If you are in an Independent Software Vendor (ISV), built on the Azure platform, you may be wondering how to gain partnership traction with Microsoft. You can join one or more of the approximately 25 Microsoft Partner Network (MPN) competencies, but what then? Yes, you get great programmatic partnership benefits as well as very valuable content, but how do you get engagement to drive deal acceleration? How do you stay in tune with the roadmap, gain influence, and have a voice? Is there a master playbook that can guide and connect you through a windfall of partnering success? The practical answer is clearly “no.” However, I know that partnering success is fully achievable, but it requires you to look at what is happening in the industry with cloud, come to a realization on how you are viewed by Microsoft, and then do some smart/hard work.
First, if you are an Azure ISV, you are first and foremost a customer rather than a traditional partner. If you are a true ISV doing multi-tenancy solutions and using Azure as cost of goods sold (COGS) against your business model (i.e. the platform you innovate on), then you are obviously buying Azure via a pay-as-you-go (PAYG) model or via an Enterprise Agreement (EA).
As recently as six years ago, the traditional partnering model for ISVs with Microsoft was the Influence Revenue Model (IRM) where partners were measured based on how much revenue they influenced and in relation to their platform dependencies. Unfortunately, the true point of verifiable measurement wasn’t the IRM: at the end of the day, the transacting company (LAR/ VAR) was the point of verification, and ISVs couldn’t be directly and verifiably tied in scalable fashion to that model.
Today, things have changed, and changed drastically, in a very short timeframe. Today ISVs are seen as customers and partners, and as with all its partners, Microsoft is invested in your business growth. The more you innovate, the more your customers buy your Intellectual Property (IP), and the more Azure you consume.
The perfect equation is when Microsoft helps you not only as a customer but also as a partner. When that happens, you get plugged into more accounts, you sell more, and as a result Microsoft drives more Azure revenue from your success. Sounds just like the IRM of yesterday, but in this case, you are the verifiable point of measurement. It is pretty simple in the cloud world. However, getting there as a partner is not yet that simple.
Nintex is a great example of this. We were traditionally built on SharePoint as a platform, and we were measured by the IRM as well as other things such as SharePoint deployment, EA retention, new EA expansion, etc. Today, our fastest-growing product line is Nintex for Office 365, low-code drag-and-drop workflow, forms, and mobile-enabled solutions. The products are built on Azure, as we’re an early adopter, and it deploys into Office 365. As we’ve grown, with a great Microsoft partnership, we’ve had to triple the size of our Azure EA, and it will continue to grow by leaps and bounds as we continue to sell our Office 365/Azure based solution. As a customer, it is not that we want to spend a ton of money on our EA; however, for us it feels like a good thing. The bigger our customer base gets, the more usage and utilization that our partners and customers drive on their Office 365 tenancies, meaning more revenue for us. Based on our financials, the growth in our Azure EA looks to be sustainable.
The only possible gotcha for true SAAS ISVs out there that are architected as a multi-tenancy is around geographical revenue recognition. In other words, the salesperson who manages your Azure EA at Microsoft probably loves you, especially if you are growing it, but salespeople across the globe where you are selling might not get to enjoy the fruits of your business success. Transitioning a scalable way to recognize revenue to that level of detail beyond the ISV-as-customer relationship is not a trivial thing, and will most likely take some time to enable. Knowing Microsoft, they will make it happen.
So given this, the question is how do you partner with Microsoft in this new world?
I have five recommendations for you:
Set concise partnership goals. Be clear about what you want from your Microsoft relationship and in priority order. I have met partners of all types, including ISVs, VARs, SIs, LSPs, etc. that have no idea what they really want from Microsoft when they engage, and in larger organizations people are usually not at all on the same page. As a result, people engage with Microsoft in naïve fashion typically, they don’t know what they want, and as a result the folks at Microsoft who generally want to help you aren’t sure how to help you. Why? Because you honestly have no idea what you or your company wants from Microsoft….and please don’t say you want the proverbial lead flow. Microsoft has somewhere in the neighborhood of half a million partners worldwide. Why would they send the leads to you vs. someone else and how do you know that the person you are talking to can even help you? Set 3-5 clear goals for the relationship and work at it. Identify the people to speak with and figure out what can be done to progress.
