0107rcp_cover.v2 12/6/06 2:43 PM Page 1
RCPmag.com ✱ January 2007
Allison Watson and her team are intensely focused on your profitability. What’s in it for Microsoft, and which new partner resources are most valuable to you? 14 Project1 12/6/06 9:48 AM Page 1
ÌÌÀiÞÊLÞÊÃÃÃ¶Ê -ivi`ÕV>Ìi`ÊÃÕÀ}i¶ vÊ«ÀÊÜÌ ÕÌÊiÃÃö
/ iÊÜ ÞÊ`ÛiÊÌÊ >>}i`Ê-iÀÛViÃÊÜÌ ÕÌÊ ÃiÊ}Õ`>ViÊvÀÊiÝ«iÀÌö
i>ÀÊvÀÊÌ iÊiÝ«iÀÌð Ê>ÞÊÃÕVViÃÃvÕÊV«>iÃÊÜ Ê >ÛiÊÌ>iÊÌ iÀÊi>`ÊvÀÊ >>}i`Ê -iÀÛViÃÊ*ÀÛ`iÀÊ1ÛiÀÃÌÞ°ÊÊÊ -*1ÊëÀ}L>À`ÃÊÞÕÀÊ`ÛiÊÌÊ >>}i`Ê -iÀÛViÃÊÜÌ ÊiÝ«iÀÌÊ>`ÊÕL>Ãi`Ê>`ÛViÊÊ`iÛi«}]ÊLÕ`}]Ê>`Ê
>Ì>}Ê>Ê«ÀvÌ>LiÊ >>}i`Ê-iÀÛViÃÊ*À>VÌVi°Ê ÀÜÊÞÕÀÊ >>}i`Ê-iÀÛViÃÊ*À>VÌVi°Ê
Ê -*1ÊvÀÊ>ÊvÀ>ÌÛiÊÜiL>ÀÊ>`ÊÀiViÛiÊ >ÊV«iÌ>ÀÞÊV«ÞÊvÊÕÀÊL\ÊÊ
¸/ iÊÕ`iÊÌÊ>Ê-ÕVViÃÃvÕÊ >>}i`Ê-iÀÛViÃÊ*À>VÌViÊÊ
7 >ÌÊ ÛiÀÞÊ- Ê/Ê-iÀÛViÊ*ÀÛ`iÀÊ- Õ`Ê Ü°°°¸ >iÊLiÌÌiÀÊi`ÕV>Ìi`Ê`iVÃð
7iÊÜÀÌiÊÌ iÊLÊÊ >>}i`Ê-iÀÛViðÊÊ >ÊÕÃÊÌ`>Þ° nnnÓ{nÈ{
0DQDJHG6HUYLFHV3URYLGHU8QLYHUVLW\ ,17(//,*(17 (17(535,6( ÜÜܰëհÕà 0107rcp_TOC_1.v5 12/8/06 12:06 PM Page 1 Contents JANUARY 2007• VOLUME 2• NUMBER 1 FEATURES 14 DEPARTMENTS 7 Channel Report COOPETITION: Linux Deal: Too Good to Last? ...... 5 PARTNER PERKS: Seeking Solutions for the Skills Shortage ...... 8 MICROSOFT PARTNER CALENDAR ...... 10 TRAINING: 24 Learning from Afar—at Your Own Pace ...... 10 14 Partnering for Profitability 45 Solution Spotlight Allison Watson and her team at Microsoft are intensely focused on your Vista: You’ve read about it, seen it and tested it—now it’s profitability. What’s in it for Microsoft, and which new partner resources time to sell it. are most valuable to you? CHANNEL CALL: Keith Lubner Making the Partner-Vendor Marriage Last ...... 49 24 Vendor Consolidation With a few key strategies, partners can maximize profitability by COLUMNS leveraging the constant and sometimes disruptive force of consolidation. PARTNER ADVOCATE: Scott Bekker New Campaigns Signal a Shift in Gears ...... 2 31 Vertical Markets: Go Pro! PARTNER VIEW: Michael Proper Technology spending in the professional services industry is on the rise. Steering SMBs Toward Managed Services ...... 12 Find out how Microsoft partners can get in on the action. SELLING MICROSOFT: Ken Thoreson Playing to Win: Using Sales Contests to Hit Your Goals ...... 53 37 Best Practices: Internal Politics DIRECTIONS: Paul DeGroot Fed up with your client’s in-house turf wars? This advice from the What Industry Builder Says About Microsoft ...... 56 trenches will help you survive even the toughest of battles. Vista is here! RCPmag.com 45 Reader Survey Results: In our November reader survey, we FindIT Codes asked whether readers’ businesses were more profitable with 100 percent of their revenues coming from Redmond or with You’ll see FindIT codes participation from third parties, among other questions. Find embedded throughout out what respondents said. FindIT code: ProfitSurvey Redmond Channel Partner. Simply type these into the Seen & Heard: “... Finally we just got sick of the waiting game FindIT code box on any and morphed from wide-eyed ragamuffins into bitter, surly RCPmag.com page and teens, sneering at all the callous hype surrounding the ‘big you’ll jump directly to the desired information. (Note day.’” —Unwrapping gifts this holiday season? Nope, it’s Lee that all FindIT codes are Pender blogging on the anticlimatic and long-time-coming one word, and they are not Vista launch. Don’t miss a word—subscribe to his twice-weekly case-sensitive.) RCP Update newsletter. FindIT code: Newsletter COVER PHOTO BY BRIAN SMALE RCPmag.com JANUARY 2007 Redmond Channel Partner 1 0107rcp_Advocate_2.v5 12/8/06 11:47 AM Page 2 ChannelRedmond Partner RCPmag.com PartnerAdvocate January 2007 + Volume 2 + Number 1 Editor in Chief Scott Bekker [email protected] Executive Editor Anne Stuart [email protected] Senior Editor Lee Pender [email protected] Managing Editor Wendy Gonchar [email protected] Solution Spotlight Editor Lafe Low [email protected] NEW CAMPAIGNS Editors, RCPmag.com Becky Nagel [email protected] Michael Domingo [email protected] SIGNAL A SHIFT Associate Managing Editor Katrina Carrasco [email protected] IN GEARS Art Director Scott Shultz [email protected] Contributing Designer Helen Zhai BY SCOTT BEKKER s a company that drives its business Customers test Office as a free trial. Group Publisher Henry Allain through its partners, Microsoft’s prod- Those who like what they see can pur- [email protected] Editorial Director Doug Barney uct groups and its partner team should chase product keys from their resellers. [email protected] Group Associate Publisher Matt N. Morollo be working hand-in-hand during prod- The OEMs and resellers get commissions. [email protected] Director of Marketing Michele Imgrund uct development to make sure all new Microsoft says the momentum around [email protected] Senior Marketing Manager Tracy S. Cook A offerings clearly align with partner busi- the new products, already immense, is [email protected] ness opportunities. building for partners. For example, the Creative Director Scott Shultz [email protected] There was plenty of evidence that company says more than 4,500 systems Senior Web Developer Rita Zurcher [email protected] Microsoft had its partners’ success in integrators are trained on Windows Vista Marketing Programs Videssa Djucich Manager [email protected] mind during the simultaneous “busi- so that they’re ready to perform massive Editor, ENTmag.com Scott Bekker ness launch” on Nov. 30 of Windows upgrades at launch. But some partners [email protected] Editor, MCPmag.com Michael Domingo Vista, Microsoft Office 2007 System have told me they’re not feeling that [email protected] Editor, Redmondmag.com Becky Nagel and Exchange Server 2007. (Broad momentum given the delays and the way CertCities.com [email protected] Associate Editor, Web Gladys Rama availability for consumers and non- Vista is dribbling out in a two-part [email protected] Intern Michelle Rutledge volume business customers is set for launch. Analyst studies predict a bump in [email protected] later this month.) sales, but they also indicate that much When it comes to making a business Vista and Office business will be driven President & CEO Neal Vitale case for Vista, the argument boils down to by system replacements. [email protected] emphasizing greater security and easier, In some ways, the disconnect CFO Richard Vitale [email protected] cheaper deployment and management. between Microsoft’s view and some Executive Vice President Michael J. Valenti To get partners prepared and to help them partners’ perceptions may just be a dif- [email protected] take advantage of opportunities in desk- ferent style of customer marketing that Director of IT Erik Lindgren [email protected] top rollouts, Microsoft created a new coincides with this generation of prod- Director of Circulation and Abraham Langer Data Services [email protected] Windows Desktop Deployment uct releases. Many of Microsoft’s newer Director of Web Operations Marlin Mowatt competency specialization. campaigns for partners, most notably [email protected] Director, Print Production Mary Ann Paniccia Another encouraging partner pro- “People Ready,” are built around con- [email protected] Controller Janice Ryan gram is a new Office incentive exploit- versations with customers that focus on [email protected] ing the massive hard-drive capacity in business solutions rather than on partic- Director of Finance Paul Weinberger [email protected] new systems for partner—and ular versions of Microsoft products. Chairman of the Board Jeffrey S. Klein Microsoft—benefit. Have customers What do you think? Is Microsoft put- [email protected] who don’t realize they’re interested in ting the right kinds of programs and Redmond Channel Partner Office? No problem. Under Microsoft’s marketing out there for you to get your The opinions expressed within the articles and other contents hereindo not necessarily express those of the publisher. new program, OEMs and channel business going on the new wave of soft- resellers can load Office onto the new ware? E-mail me your thoughts at PC anyway at no cost to themselves: [email protected]. • BPA Worldwide Membership Applied for March 2006 2 Redmond Channel Partner JANUARY 2007 RCPmag.com Project1 12/7/06 10:27 AM Page 1 Keeping pace, smart. Setting it, Here’s another way for our partners to take the lead. Gain an edge over the competition with the comprehensive new set of Microsoft® ForefrontTM security products—and we’ll pay you up to 30%* back in advisor fees when you join our free Security Software Advisor program, which now includes additional license levels. Stay ahead of the competition. https://partner.microsoft.com/secureopportunity/ *To qualify for up to a 30% software advisor fee on our Forefront security solutions you must be a registered member of the Microsoft Partner Program and sign the advisor fee addendum. See Web site for full details: https://partner.microsoft.com/securitysoftwareadvisor RCPPprofile.v4 12/7/06 12:13 PM Page 1 ADVERTISEMENT Q How do your users respond to the software? A Very enthusiastically! Sometimes we’re embarrassed by the praise.Check out the testimonials on our website. Q Sounds great! You should sell tens of thousands of copies if it’s that good. RCPP A Already have – across 70 countries. REDMOND CHANNEL PARTNER PROFILE Q Tell our readers how you’d support them as a VAR partner. A We have reseller programs with margins, technical forums and free email support with one business day TAILOR-MADE SMB turnaround.These programs are straightforward – like our software – and it’s easy to get started.Our Reseller Center BACKUP SOLUTION provides lots of best-practice techniques,marketing collateral and even business development ideas. BECOMES UNEXPECTED But the real difference is our responsiveness:we listen to our resellers.You’ll feel like part of the family because RUNAWAY SUCCESS we’ll give you personalized service and implement many of Martine Klump your feature requests.That’s also what makes it fun for us! Reseller Relationship Q So for VARs who want to know more? Manager A Visit our special portal for RCP readers: http://rcp.backupassist.com – we’ve assembled an information kit with a NFR of BackupAssist,valued Q What differentiates your backup solution in the market? at $147.Feel free to download the software,and contact A BackupAssist was created to fill a gap in the marketplace.SMBs with 1 to 3 us to experience truly world-class service. servers need a proper backup system – more comprehensive than the receptionist manually burning DVDs every week,but simpler than the “mainstream”solutions PLEASE VISIT: which can be too complex and expensive.We tailor-made BackupAssist to suit the http://rcp.BackupAssist.com needs and budget of SMBs – that’s why it’s so popular. Q Who are your users and VAR partners? A Many are “converts”from other products – struggling and frustrated with their complexity,cost and unreliability.They Googled and found us! Others were simply looking for a straightforward,automatic backup solution.Thousands of businesses, schools,universities,governments and even publicly listed corporations use BackupAssist. Q What does BackupAssist offer for small business clients? A BackupAssist provides a best-practice backup system for Windows Servers, including Exchange,SQL and SBS.Moreover,it automates the process with non-technical users in mind. Cost savings are another advantage.Compared to other solutions (which contain “bells and whistles”like enterprise features or heterogeneous environment support),using BackupAssist can save up to $1400.And we support popular hardware:Tape,USB HDD,and DVD and NAS. Q And for more advanced requirements like Exchange and SQL Server? A Yes,we have add-on modules that backup Exchange Mailboxes (for archiving and retrieving individual messages),SQL Server,and Open Files where VSS is not available.Sweet and simple – that’s our approach. A simple backup system for SMB,“out of the box”.Even SQL, Q How does BackupAssist help VARs? brick-level Exchange and open file backups are made easy. A Because BackupAssist is designed for simplicity,there’s little skill-up time,and you don’t waste money on training or certification.It runs reliably,so you don’t waste time on maintenance.For managed-services businesses that’s great because each administrator can service more clients.Plus you can finally give your smaller clients a best-fit solution. 0107rcp_CR_5-10.v7 12/11/06 1:43 PM Page 5 TRENDS + ISSUES + ANALYSIS ChannelReportEDITED BY ANNE STUART COOPETITION LINUX DEAL: TOO GOOD TO LAST? Microsoft-Novell Other terms include about $450 million in payments from Microsoft to reach pact, then Novell for the rights to at least 350,000 come to blows. SuSE Linux Enterprise subscriptions, By Scott Bekker joint marketing and advertising, a joint sales force and a patent-agreement payment. Novell will pay Microsoft at least $40 million before the deal expires on Jan. 1, 2012. The compa- nies are also supposed to work together on Windows-Linux interoperability in such areas as virtualization, Web Suddenly Ballmer was making it look like the deal meant that Novell was t was a shocker of a reconciliation—Microsoft Corp. teaming with Novell Inc. on a paying protection Linux deal. But Steve Ballmer couldn’t let things stand. Within days after the two companies money on announced the historical agreement, Microsoft’s CEO started talking about what it behalf of the Linux meant for intellectual property, and the resulting furor left the newly strategic part- ners issuing dueling statements on each of its Web sites. community. Within a month of the agreement, announced in early November, partners were left scratching their heads. Should they study the Microsoft-Novell agreement to map out a business strategy leveraging the new alliance, or head to the Microsoft Partner Portal services management and document for the old documents on competitive selling against Netware, Groupwise, Novell’s translation, according to summaries directory and Linux? of the deal. I The most contentious portion of the five-year deal is an agreement between Jupiter Research analyst Joe Wilcox Novell and Microsoft to provide patent protection from each other to each compa- offered a succinct summary on his ny’s mutual paying customers. On the Linux side, the arrangement applies only to Microsoft Monitor blog for what the Novell’s SuSE Linux Enterprise, theoretically strengthening that distribution’s deal does for the two companies: “The market strength. CONTINUED NEXT PAGE ILLUSTRATION BYILLUSTRATION PAGE DAN RCPmag.com JANUARY 2007 Redmond Channel Partner 5 0107rcp_CR_5-10.v7 12/11/06 1:43 PM Page 6 ChannelReport Don’t miss our new TechPartner event. Details at TechMentorEvents.com. CONTINUED FROM PAGE 5 arrangement is a makeshift way for the ment that Linux infringes upon any Microsoft intellec- IDC’s position is two companies to work around their oil- tual property. When we entered the patent cooperation and-water licensing models.” agreement with Microsoft, Novell did not agree or that cooperation Then Ballmer threw down a glove admit that Linux or any other Novell offering violates during a Q&A session after his keynote Microsoft patents,” Hovsepian wrote. between Microsoft speech at the Professional Association for To Al Gillen, an analyst with Framingham, Mass.- and Novell on SQL Server (PASS) Community Summit based research firm IDC, the episode brings back some in Seattle in mid-November. “The fact that bad memories. “We went through a period of time when Windows-Linux [Linux] uses our patented intellectual the hype machine at Microsoft was generating [mes- property is a problem for our sharehold- sages that] ‘open source is bad, Linux is bad, it’s destroy- interoperability ers,” Ballmer was quoted as saying. “You ing IP.’ Steve Ballmer was beating this drum about six could be good for the could say anybody who has got Linux in years ago,” Gillen says. “They’ve moved away from that their data center today sort of has an message very dramatically. They shifted to competing industry, and Novell undisclosed balance sheet liability.” on operating costs and business value rather than on Suddenly Ballmer was making it look fear, uncertainty and doubt.” is probably like the deal meant that Novell was pay- Now, Gillen says, Microsoft is once again “putting some Microsoft’s best ing protection money on behalf of the uncertainty about Linux in customers’ minds. Ballmer’s Linux community. rhetoric now is similar to what we had six years ago.” partner for such Novell CEO Ron Hovsepian fired back IDC’s position is that cooperation between Microsoft in an open letter on Novell’s Web site. and Novell on Windows-Linux interoperability could a project. “Importantly, our agreement with be good for the industry, and Novell is probably Microsoft is in no way an acknowledg- Microsoft’s best partner for such a project. “Red Hat believes that the only good code is open source code. Novell takes the idea that there’s value in open source, there’s value in proprietary Microsoft Customer Landscape and there’s value in making them Following is a breakdown of Microsoft’s global customer-company population: both work together,” Gillen says. As a Microsoft partner, how CHARACTERISTICS seriously should you take this NUMBER WORLDWIDE: deal? Analysts George Weiss and John Enck of Stamford, Conn.- based research firm Gartner had some solid advice in a research note for IT that applies equally well to partners. “Consider the publication and execution of a joint Microsoft-Novell roadmap as the critical missing piece of this agreement, with the potential to SMALL BUSINESS MIDMARKET CORPORATE ENTERPRISE make or break its long-term Fewer than 25 PCs 25–500 PCs 500–1,000 PCs More than 1,000 PCs value,” the pair wrote. The companies promised a first 1–49 50–1,000 1,000–5,000 More than 5,000 roadmap in March. If there’s no employees employees employees employees document by then, look elsewhere 40 million 1.2 million 16,000 2,000 for your next opportunity. • SOURCE: MICROSOFT With reporting by Anne Stuart. ILLUSTRATION BYILLUSTRATION MY PATACCHIOLA 6 Redmond Channel Partner JANUARY 2007 RCPmag.com Project3 11/9/06 11:28 AM Page 1 GROWING WITH HP JUST GOT A WHOLE HECK OF A LOT EASIER. Thanks to our enhanced ante on others. But really we’ve PartnerONE program, working with made it easier for you to grow your HP is more rewarding than ever. Of business and help your customers course, you’ll still get the marketing grow as well. tools, financial incentives and training Our newest rebate, Attach you need to grow. Plus, allows twice as many partners to But now when you partner earn financial incentives by working with HP, you’ll be able to reap even with HP than before. This way, you greater rewards. We’ve simplified can give your clients the tools they need a few things, and we’ve upped the to grow and grow a bit yourself. Learn how you can boost your margins through PartnerONE. Click hp.com/partners/us/go/24 U.S. HP PartnerONE Program. ©2006 Hewlett-Packard Development Company, L.P. 0107rcp_CR_5-10.v7 12/11/061:43PMPage8 A Redmond ChannelPartner 8 Channel H KLSSHORTAGE SKILLS THE FOR SOLUTIONS SEEKING PARTNER PERKS with thefirstphaseaimedatimproving skillsaroundcurrentgenerationproducts.(See examsand training.certification organizations, withspendingfocused oncurriculum developmentanddiscountsonboth ment toincreasethenumberofskilledITprofessionals worldwideavailable for partner SkillsPlus.AnnouncedinMay2006,theprogramconsistsofa$30millioninvest- Partner gotaformalMicrosoft’s namefor problems: itseffort tocombattheskillsshortage Skills Investment new code. were trainedontheoldergenerationofproductsfindthemselves unfamiliar withthe Vista toWindowsLonghorn isonlygoingtoexacerbatethatproblem,aspeoplewho other forums. Councils andat Advisory inPartner complaints Microsofthearsfromitspartners shortage ofskilledemployees By AnneStuart complaint. premiere partner address a Plus programto Skills Partner Microsoft wields Microsoft began serious spending out of the Partner SkillsPlusbudgetinNovember Microsoft beganseriousspending outofthePartner currentlybreakingwaveofnewproductlaunches fromWindows The company’s Report JANUARY 2007 RCPmag.com in the labor pool is one of the most common industry in thelaborpoolisoneofmostcommonindustry Visit RCPmag.com/techlibrary Visit RCPmag.com/techlibrary for freeguides,whitepapersandwebcasts. this year. mostly underwraps,inthefirsthalf of second phase,detailsofwhichare still The companyisrampinguptolaunch a SkillsPlusPhaseI,”“Partner thispage.) ✱ SAVINGS: ✱ INCLUDE: INCENTIVES AND OFFERS through June30. trained isinfullswingandruns zations gettheiremployees organi- incentives tohelppartner SkillsPlusprogramof Partner The firstphaseofMicrosoft’s SkillsPlusPhaseI Partner SOURCE: MICROSOFT COVERED: PRODUCTS ✱ ✱ ✱ TESTS: PRACTICE ✱ ✱ ✱ SAVINGS: EXAM DYNAMICS MICROSOFT ✱ ✱ Dynamics Windows