commitments more appealing, but also provided a discount for monthly subscriptions that delayed the 20 percent premium partners protested. The Monthly discount runs until June.

March marked the start of partners needing to purchase all new subscriptions through NCE. Starting in July, all renewals must take place under New Commerce Experience instead of the legacy Cloud Solution Provider (CSP) program. In June 2023, all legacy subscriptions will be retired.

David Rigdon, a senior systems administrator at Computer Helper, a Douglasville, Ga.-based Microsoft partner, told CRN in an interview said that his company is still figuring out how Microsoft’s New Commerce Experience changes hit its customers and how to talk to customers about potential price hikes.

He said that Computer Helper’s customers are mostly in the legal and construction fields and that the company helps many customers transition from post office protocol (POP) and internet message access protocol (IMAP) to Microsoft products and services.

“We really need to know – what does our customer base pay for,” he said. “It’s just not been a great experience for us.”

Guerra of Axiom said he’s already trying to figure out how to upgrade at least one customer to a more expensive business plan with the new rules around customer lock in after seven days.

Another issue he’s navigating with his distributor is a cash float created because of changing so many customers’ commitments, but not yet getting the money from those commitments to offset NCE services provided by his distributor.

Guerra said that he was pleasantly surprised by the number of customers willing to move to an annual commitment. But the amount of hours it took to ready customers for the changes leaves him uncertain that he’s seen a return on investment just yet.

“I made some money in this, which I appreciate,” he said. “Microsoft has created some opportunities. Now, whether I made money if you factor in all the incredible amount of hours I've had to spend to go through to prepare all this, I don’t know if it really has been a real, truly profitable experience for us because – I'm not joking – it was probably two 60-hour work weeks getting ready for it. Weekends. People don’t like it when you screw their bill up, so we had to go through and do it the right way. Double check everything.”

As for LAN Infotech’s time with New Commerce Experience, Goldstein said that the discounts Microsoft has offered partners who adapt NCE early keep prices the same for now.

“Really what we did is we put off real changes till next year, because that's really what it comes back down to,” he said. “For those people that adopted this, they’re locked in and they kept the same price. The real rubber meeting the road is next year where we have to, then let the clients know, 'Hey, here's your renewal.’ I think next year is going to be the harder piece.”

He said many of his customers changed their service plans as a result of NCE. He declined to say whether NCE brought more revenue to LAN Infotech overall, but he did say that some customers upgraded to more expensive Business Premium and Enterprise plans while some prospective customers decided to move faster on projects to avoid price increases.

“There was plus – but it definitely was a lot of work to the last minute,” he said. “Like everything, I think the anticipation was worse. The bark was bigger than the bite.”

Choudhury of TanChes said that her company has become NCE certified and that customers understood that it wasn’t her company enacting the price change – it was Microsoft. Her customers were already used to yearly and multi-year commitments.

“We're one of the lucky ones that have that relationship with the clients where we can pick up the phone and let them know, 'Hey, this is what’s happening, this is where what it is. And we've always been honest with them. So whether they liked it or hated it, they always appreciated the honesty.”

Jordan of Ahieros said he is overall unhappy with the changes coming from Microsoft, saying that they seem to favor the largest partners who have the staff and capital to handle the short-term changes.

“It gives very large partners preference,” he said. “Certain ones that are growing or emerging, it doesn't.”

Wade Tyler Millward

Wade Tyler Millward is an associate editor covering cloud computing and the channel partner programs of Microsoft, IBM, Red Hat, Oracle, Salesforce, Citrix and other cloud vendors. He can be reached at wmillward@thechannelcompany.com.

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