Microsoft Remodels Channel Program

Microsoft Corp. is retooling its channel program, tossing out the current system of levels and designations and replacing it with rankings meant to more accurately reflect partners’ skills, market focus, performance and success in satisfying customers.

The vendor announced the sweeping changes—including a new name, the Microsoft Partner Network—at its recent Worldwide Partner Conference, detailing its thinking behind the overhaul and introducing new partner categories, competencies and areas it intends to emphasize.

In diagramming the new scheme, Allison Watson, vice president of Microsoft’s worldwide partner group, called it the “next evolution of the Microsoft Partner Program, based on our continued commitment to support customer business success and achieve industry-leading partner and customer satisfaction.”

Microsoft last revamped its partner program in 2003, when it expanded the framework to include a wider range of partners all housed under one umbrella. At that time it established Gold, Certified and Registered tiers, incorporated better success measurements, segmented highly skilled partners and offered additional benefits.

Now, faced with a burgeoning array of new partner types sporting a greater variety of specialties and needs—and suffering a lack of differentiation among its upper tier partners—the vendor plans, over the next year and a half, to phase out its earlier membership levels and install four new categories, namely, Community, Subscriber, Competency and Advanced Competency.

Bigger channel budget

The upgraded naming convention spans a full range of partners, from entry level to top achievers and everything in between—Microsoft estimates that it works with as many as a dozen different partner types—and covers the gamut of the 360,000 program members worldwide.

Under the incoming program, Community partners will be those that are considering selling Microsoft products but have yet to do so; Subscribers will be partners that have committed to building a Microsoft business or skill in a particular area; Competency-level partners will have earned a solution specialization in the Microsoft program; and, Advanced Competency will be reserved for Microsoft’s highest level partners, those most committed to their Microsoft business.

“In the new Microsoft Partner Network, there’s a home for every partner, from traditional value-added resellers, system integrators and independent software vendors to emerging partners like Web platform developers, Web agencies and hosters,” Watson said. “Partners are in our DNA, and we’re evolving our program based on what customers and partner have asked for.”

With upwards of 95 percent of Microsoft’s revenue driven through its partners, the company readily acknowledges that their performance is critical to the vendor’s fortune.

Indeed, Kevin Turner, Microsoft’s chief operating officer, expressed the company’s commitment in dollars and cents when he told the conference’s assembled partners that the vendor will increase its channel budget some $400 million to $3.3 billion.

In the new format, at the Community level partners will not be required to produce much more than a name and an address to participate. However, at the Advanced level the company, among other conditions, will compel members to partake in regular, official customer satisfaction surveys. Results from those surveys will be used to assess partner performance.

Microsoft now counts about 16,700 Gold-certified partners worldwide, approximately 27 percent of which are based in the U.S. Since 2007, the category has grown about 30 percent globally and 50 percent in the U.S., prompting some resellers to complain that the designation has lost is luster and offers little distinction in competitive sales situations.

While it’s too soon to determine if the reformulated ranking criteria will pare the number of partners at the vendor’s highest level, Watson indicated that the more rigorous requirements of Microsoft’s new best-in-class grade should enable partners to better distinguish themselves from one another.