MobileandMicrosoft Communications Server, Visual Studio2005,Live 2005, BizTalk 2006, Server Professional Series Exam Technology Specialistand Registered Members: 25%off 100 voucher cap Gold Certified Partners: 25 voucher cap Certified Partners: 5 voucher cap Registered Members: (100 voucher cap) Gold Certified 30%off Partners: voucher cap)(25 Certified 25%off Partners: (5 voucher cap) Registered Members: 25%off (100 voucher cap) Gold Certified 30%off Partners: voucher cap)(25 Certified 25%off Partners: (5 voucher cap) SQL Server ILLUSTRATION BY JOHN D. DYKES 0107rcp_CR_5-10.v7 12/11/06 1:43 PM Page 9 Want RCP’s take on hot technologies? Visit the Solution Spotlight archive at RCPmag.com. ChannelReport Don Nelson, worldwide general manager of partner sales and Microsoft Partner Program. The program also included vouch- readiness, says Microsoft officials want to make it easier, faster ers for practice tests. and cheaper for partners to get certified on the company’s tech- Nelson says Microsoft’s Phase II programs will be more creative nologies. “That’s better for them, better for the customers and and interesting to partners than the vouchers and discounts of better for us,” Nelson says. A corollary is that training helps with Phase I. And he says Microsoft will continue fine-tuning the pro- employee retention, Nelson says: “When owners invest in certify- gram and investing in it. ing their people, people tend to be more loyal to the organization.” “It’s not a quick-fix thing,” Nelson says. “It’s not something Nelson acknowledges that certifications aren’t a perfect way that if we run a program for one quarter, we’ll have it solved. to measure knowledge transfer, but, he adds: “It’s the best way This is going to be a serious ongoing effort over a number of that we have. It’s a good measure of their abilities to take skills years.” into the marketplace.” Meanwhile, Microsoft partners are becoming a primary con- stituent of, and even a driving force behind, Microsoft’s broader Phase I Discounts IT certification programs. Nelson says that about 40 percent Microsoft’s Phase I program focused training around SQL of all certifications in the last year have been earned by Server 2005, BizTalk Server 2006, Visual Studio 2005, Live Microsoft partner company employees. Nelson expects the Communications Server, Windows Mobile and Microsoft Partner Skills Plus investment to increase the partner compo- Dynamics. It involved discounts of 25 percent to 30 percent nent of overall certifications to around 50 percent.• off exams, depending on a partner’s enrollment level in the Scott Bekker contributed to this report. IDI6A H:8JG>IN ;DG NDJG DG<6C>O6I>DCÁH H:CH>I>K: 96I6 :K\ 'HYLFH 6HFXULW\ ,V &UXFLDO 8ZciZgIddah ^h Xdbb^iiZY id hZaa^c\ i]gdj\] 3$571(5,1* ª HZch^i^kZ YViV XVc WZ Xde^ZY id bdW^aZ hidgV\Z X]VccZa eVgicZgh l^i] Vc V\\gZhh^kZ gZhZaaZg YZk^XZh! hjX] Vh JH7 hi^X`h VcY ZkZc bZY^V eaVnZgh egd\gVb YZh^\cZY id hjeedgi djg eVgicZghÁ )25352),7 ª >c[dgbVi^dc Y^hXadhjgZ YjZ id adhi hidgV\Z YZk^XZh hVaZh VcY bVg`Zi^c\ Z[[dgih ª JcbVcV\ZY YZk^XZh ZmedhZ cZildg`h id ViiVX`h ª HVaZh VcY iZX]c^XVa igV^c^c\ ª $**5(66,9(0$5*,16 ª KdajbZ ^cXZci^kZh 7KH 'ULYH/RFN 6ROXWLRQ ª 9ZY^XViZY X]VccZa bVcV\ZbZci ª 7($06(//,1* ª 7ROOIUHH _ SDUWQHUV#FHQWHUWRROVFRP _ ZZZGULYHORFNFRP RCPmag.com JANUARY 2007 Redmond Channel Partner 9 0107rcp_CR_5-10.v7 12/11/06 1:43 PM Page 10 ChannelReport Get the latestchannel headlines from our e-newsletter, RCP Update . TRAINING A typical MODL session is divided into four parts: a two-hour LEARNING FROM AFAR— virtual classroom session via Live Meeting, one hour of home- work, one hour of scenario exercises and a 10-minute feedback AT YOUR OWN PACE assignment. While much of MODL’s emphasis is on the con- venience of self-paced learning, the program places equal New model spreads training over weeks instead importance on increasing student interaction, a benefit that’s of days. By Gladys Rama sometimes a casualty of distance-learning environments. MODL offers “a lot of interactions and a lot of activities that students have to reply to, write on, etc.,” Johnson says. “There’s new Microsoft program takes the long road to distance learning a lot of great interaction [with] students working together to by stretching class schedules from five days to five weeks. solve the problems. And there’s also a nice anonymity, where In November, Microsoft launched its Microsoft Official the students can feel free to answer the question—even if they Distance Learning initiative (MODL), a blended learning pro- aren’t sure of the answer—because they’re sitting there at their gram that uses Microsoft Office Live Meeting to conduct desktop and not being watched by their peers.” Microsoft Certified Trainer-led classes, which students reinforce MODL is available exclusively through Microsoft partner com- A with self-paced homework assignments and scenario exercises. panies holding learning-solutions certifications. The program MODL Innovations Product Manager Wendy Johnson calls currently offers three courses on Microsoft Server 2003, with the program a more productive and convenient alternative to more courses scheduled to debut later this year. Visit the pro- intensive classroom programs that pull students out of work for gram’s Web site at Microsoft.com/learning/modl. • five days. In contrast, MODL classes are spread over a five-week period, with ample time between sessions to review and prac- Gladys Rama ([email protected]) is Redmond Media tice the concepts covered. Group’s associate editor, Web. FOLLOWING IS THE LAUNCH TOUR’S INITIAL ITINERARY: JANUARY 2007 Mid-Atlantic Launch 16 23 30 Training Series Following are listings for upcoming events Indianapolis, Ind. Birmingham, Ala. Boise, Idaho These two-hour product- that may be of interest to Microsoft channel (Event ID: 10323158380) (Event ID: 1032315855) (Event ID: 1032316012) specific sales sessions are Des Moines, Iowa Atlantic City West, N.J. Louisville, Ky. held in Washington, D.C. partners. (Event ID: 1032315840) (Event ID: 1032315852) (Event ID: 1032316010) Partners may attend in Greenville, S.C. Cleveland, Ohio person, by telephone or The Microsoft Across ■ Exploring customization Las Vegas, Nev. (Event ID: 1032315807) (Event ID: 1032315854) via Live Meeting. Training America Tour Is Coming! possibilities of application (Event ID: 1032316009) Memphis, Tenn. Oklahoma City, Okla. Philadelphia, Pa. sessions are free, but pre- Beginning this month, templates (Event ID: 1032315839) (Event ID: 1032315856) (Event ID: 1032316013) registration is required. Microsoft’s TS2 Team will visit ■ Examining various authoring Portland, Ore. Brookfield, Wis. Visit the Microsoft events communities nationwide for a tools and development processes (Event ID: 1032315853) (Event ID: 1032316011) site for details. Following series of live launch events are January’s sessions: offering partners a first look at 18 Fort Wayne, Ind. Windows Vista, the 2007 Participants will also receive: (Event ID: 1032315848) Microsoft Office system and ■ Advice on building service 25 Feb 1 Baton Rouge, La. Orlando, Fla. Microsoft Exchange Server opportunities around Windows Santa Clara, Calif. 10 (Event ID: 1032315847) (Event ID: 1032316002) Selling Vista 2007. The half-day sessions will Vista (Event ID: 1032316033) Omaha, Neb. Secaucus, N.J. (Event ID: 1032316739) include live demonstrations ■ A first look at the 2007 release Loveland, Ohio (Event ID: 1032315835) (Event ID: 1032316000) and cover both technical and migration and deployment tools (Event ID: 1032316034) Charlotte, N.C. Columbus, Ohio sales issues. ■ An overview of resources Pittsburgh, Pa. available to encourage cus- (Event ID: 1032315849) (Event ID: 1032316001) (Event ID: 1032316032) Nashville, Tenn. Tulsa, Okla. Agenda items include: tomers to migrate to upgraded Sandy, Utah 24 (Event ID: 1032315846) (Event ID: 1032316003) (Event ID: 1032316036) Selling Exchange ■ Creating out-of-the-box PCs … and more. Spokane, Wash. (Event ID: 1032316740) solutions for small and midsize Madison, Wis. (Event ID: 1032315999) customers Launch events are free, but (Event ID: 1032316035) ■ Evaluating collaboration pre-registration is required. opportunities for Windows Visit the Microsoft events site Dates, times and agendas are subject to change. For information, schedule updates and registration, SharePoint Services for details. visit www.microsoft.com/events, where you can search by event ID code or browse listings by date. 10 Redmond Channel Partner JANUARY 2007 RCPmag.com Project2 11/27/06 11:45 AM Page 1 Outstanding Partners! 10g Database and Applications Applications Business Intelligence App Server Momentum Momentum SMB Solution Solution E-Business Suite Grid and RAC Industry Solution Industry Solution Solution Solution Integration and SOA JD Edwards PeopleSoft Security and Identity Solution EnterpriseOne Solution Enterprise Solution Management Solution Siebel Solution SMB Database 10g Solution Special Thanks to the Oracle North America Titan Award 2006 Winners Win More With Oracle partner.oracle.com or call 1.800.323.SELL Copyright © 2006, Oracle. All rights reserved. Oracle, JD Edwards, PeopleSoft and Siebel are registered trademarks of Oracle Corporation and/or its affiliates. Other names may be trademarks of their respective owners. 