Be selfless with your approach. Realize that any partnership takes work and reciprocal value from each party. I have met a lot of ISV partners that feel Microsoft owes them something because they are betting their technical path on Microsoft’s products. Well, that may be true, but you cannot walk in with that attitude. You might turn heads and get people moving on some of your demands, but you won’t ultimately get what you want. You will quickly build yourself a reputation as someone people want to avoid. My advice is to be available to them and help them get what they need to be successful, and they will intrinsically want to help you, be your champion, and fight the good fight on your behalf. This isn’t the old Microsoft. The people there care deeply about partners and want you to be successful as a business.
Be realistic. Cloud has made a lot of things easier, but it also requires a lot of work by a very big company to evolve its engagement and partnering model. Rome wasn’t built in a day. You have to understand how Microsoft works. It isn’t a monolithic company with one central HQ that makes everything happen through a singular program/model. This is a massive company with a complex set of P&Ls across the globe. Redmond includes the business groups that make and market the products (some reorgs in recent history separate products from outbound marketing, but you get the gist), it has a set of overlay customer segment strategy groups, the WW Partner Group, licensing, Customer Service and Support, and much, much more… In the field across the globe, each country is its own entity and operates against a central scorecard and revenue accountability, but it calls its own shots, largely. The way to look at it is you have the US, what they call Rest of World (ROW), and you have China. If you want to influence strategy you need to get plugged in at a corporate level and figure out who to speak with in Redmond. If you want engagement to drive deals you need to figure out who to speak with in the various countries you wish to further penetrate. This is much easier said than done, and it takes a lot of work, but if you do it right, have the right value prop aligned with Microsoft’s strategic priorities, it will pay dividends for your company. If you do it wrong or aren’t relevant to Microsoft’s scorecard, you will waste a lot of time and money.
Be smart about how you engage. When you meet with someone at Microsoft, figure out what they are measured on. Everything at Microsoft is based on alignment with a scorecard of myriad priorities. You could be talking to someone aligned to Azure revenue and consumption one day and to someone focused on Office 365 the next. One may care about you from an Azure perspective, and you may be perplexed why you cannot gain traction with the other person. If you don’t know what they are aligned to, you will likely never get anywhere in material fashion.
Invest and keep at it. Partnerships take a lot of work. This is not only the case with Microsoft, it is the case for any partnership. I believe that many new Microsoft partners feel that they should be able to sign up into a program (MPN), download their benefits, and then have Microsoft shower them with leads. This is not only untrue from a Microsoft perspective, it is untrue and unrealistic in general. In order for you to gain material value from a big vendor like Microsoft, you have to bring something to the table, you have to invest, and you have to keep at it. It always helps to have someone on your staff who knows Microsoft and how it works of course, but I know a lot of partners that have worked with Microsoft for years and know how it works better than some of the insiders, and they know where to place their bets and drive value from them.
Overall, it is my viewpoint that Microsoft is the best company in the world to partner with. Partnership is core to their DNA, it is how they drive the majority of their revenue in not only the traditional business, but also the cloud business, and it is what will continue to make them successful in the future. Based on my experience, Amazon and Google have a very long way to go vs. Microsoft in this respect. And although Microsoft is far from perfect, I believe they are poised to win with the channel.
At Nintex we are highly invested in our Microsoft partnership, and it is paying off, but it took a lot of hard work, continues to take a lot of hard work, and we will keep at it. I highly recommend that you find your own unique formula for what you define as success with Microsoft, invest smartly, and keep at it.
For more information around partnering in the Cloud, see my Channel 9 interview from a few days ago here: http://bit.ly/1OopIob
For more information about Nintex, go to http://nintex.com.
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