Security Advantage

In the past quarter, the Redmond, Wash.-based company has significantly changed the way it allocates business investment funds (BIFs) through the rest of its fiscal year ending June 30.

BIFs are traditionally used by partners, especially in the enterprise space, to bankroll proofs-of-concept for new technologies. But now Microsoft is steering much of the money toward security and also funneling "Make It Right" funds to fix security problems and appease upset customers rather than incubate newer technologies, several sources said.

"There are some BIFs drying up, and Make It Right funding is increasing," said one longtime Microsoft partner, noting a new emphasis on security, patch management and network assessments.

Dan Duffy, CEO of ePartners, Dallas, said Microsoft is re-evaluating partner funding. "They are putting very stringent criteria in place, and it's appropriate," he said. The solution provider is working on an 8,000-seat Microsoft CRM deployment. "We're finding when [the project is] perfectly aligned with their strategic direction, there's no problem."

While some say it's business as usual for Microsoft to shift funds after midyear review, others see this as an aggressive effort to appease enterprise customers angered by security snafus and Licensing 6.0 policies. Many customers are balking at Software Assurance.

Others agreed the priorities have shifted fast and partners need to adjust or face funding shortages.

Microsoft is "taking a hard look at the proposals %85 and cutting back on those [BIFs] that don't make sense," said one Microsoft partner. "If you're strategic, you'll still get BIFs. Security is big now. So if you have something that will make an account secure and happier, you'll get [BIFs]."

Microsoft has sharply cut funding for three-week proofs-of-concept, but is funding two-day architectural assessments and making available Make It Right grants of $4,000 to $5,000 for partners to do network assessments and address complaints, sources said.

A Microsoft executive said the company is tipping its funding toward security, business intelligence, operational efficiency, collaboration and portal integration but would not directly respond to concerns that funding is tightening up for other more general projects.

"[Funding] for security initiatives has been above and beyond the increase Microsoft made to traditional business investment funding available for partners this year," said Margo Day, vice president of Microsoft's U.S. Partner Group. "We have continued to expand the number of sales programs and tools that qualified partners can participate in to fund proofs-of-concept, architectural design sessions," she said.

"Ballmer once called BIFs the magic elixir of partnerships, but what they've done is start emphasizing the Make It Right program," said one Northeast partner. "It's more customer-focused than partner-focused."

Microsoft should be cautious because BIFs help partners convince clients to adopt new technologies, said Ken Winell, president of Econium, Totowa, N.J. "Most of the monies are allocated for proofs-of-concept, or assessments, and by offsetting the [client] cost, Microsoft was able to get good adoption. If the funds have been scaled back, I hope the company is augmenting in other areas to keep the momentum going."