0107rcp_PartnerView_12.v4 12/8/06 1:45 PM Page 12 PARTNER VIEW For these reasons, partners should encourage many SMB owners to have their IT functionality deliv- ered as a service managed by an outsourced provider. That message is a powerful one for partners: Managed IT services can help SMBs reduce the cost of acquiring and managing an enterprise-class technology infra- structure by delivering a complete computing solution MICHAEL PROPER for a consistent monthly fee. Benefits worth explaining to SMB customers include: ■ Simplicity. Instead of worrying about piecing together different technology components, SMBs get a complete, standardized, integrated solution. As a Steering SMBs bonus, they don’t need to deal with multiple vendors and bills. ■ Affordability. SMBs can enjoy the collective pur- Toward Managed chasing power of larger organizations by spreading their infrastructure costs across multiple customers. They also don’t need to worry about large, up-front capital expen- Services ditures. Rather, they can simply lease the equipment they need. it down with any owner of a small to midsize business (SMB) ■ Manageability. Many SMB technology headaches for a quick cup of coffee, and you’re bound to hear a long list of come from technical support and security issues. With managed IT services, the service provider takes respon- things that keep him or her awake at night. Somewhere near the sibility for supporting and securing the SMB customer’s Stop of that list are likely to be headaches concerning the company’s infor- network. ■ Accountability. Customers have one point of con- mation technology. tact for all their network, hardware and software services. Most small businesses can’t afford the luxury of having a qualified IT Meanwhile, providers are motivated to make sure that administrator, let alone an entire IT department, to manage a network and they deliver reliable solutions. its assets. SMB owners know that they need reliable, up-to-date technology ■ Low-Risk Investment. Because there are no large, to survive in their competitive business environments, but they may well up-front expenditures and customers only pay a monthly find the challenges of continually understanding, implementing and man- software fee, the monetary risk is lower and less daunt- aging their technology overwhelming. ing for most SMBs. That’s where partners who provide managed services can step in. SMB Partner companies that recognize the benefits of owners, as ever-ready entrepreneurs, typically thrive by having their critical outsourcing are able to help their SMB customers take a business information at their fingertips. Knowing that they need the best long-term approach to growth planning. Rather than computers and networks that they can afford, they must figure out a way to going for the quick return of selling additional hardware acquire and maintain IT assets without crippling company finances. components individually, partners can show commit- Partners have a real opportunity to sell to SMB owners, who look to ment to their customers by looking at outsourced them to provide technology solutions. The key to success here is that SMB options, whether they deliver them themselves or partner owners generally don’t want to worry about the gritty details underlying with established providers. infrastructure decisions, such as what kind of servers they should use or The bottom line: Managed IT services can free SMB exactly how they’re storing their data. Instead, they simply want the customers from having to worry about managing their IT confidence that their systems are working and that they are able to access infrastructures so that they can focus on what they do messages and data when they need them. best—running their businesses and remaining competi- Even companies large enough to have some in-house IT support can tive in their markets. • better spend their resources on strategic initiatives than on managing low- level functions. Outsourcing basic IT services frees them to focus on more Michael Proper is CEO of DirectPointe Inc., a Lindon, Utah- critical functions that sit on top of their IT infrastructure. based Certified Partner and provider of managed services. PORTRAIT BY SCHNARE JILLIAN 12 Redmond Channel Partner JANUARY 2007 RCPmag.com 1206rcp_SubAd.Final 11/8/06 12:45 PM Page 1 DRIVING SUCCESS IN THE MICROSOFT PARTNER COMMUNITY Redmond Channel Partner directly serves the Microsoft channel and includes editorial content that is 100 percent focused on the strategic needs of this valuable group. Become an ACTIVE SUBSCRIBER today and start receiving the indispensable information you need to deal with competitive issues, address common customer objections, and profitably position Microsoft technologies. Apply for your FREE subscription, in print or digital format, by visiting: http://rcpmag.com/subscribe 0107rcp_F1Profit_14-22.v7 12/8/06 2:15 PM Page 14 “We’re committed to building a profitability model and then benchmarks for partners by competency, and at the same time we’re going to think richly about the needs of the partners in those competency areas.” —Allison Watson, Corporate Vice President for the Worldwide Partner Group at Microsoft PartneringWHAT MICROSOFT’S PARTNER TEAM IS DOING TO BOOST YOUR for BOTTOM LINE. OVER THE LAST YEAR, you’d be hard-pressed not to have noticed the word “profitability” if you’ve read any e-mails, brochures or PDFs written by Microsoft for partners. It’s been almost an obsession. Overt efforts around profitability include closer work with the product groups, a half-dozen commissioned reports and a new online tool focusing on ways to make partner businesses more profitable. The word surfaces as a major theme of many campaigns Microsoft undertakes on partners’ behalf. On the surface, this emphasis shows the strength of the Microsoft Partner Program. Rated as one of the healthiest and largest channel programs in the IT industry by analysts and others who perform cross-industry measures, the program is able to reach down and help pull partners up to better prof- itability levels. In fact, that’s a perk of being in the Microsoft Partner Program. 14 Redmond Channel Partner JANUARY 2007 RCPmag.com 0107rcp_F1Profit_14-22.v7 12/8/06 2:15 PM Page 15 By Scott Bekker | Photography by Brian Smale Allison Watson (left) told her team in the Microsoft Worldwide Partner Group to help partners make more money. Naseem Tuffaha (center) focuses on ISVs’ bottom lines, while Todd Weatherby (right) oversees the online profitability self-assessment tool for partners. 0107rcp_F1Profit_14-22.v7 12/8/06 2:15 PM Page 16 FEATURE| Profitability “We sometimes underestimate what [partners] can do, and we sometimes overestimate what they can do, and how sophisticated they are.” —Todd Weatherby, General Manager, Partner Systems at Microsoft For Microsoft, it shows an ability to Microsoft, frames all of Microsoft’s WORKING WITH move beyond traditional concerns of recent partner profitability efforts as THE PRODUCT GROUPS channel programs by the size, strength consistent with a larger fact about Billions of dollars in product development and depth of partner offerings. But Microsoft. investments will come to fruition for Microsoft is known for being busy and “Microsoft is a platform company in Microsoft this year with the release of smart. Is there a deeper explanation? our product view. I view partnering as a Windows Vista, the Microsoft Office View Microsoft as a bellwether for the IT platform for this company. We build a Systemand several servers. For a product- industry in general, and the quest to platform on which individual partners focused company like Microsoft and for its make partners more profitable looks like can be profitable, and we focus on how partner community, perhaps nothing is something else for Microsoft: more like a as individual partners they can be prof- as important as the degree to which critical move for survival. itable,” Watson says. “We can’t promise Microsoft pushes partner profitability as a The go-go years of IT spending and profitability. We can promise that we’re focus within the product groups. hockey-stick revenue growth are tem- creating a partnering framework that The big job of coordinating with the porarily, and possibly permanently, in the looks at those elements so that partners product teams falls to Webb-Robins and past. “Slower revenue growth across the IT can be profitable.” her team. One of the early deliverables of industry since the blazing pace of the ’90s Helping Watson build that profitabil- this effort is the Executive Partner Guide has focused attention on bottom-line per- ity platform for partners is her team of for the Information Worker Business, a formance and the many factors, both large partner executives. Sherle Webb-Robins, glossy-paged guidebook distributed at and small, that contribute to partners’ per- previously channel chief for Sun the Worldwide Partner Conference formance,” Matthew Lawton and Stephen Microsystems Inc., is general manager and other Microsoft events. Graham, analysts for Framingham, Mass.- of the Worldwide Partner Program. Part of the goal for that guide is to based research firm IDC, wrote in a recent Todd Weatherby, an 11-year Microsoft provide broad guidance on the poten- report. “IT vendors increasingly recognize veteran who also spent time at Oracle tial size of certain markets. For exam- that the business health of their partner Corp., is general manager of partner sys- ple, the Executive Partner Guide community is critical to their success.” tems—the online resources that make identifies Information Worker as a View the profitability lifeline however Microsoft’s program scale to hundreds $148 billion business opportunity, you want. What matters is not why it’s of thousands of partner organizations. with $30 billion in partner services there but that it’s there. Over the last few Don Nelson, who came to Microsoft with revenues expected by 2007 in the years, and especially in the last 12 to 18 the acquisition of Great Plains, runs area of smart client solutions. months, Microsoft has been tying strands partner sales and readiness. Naseem Microsoft has been compiling similar together to help partners become more Tuffaha, whose experience includes a numbers across the Microsoft Partner profitable. What follows are details on dot-com stint, is senior director of ISV Program competencies related to the what Microsoft offers to help partners sales and marketing in the Worldwide new wave of products to point its part- improve profitability and a look at just how Partner Group. Marie Huwe, a longtime ners to new, profitable opportunities. practical those offerings are. Microsoft vet, handles partner market- ing. Not directly on Watson’s team, but DIRECT PROFITABILITY BUILDING A PLATFORM working closely with partners in the GUIDANCE Allison Watson, corporate vice president United States, is Robert Deshaies, vice Microsoft has taken upon itself to conduct for the Worldwide Partner Group at president of the U.S. Partner Group. or sponsor original research into the fac- 16 Redmond Channel Partner JANUARY 2007 RCPmag.com 0107rcp_F1Profit_14-22.v7 12/8/06 2:15 PM Page 17 More of Watson’s team and their roles in the profitability equation: Don Nelson (left) wants to make partner skills development less of drain on resources. Marie Huwe (right) develops campaigns to lead partners to more profitable conversations with customers. Sherle Webb-Robins (front) coordinates with Microsoft product groups to keep partner profitability opportunities in focus. Project2 11/8/06 2:55 PM Page 1 the microsoft partner program field guide to partnering Chapter No. 5 The Only Tool That Counts Is The Tool You Need. ToP Chapter ad_demoshowcase_RCP.1 1 11/6/06 3:51:18 PM Project2 11/8/06 2:56 PM Page 2 the microsoft partner program field guide to partnering Showcase your solutions and build your business. Are you equipped to demonstrate your technology solutions to customers in terms they can understand? Can you easily modify your sales presentations by customer role to showcase your business value? icrosoft® Demo Showcase for the People-Ready Business is a new toolkit that can The M in the United States and/or other countries. help you tailor technology demonstrations to your customers. That means you can shorten sales cycles, reduce sales engagement efforts, and promote your expertise as to how your solutions can address customers’ business goals. F I G . 5 . 1 SURVIVAL TIP s or trademarks of Microsoft Corporation Demonstrate your expertise to customers in a way that speaks to their business needs with the Microsoft Demo Showcase for the People-Ready Business. Showcase your solutions today. Order your free copy of the Microsoft Demo Showcase for the People-Ready Business at www.mydemoshowcase.com. © 2006 Microsoft Corporation. All rights reserved. and “Your potential. Our passion.” are either registered trademark ToP Chapter ad_demoshowcase_RCP.1 1 11/6/06 3:51:18 PM 0107rcp_F1Profit_14-22.v7 12/8/06 2:15 PM Page 20 FEATURE| Profitability tors behind partner profitability and edu- cate its channel on the results. “We’re committed to building a prof- 9 WAYS TO itability model and then benchmarks for partners by competency, and at the same time we’re going to think richly about the IMPROVE YOUR needs of the partners in those competency areas,” Watson explains. The most direct and high-profile part PROFITABILITY of that effort is a series of IDC studies that were commissioned by Microsoft. Since These tools and tips can help boost the bottom line. November 2005, IDC has published four research papers analyzing the factors that These five Microsoft tools, campaigns and programs provide opportunities determine business success among part- and advice designed to help partners raise their profitability: ners. The studies have focused so far on 1. Check out the IDC studies on the Microsoft Partner Portal for broad four Microsoft Partner Program compe- tencies : Advanced Infrastructure; relevance if your business involves networking, information worker solutions, Information Worker; Mobility; ISV/ mobility, Windows Small Business Server or software development. Software Solutions. (A related group of 2. Try Microsoft’s online self-analysis tool, also on the Partner Portal, to IDC reports in January 2005 looked at obtain a more customized look at your profitability. business opportunities around Windows Small Business Server.) 3. See whether your organization can take advantage of the Partner Skills While the mobility study examined a Plus certification programs for financial assistance in training your employees. business area with explosive revenue 4. Double-check the list of Microsoft Partner Program benefits to make sure growth, the other three competency-based that you’re getting everything possible from the program. For instance, can studies all use the business-analysis con- cept of key performance indicators (KPIs) you save time and money by using the event-planning resources or sales and to identify factors that correlate with suc- marketing collateral that Microsoft’s already developed? cess or failure. In interviews with more 5. If you have a partner account manager (PAM), take conversations with your than 1,000 VARs, systems integrators and PAM seriously. A big part of the PAMs’ focus this year is better understanding consultants in several countries, Microsoft identified KPIs for several competencies. your business and helping you become more profitable. Your PAM may also be In the ISV/Software Solutions-based able to point you to Microsoft co-marketing funds or other programs that can report, for example, IDC identified as KPIs cut your expenses. revenue growth, net profit margin, gross Following are four more strategies for increasing profitability: profit margin, cash flow from operations, customer growth, deal growth, change in 1.Focus your conversations with customers on solutions for their business market share, average deal size, sales problems rather than on product features. cycle, implementation time and revenue 2.If you’re horizontally focused, think about moving more aggressively into per employee. IDC surveyed Microsoft vertical markets where you’re especially strong. Partner Program competency holders, other Microsoft partners and partners of 3. If you’re already vertically focused, look at Microsoft’s online resources other technology companies. such as maps and spreadsheets highlighting new opportunities by geogra- The reports have all shown strong per- phy and industry sector. You may find that you can move into an adjacent formance for Microsoft competency par- vertical market, increasing your revenues without significantly raising your ticipants, so Microsoft has partly touted the reports as strong public relations for its operating expenses. program. But the company hopes that 4. Investigate opportunities around new products that build on your existing partners, many of whom have limited strengths while potentially generating new revenues. —S.B. 20 Redmond Channel Partner JANUARY 2007 0107rcp_F1Profit_14-22.v7 12/8/06 2:15 PM Page 21 resources for analyzing their own business tions like marketing and sales or event THE MYTHS OF processes, will take the KPIs to heart and planning and promotion, Microsoft use them to improve their businesses. removes costs that would otherwise PROFITABILITY In that vein, Weatherby’s team has detract from the partner’s bottom line. been turning the research into a cus- One of these areas is in the myriad In mid-2005, IDC researchers tomized online tool. “We’re taking the program resources Microsoft offers to surveyed 1,000 VARs, systems IDC profitability study and putting it its Registered Members, Certified integrators and consultants in online so that partners can do their own Partners and Gold Certified Partners. self-assessments. [It’s] self-service, in Many of these resources have a prof- the United States, United the spirit of driving profitability,” itability angle that comes from the part- Kingdom and Germany for three Weatherby says. ner costs that Microsoft eliminates or studies on Microsoft Partner “We sometimes underestimate what reduces by investing in the resource. Program competencies. [partners] can do, and we sometimes One example is the Partner Marketing Following are IDC’s broad overestimate what they can do, and how Center, with its campaign-support sophisticated they are. A big number of resources from customer-ready busi- conclusions about how partici- partners who have used this thing have ness letters to presentations to support- pants’ perceptions differed said, ‘We’re going to start using these ing documents. Others include the from reality in several key areas: kinds of KPIs to drive our business strate- Partner Channel Builder, the Microsoft gy.’ Well, I didn’t think that was the feed- Action Pack, software licenses, the GROSS MARGINS back we’d get,” Weatherby says. “It’s excit- Partner Sales and Marketing Planner Perception: High gross margins mean that ing to see how useful this has been to and the Competitive Selling Resources. a business is healthy and profitable. them, and it’s exciting to see the usage.” The marketing muscle behind Reality: A company’s gross profit margin Weatherby says that more than 700 Microsoft’s “People-Ready” campaign bears no relationship to its net profit partners have done the self-assessments brings another opportunity for partner margin or its cash flow from operations. online. profitability. By turning the focus from “Today, they get a pretty good graphi- product features to solutions to busi- SMALL DEALS cal and interesting assessment of how they ness problems or else enablement of Perception: Small deals are less stand in the industry. As we mature this business scenarios in national TV and attractive than larger deals. thing, we’re going to be able to continue to magazine advertisements, Microsoft feed the entries back,” Weatherby says. hopes to help create an environment Reality: Although companies having “With IDC coaching us on the design, they for partners to have higher profit con- larger average-deal sizes tend to perform do all the smart analytical part of it and we versations with customers—talking well, organizations with smaller do the scale and access to our channel part about solutions for business scenarios average-deal sizes can perform well if of it. We think [that’s] a pretty useful rather than product features. Huwe, they maximize their business velocity. instrument for our partners.” Weatherby with her work on Customer Campaigns adds that some sophisticated database (see “On the Campaign Trail,” October LINUX-BASED ORGANIZATIONS work remains to be done on Microsoft’s 2006), is building on that trend of Perception: Linux is more profitable side in maintaining privacy and confiden- higher-order conversations. than Windows. tiality before the online self-assessment The profitability efforts go hand in Reality: A company’s operating system tool is more dynamic and scalable. hand with Microsoft’s efforts of the last platform has little to do with its financial few years to encourage partners to take performance. Business execution is more INDIRECT PROFITABILITY on a vertical approach, where margins important. GUIDANCE can be higher and the amount of overlap There are many other Microsoft initiatives between partners in a region tends to BUSINESS FOCUS that don’t directly address profitability, decline. If everyone does networking Perception: Having a narrow focus in your but where a profitability improvement for infrastructure, every Microsoft part- business helps performance. a partner is a major potential side benefit. ner competes with every other and Reality: The best approach is diversifica- By providing tools that give partners a prices are driven down. If one partner tion in complementary practice areas— head start on business-generating func- focuses on health-care solutions, JANUARY 2007 Redmond Channel Partner 21 0107rcp_F1Profit_14-22.v7 12/8/06 2:15 PM Page 22 FEATURE| Profitability another on law firms, distinctions we’ve described around our what IDC calls a “portfolio approach” to between them become clearer and mar- growth, is how the 7,002nd part- the key aspects of operating a business. gins are preserved. ner and the 100,000th partner ... As Microsoft works to get partners to can get in and participate and CAPACITY TO FUND pursue vertical strategies, the company’s take advantage of assets to grow NEW OPPORTUNITIES partner organization has been adjusting their business in a self-serve and Perception: Access to capital is a major to tailor itself better to working with scalable way. driver of business performance. partners in many niches. “We use it as a “So we’re building out, if you Reality: What’s more important is a platform concept, so that we ask the will, a technology platform that’s company’s overall capacity to fund new questions every time, and then ideally an IT investment,” says Watson. business opportunities, drawing from we specialize it,” says Watson. “So if She adds that she views her job in all sources, including its own ability to you’re a partner in the Microsoft Business part “as being a CIO of a pretty big generate cash from operations. Solutions area focused on the food and technology platform that we build beverage industry in mid-market in and innovate on, and [I] think BUSINESS GROWTH Denmark, we can have this whole well- about it that way in terms of, ‘How Perception: Since the dot-com bust, rounded conversation with you.” does it serve this asset of partners growth has taken a back seat to cost Meanwhile, the company is pushing in a very rich way?’” reduction. skill development through programs, such Which is all well and good, but as Partner Skills Plus, a $30 million invest- can all these profitability-enhanc- Reality: Although cost management is ment to help partners defray the costs of ing efforts reach most partners? important, the top-performing compa- certification and training. Getting up to Microsoft is already address- nies are also the top growth companies. speed on the new Microsoft products at ing some challenges. For example, SOURCE: “MICROSOFT COMPETENCIES: PARTNER the cost of time rather than time and fees the high production-value PATHWAY TO BUSINESS PERFORMANCE,” IDC, FEBRUARY 2006. means more profits, Nelson says. Executive Guide turned out to be The U.S. Partner Group has already too broad to be useful for many put some of the training in place. “We’ve partners, Webb-Robins acknowl- had close to 7,300 individuals from part- edges. Future efforts will be less glossy ner organizations go through different and more targeted, she says. spreadsheets showing vertical sector types of training around marketing, busi- Another issue is the sheer size of the opportunities by sector and geography— ness management [and] solution selling. partner community: 380,000 Registered require a business to be fairly agile. They’re taking a look at how to run a prof- Members, Certified and Gold Certified In all, Microsoft’s efforts to improve itable sales organization,” says Deshaies. Partners worldwide, with estimates of partner profitability have a little something For Certified Partners and Gold more than 600,000 when you include part- for most partners. Big or aggressive part- Certified Partners, a partner account man- ners not enrolled in the program. No mat- ners looking for new opportunities can ager (PAM) might point partners to prof- ter how granular Microsoft makes its prof- find them with Microsoft’s tools. Small itability-enhancing resources. For the rest itability efforts, it’s simply not possible to partners looking to shave off some of the Microsoft Partner community, it falls account for every conceivable partner. expenses might reach that goal by cutting to the online resources, such as the Partner Some partners will slip through the their own marketing costs and using Portal, to get the word out. “In addition to categorization cracks, while others might some Microsoft templates. If you’re lucky being able to have the one-on-one conver- be consciously overlooked if their business enough to fit squarely into an IDC study sation with a partner, we say, ‘How do we models or niches don’t mesh with or find that the profitability assessment make it scale? How do we make it self-serv- Microsoft’s strategic goals. In a program of tool is fairly robust around your circum- ice?’ so that for between let’s say 5,000 hundreds of thousands of partners, the stances, the payoff could be huge in terms [and] 6,000 partners around the world, profitability tools won’t mean much to a of improved business processes and a which is as big as anyone else’s partner fairly broad swath. Meanwhile, for those new way of looking at your business. • channel in the world, we do have one-on- who don’t register, access to many of the one conversations with partners about profitability-enhancing program Scott Bekker ([email protected]) is this and their business,” Watson says. resources is off-limits. Even for those who the editor in chief of Redmond Channel “Our opportunity, because of what are registered, some of the tools—such as Partner magazine. 22 Redmond Channel Partner JANUARY 2007 RCPmag.com Project2 12/11/06 11:01 AM Page 1 0107rcp_F2ThirdParty_24-29.v8 12/8/062:47PMPage24 C the constant andsometimes constant the strategies, partners canmaximize strategies, partners 4Redmond ChannelPartner 24 profitability o disruptive force of n JANUARY 2007 With s RCPmag.com o l a few key i d by leveraging Vendor a t i o By LeePender n ILLUSTRATION BY AMY PATACCHIOLA 0107rcp_F2ThirdParty_24-29.v8 12/8/06 2:47 PM Page 25 RCPmag.com JANUARY 2007 Redmond Channel Partner 25 0107rcp_F2ThirdParty_24-29.v8 12/8/06 2:47 PM Page 26 FEATURE| Consolidation erger mania” is back, and dent of the Canadian branch of the International Association of partners had better be Microsoft Certified Partners (IAMCP) and COO of Perth, Scotland- ready for it. based Kit Software Ltd., a Gold Certified Partner and provider of In the late 1990s, the software and services for commodities trade management. dot-com boom was the “Consolidation really isn’t anything new,” says Stephen setting for a frenzy Graham, group vice president of global software business of corporate mergers strategies at IDC, the Framingham, Mass.-based analyst firm. and acquisitions. In “There has been consolidation in the software industry. We had fact, the total volume in dollars of acquisitions in 2000 was higher consolidation through different parts of systems management than that of any other year in history—until 2006. On Nov. 21, The and collaboration. There will likely be some consolidation Associated Press reported figures from Dealogic, a financial-soft- around content management providers, where there are a lot of ware firm that tracks and analyzes capital markets. The numbers smaller players in the market.” were clear: By November, the total value of announced acquisi- Large vendors such as Microsoft control the ebb and flow of tions had reached $3.46 trillion for the year, eclipsing the record M&A activity. Graham points out that Microsoft and three competi- total of $3.33 trillion set in 2000. It seems that after taking a few tors, Oracle Corp., SAP AG and IBM Corp., have established them- years off to absorb the impact of the dot-com bust, corporations in selves as the mainstays of the software industry (see “Microsoft a wide range of industries are once again hunting for deals. Munches on Minnows; Oracle Hooks the Big Fish,” p. 27). “If you’re The technology industry is no exception. New York-based ana- in the software business, it’s likely that your business involves one of lyst firm The 451 Group reported in March that merger and acquisi- those four,” he says. “The barrier to entry for service providers is considerably lower vs. [that of] traditional VARs. Service providers will get a lift from [consolidation] and the traditional VARs will be hurt by [it].” —Mike Harvath, President and CEO, Revenue Rocket Consulting Group tion spending in the technology industry rose 67 percent in the first With mergers and acquisitions back on corporate agendas and a quarter of 2006 compared to that of the first quarter of 2005. And in cadre of large vendors gobbling up smaller ones, partners need to 2005 as a whole, technology companies spent $339 billion on know how to reshape their strategies to maximize profitability in a mergers and acquisitions—62 percent more than they spent in new era of consolidation. Developing a services business and tar- 2004. M&A fever in 2006 was perhaps most apparent in Google’s geting vertical industries are critical moves partners should make much-discussed $1.65 billion purchase of the popular upstart video now. They should also take a hard look at focusing exclusively on Web site, YouTube Inc. Other big deals dotted the landscape in 2006 selling Microsoft technology. as well, including Advanced Micro Devices Inc.’s $5.4 billion acqui- sition of ATI Technologies Inc. Consolidation, of course, is normal in any industry and has cer- FOLLOW THE SHIFT TO SERVICES tainly been a part of the technology community’s history. “The soft- Although the word can invoke fear for some industry observers, ware industry is maturing, and it’s maturing a lot like consumer consolidation isn’t necessarily a bad thing. Large vendors can use product goods or other industries,” says Dawson Lane, past presi- their marketing prowess to increase adoption of the technologies 26 Redmond Channel Partner JANUARY 2007 RCPmag.com 0107rcp_F2ThirdParty_24-29.v8 12/8/06 2:47 PM Page 27 MICROSOFT MUNCHES ON MINNOWS; ORACLE HOOKS THE BIG FISH they buy in acquisitions, giving their partners greater opportunities MICROSOFT HAS A REPUTATIONindustry-wide for being an to sell and service those technologies, says Albert S. Bitton, manag- acquisition-hungry monolith, but, in fact, the company is more likely to ing director of PartnerWise, a Montréal-based consultancy and snap up small firms rather than bigger competitors. Registered Member. It was, after all, IBM Corp. that snagged Lotus Development Corp. for “[Consolidation] is a good thing because it enables technology $3.5 billon back in 1995 and then, seven years later, bought to be mass-marketed by a great sales and marketing company,” PricewaterhouseCoopers LLP’s consulting operation for the same Bitton says. “Much like a lot of businesses, ideas are a dime a dozen. price—a figure IBM restated to $3.9 billion in 2003. It’s different when you put them in the hands of an Oracle, a And Oracle Corp. made waves when it swallowed fellow enterprise Microsoft, an SAP that can deliver them to the masses.” resource planning vendor PeopleSoft Inc. for $10.5 billion in 2005. From For some traditional resellers, though, consolidation leads to then through November 2006, Oracle made 26 “strategic” acquisitions, big problems. For those VARs and resellers that derive revenue less according to the company’s Web site. Over that same time period, IBM from providing services and more from margins earned on straight bought 18 companies. software sales, fewer vendors with applications in the market Microsoft, for its part, made 17 acquisitions, none of which means fewer products to offer customers. That leads to commoditi- approached the volume of the Oracle-PeopleSoft buyout. The compa- zation of the applications partners are selling, experts say. And com- ny’s March 2005 purchase of Groove Networks Inc., which brought Bill moditization leads to lower prices, which leads to shrinking mar- Gates’ replacement as chief software architect, Ray Ozzie, to Redmond, gins and lower profits. cost just $120 million. And Microsoft’s 2000 purchase of ERP vendor “The reseller model is definitely going to have problems,” says Ted Dinsmore, partner at New Haven, Conn.-based consul- Great Plains Software Inc. was a $1.1 billion deal, a small price tag tancy Exertus Partners LLC, and co-author (with Edward compared to Oracle’s PeopleSoft move. O’Connor) of “Partnering with Microsoft: How to Make Money in In 2006 (through November), Microsoft bought Colloquis Inc., a Trusted Partnership with the Global Software Powerhouse” provider of online business applications that feature natural language- (CMP Books, 2005). processing technology; Azyxxi, a software package for the health-care “I would not like to work for [a traditional reseller], for sure,” industry; Winternals Software LP, a vendor of system recovery and data says Petri Salonen, president of the Dallas chapter of the IAMCP and protection applications; Softricity Inc., a provider of virtualization founder and CEO of Tellus International Inc., a consultancy and technologies; Whale Communications Ltd., which makes firewalls for Registered Member based in Trophy Club, Texas. “The only thing VPNs and Web applications; Massive Inc., creator of a network for video that you can [use to] separate yourself from each other is the price.” game advertising; Lionhead Studios, a video game developer; ProClarity And it’s critical for partners to differentiate themselves based Corp., a provider of BIapplications; Apptimum Inc., which makes a utility on more than just price, Dinsmore says. Traditional resellers have that transfers applications to new computers; Onfolio Inc., an Internet to forge relationships with vendors and customers that go beyond research and information management company; and MotionBridge, a the classic sales relationships of the past, Dinsmore says. That provider of search technology. —L.P. means putting people in place—sometimes at considerable cost— to develop one-on-one relationships with key contacts. “Relationship-based reselling seems to be the only way to meet margin,” Dinsmore says. “Put people in place on the ground so that than traditional resellers can. And for service providers, consoli- [you] have relationships with customers and relationships with dation can actually lower costs and lead to increased profitability, vendors. The resellers that seem to be surviving are the ones that Dinsmore says. have feet on the street and still keep a good margin.” “I have to certify my people in each of those ISVs’ [certifica- More and more VARs and resellers, experts say, are reacting tion programs],” he says. “If I have fewer products to deal with, I to consolidation by transforming their businesses to focus not have fewer hurdles in getting my people billable. It’s an advan- just on pure software sales, but also on providing services—such tage to a Microsoft partner to have this consolidation happen.” as implementations, maintenance or even application hosting— “The barrier to entry for service providers is considerably for their clients. Service providers, experts agree, can differenti- lower vs. [that of] traditional VARs,” echoes Mike Harvath, presi- ate their offerings and demonstrate value to clients more easily dent and CEO of Bloomington, Minn.-based consultancy RCPmag.com JANUARY 2007 Redmond Channel Partner 27 0107rcp_F2ThirdParty_24-29.v8 12/8/06 2:47 PM Page 28 FEATURE| Consolidation MICROSOFT AND MICRO-VERTICALS: THE EPARTNERS STRATEGY Revenue Rocket Consulting Group, a Registered Member. IN FEBRUARY 2006, ePartners Inc., a Gold Certified Partner and “Service providers will get a lift from [consolidation] and the tra- service provider based in Irving, Texas, unveiled a new strategy. The ditional VARs will be hurt by [it]. The small solution providers, if company shifted from a generalist approach to a vertical approach, a big portion of their revenue comes from reselling, are going focusing on “micro-verticals” in the health-care, government and away. Most of those companies have been successful in reinvent- manufacturing sectors. In doing so, it became a living example of a ing their businesses as service providers.” partner company going vertical to maximize profitability. So far, the new strategy is working. “Financially, we’re adding some very nice numbers,” says Bill CARVE OUT A NICHE Anderson, ePartners’ vice president of product marketing. Just focusing on providing services, though, isn’t enough to But there’s more to ePartners’ vertical strategy than just the ensure a boost in profitability. Another critical strategic move that customized services and applications it provides to partners in its partners should make is to focus on serving vertical or even three targeted industries. First of all, the company didn’t ditch clients micro-vertical markets, partners and analysts agree (see that weren’t part of its new target audience. “Microsoft and Micro-Verticals: The ePartners Strategy,” this “We haven’t gotten out of the business of selling and servicing page). The approach has worked for companies in other markets, clients that come to us,” Anderson says. “They still make up most of PartnerWise’s Bitton says. our business. It wasn’t about saying 100 percent of our new sales will “If you take a look at the hardware industry, it’s a bit more be from just a couple of verticals.” advanced than the software industry,” he says. “The same thing that But, he says, it was about developing a portfolio of services and applications based on the Microsoft Dynamics ERP platform that occurred in the hardware industry is happening in software. Those ePartners, which deals exclusively with Microsoft technology, could who do well provide a solution stack around a specific problem that use again and again with companies in the same vertical niches. one of their industry customers has. Focus on a niche market Having that “repeatability” with its offerings, Anderson says, has because Microsoft does not focus on niche markets. They build gen- allowed it to improve sales cycles, lower costs and perform imple- eral software and they rely on partners to build industry solutions mentations faster. around it.” Those niches are micro-verticals, much more specific than simply “We’re in an economy of niches today; that’s supported “manufacturing” or “health care.” The company has, for instance, economy-wide,” Harvath says. “If you’re going to be a regional experienced success with its semiconductor and industrial-equip- generalist, the market will put pressure on your ability to run ment offerings, and with a program for community hospitals, that business successfully.” Anderson says. Deciding which vertical markets to attack can be as simple as “The buying patterns of a community hospital are very different a partner focusing on the industries in which it tends to have the from that of managed care,” he says, adding that the manufacturing most internal expertise and success with customers. But the industry offers similar stratification. “It’s very difficult to differentiate process of making the transition from generalist to vertical spe- yourself as a provider based on the fact that you sell to manufacturing cialist isn’t always so simple, Harvath says. companies. Anybody who knows something about manufacturing Partners need to ask themselves, “‘How do we transform what knows that there’s a difference between process manufacturers and we do into product-type services—packaging services in a fixed- discreet manufacturers. Some people think that’s a big enough delin- fee, fixed-scope way?’ It’s very important that resellers do that,” eation, but it’s not. You don’t want to go so tight that you’ve only got he says. “Otherwise, they can’t translate that into something their 12 clients to serve nationally, but you don’t want to be so loose that sales force can sell.” That process, Harvath says, usually takes at you’re not relevant to that market.” least two years and involves major shifts in marketing strategy as Anderson says that ePartners’ strategy has allowed the company well as staff changes to adjust for industry expertise. to focus its marketing on its chosen micro-verticals and make a name for itself quickly in those markets. He also says that the company is using its success in some micro-verticals to move into others. PONDER THE ALL-MICROSOFT MODEL “We’ve got different markets that we’re selling into reactively. Developing a services component and zeroing in on vertical mar- Success in one segment brings opportunity in other segments. The kets are virtually ironclad tactics that partners should follow in strategy has worked very well for us.” —L.P. 28 Redmond Channel Partner JANUARY 2007 RCPmag.com 0107rcp_F2ThirdParty_24-29.v8 12/8/06 2:57 PM Page 29 Partners should base their decisions of whether to go all-Microsoft and how many products to support on the most important factor of all— what their customers want. order to maximize profitability in reaction to consolidation. A However, Graham warns, “You can become extremely focused third component of consolidation strategy, though—dealing to your detriment.” exclusively with Microsoft technology and deriving all or almost A February 2006 IDC study co-authored by Graham and all revenue from Microsoft-related sales and services—might be titled “Microsoft Competencies: Partner Pathway to Business less of a sure thing for some partners. But, as Microsoft continues Performance,” reported that “companies that build and base their to grow and strengthen its market positions through acquisitions, business on one vertical industry, one solution offering and one partners should consider scaling down or ending relationships technology tend to perform worse than companies that support with third-party vendors. more than one of each.” (See “The Myths of Profitability,” p. 21.) “We think partners can be more profitable if they’re more com- And, ultimately, partners should base their decisions of whether mitted to a vendor,” says Sherle Webb-Robins, general manager of to go all-Microsoft and how many products to support on the most the Microsoft Partner Program. “Partners are getting very focused important factor of all—what their customers want. While the all- on what they do very well. Customers are not looking for every- Microsoft model might be best for some partners, it might not work thing being completely separate—they’re now wanting integrated for others, Bitton says. solutions. Partners are realizing they cannot maximize their prof- “I come across many companies that focus on accounting solu- itability or their opportunities if they’re doing too many things.” tions,” he says. “Each of their partners wants them to focus exclu- On that point, there is little disagreement. Partners that spread sively on its products. [The partners] tell me that’s not what their themselves too thin working with too many vendors will eventually customers want. Vendors want [partners] to focus on one vendor, put a dent in their profitability, IDC’s Graham says. but clients aren’t letting them do that. That’s what the market dic- “If you hedge your bets with lots of third-party products and you tates, and I don’t think that’ll go away.” try to spread the wealth, there’s a basic overhead that’s needed to maintain several partnerships, and at some point it’s going to cost you,” he says. KEEP UP WITH THE PACE OF CHANGE Tellus’s Salonen adds that Microsoft rewards those partners Consolidation can be unpredictable. New companies with new that it considers committed to the company, meaning Microsoft- technologies are constantly entering the market, making them- focused partners are likely to be more profitable than those that selves attractive targets for larger vendors. And, every now and work with Microsoft and a host of third-party vendors. then, an acquisition such as Oracle’s 2005 buyout of PeopleSoft Inc. “I would be tempted to say definitely [that partners] are more or Hewlett-Packard Co.’s 2002 purchase of Compaq Computer profitable if they are dedicated Microsoft partners,” Salonen says. Corp. shakes up the industry. “Microsoft people are all humans. When they see that [partners] As such, while partners should focus on the basics of providing live and die with the product that they have, they are more tempted services and targeting vertical markets, they should also keep their to give [partners] leads, to help them out.” business strategies flexible. Some experts recommend that partners focus not only on “If you’re a prospering and growing services company, you Microsoft technologies but also on subsets of Microsoft’s offer- need to be reinventing your business model every 18 months,” ings, such as unified communications or the Dynamics suite of Harvath says. “If you haven’t changed your model, you’ll go out of business applications. business. The challenge is really to have enough focus and insight “If a company focuses on a narrow enough sliver of the to reinvent your business.” • Microsoft suite, that’s a pretty good strategy,” Harvath says. “If you take it to the extreme, and you’ve got a guy that only focuses on one Lee Pender ([email protected]) is senior editor of Redmond toolset and only a limited set of markets where [he’s] an expert, Channel Partner and author of the twice-weekly e-mail newsletter that’s the guy who makes the most money.” Redmond Channel Partner Update. RCPmag.com JANUARY 2007 Redmond Channel Partner 29 Project1 12/7/06 10:40 AM Page 1 0107rcp_F2Vertical_31-36.v7 12/8/06 3:30 PM Page 31 E R T I C A MarketsL In this series, Redmond Channel Partner takes a deep dive into specific vertical markets. Each installment examines one industry’s IT spending trends, describes Microsoft’s product strategies for customers in that field and explains how Microsoft partners can best position themselves to compete and win new business there. This month, we cover the pros and cons of serving professional services companies such as law practices, accounting firms and consultancies. RCPmag.com JANUARY 2007 Redmond Channel Partner 31 0107rcp_F2Vertical_31-36.v7 12/8/06 3:30 PM Page 32 FEATURE| Professional Services “There’s a huge pent-up demand in the legal space right now.” Whit McIsaac, President and CEO of Client Profiles Inc. GO |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||| Technology spending in the professional services industry is on the rise. Here’s how Microsoft partners can get in on the action. PROBy Rich Freeman ! In theory, selling technology toprofessional services firms ought to be an easy fit for channel partners. After all, most partners play the service role themselves. “It’s what we do. We’re professional services organizations for technology,” says Arnie Bellini, presi- dent of ConnectWise Inc., a Gold Certified maker of professional services automation systems headquartered in Tampa, Fla. In reality, however, many partners discover the hard way that serving the professional services industry isn’t for the faint of heart. “It’s a high-fallout market,” says Whit McIsaac, president and CEO of Gold Certified Partner Client Profiles Inc., an Atlanta, Ga.-based vendor of customer relationship management (CRM) software for the legal industry. “A lot of partners look at it and see a lot of money, but if you’re not prepared for it, it’s tough.” 32 Redmond Channel Partner JANUARY 2007 RCPmag.com 0107rcp_F2Vertical_31-36.v7 12/8/06 3:30 PM Page 33 Because profes- sional services Generally, professional services firms— industry research and analysis firm a category that encompasses everything IBISWorld Inc. “It just can’t keep going at firms specialize from legal practices and auditors to con- that pace,” says Buczynski, who estimates sultancies and engineering houses—are the 2006 growth rate for legal revenues at in meeting relative laggards technologically, rarely 2 percent, versus 3.9 percent in 2005. employing disciplined IT budgets or set- Meanwhile, the proliferation of “bou- ting long-term plans. Cautious by nature, tique” law firms with expertise in intellec- customer needs they take their sweet time about decision tual property, medical malpractice and making. And because they specialize in other legal specialties is driving height- themselves, they meeting customer needs themselves, they ened competition for clients. That, in turn, can be especially demanding clients. is changing customer defections from rari- can be especially “They’ll tell you how well they serve their ties to common occurrences. “There’s not a customers and [that] if you’re not able to whole lot of brand loyalty” to law firms demanding clients. do that for them, you have no business today, says Tom O’Connor, co-author with talking to them,” says Bellini. Richard L. Robbins of “The Automated tion even more than midsize ones do. Still, while working with professional Law Firm: A Complete Guide to Software Looking to broaden their pool of potential services firms can take some adjustment, and Systems” (Aspen Law & Business Pub- consulting providers, many clients are the rewards can be worthwhile for lishers, 1996) and a consultant on comput- breaking big projects into smaller chunks. partners willing to make the effort erized litigation support systems. “Ten “In many cases, the midsize firms are bet- (see “Opportunities Everywhere,” p. 34). years ago, you could count on long-term ter able to be nimble and put their ‘A’ team Among the industries that Microsoft tar- relationships. That’s not the case now.” on a project that might be below the sweet gets, professional services ranks fifth in IT Increased competition is roiling the spot for a large firm,” Scheer notes. outlays and has the highest IT spending consulting and accounting fields as well. Medium-sized firms are doing better growth rate. Eager to grab a piece of that In consulting, firms have finally recovered than their larger peers in the accounting rapidly expanding pie? The key, say part- from a severe downturn earlier in the segment too. The “Big Four” accounting ners and industry experts, is knowing decade that cost roughly 100,000 consult- firms controlled less than 25 percent of where an industry that only recently began taking high tech seriously is spending its money—and why it’s doing so. THE U.S. PROFESSIONAL SERVICES INDUSTRY LEGAL* CONSULTING ACCOUNTING COMPETITIVE FORCES Revenue (in millions) $224,821 $113,702 $105,729 Revenue Growth 3.9% 3.2% 4.0% Companies that sell to professional services Number of Establishments 402,368 632,360 459,379 firms subdivide the industry in varying Employment (in millions) 1.37 1.13 1.94 ways, but most list legal, management SOURCE: IBISWORLD INC. consulting and accounting firms as the *ALL FIGURES ARE FROM 2005, THE MOST RECENT DATA AVAILABLE top segments. Though the particulars dif- fer, all three verticals now find themselves confronting new and intensifying busi- ants worldwide their jobs, according to U.S. market share in 2005, according to ness challenges. Jess Scheer, a senior research analyst IBISWorld, which expects that figure to In the legal segment, the largest pro- at Kennedy Information Inc., a Peter- continue declining slowly in future years fessional services vertical by revenue (see borough, N.H.-based consulting and mar- as clients take more of their business to “The U.S. Professional Services Industry” ket analysis company. But now low-cost smaller players. As mid-tier practices table, this page), the slackening pace of competitors in Asia and elsewhere are become more competitive, accounting corporate mergers and acquisitions is put- pressuring other firms everywhere to firms long used to bidding aggressively for ting the brakes on growth. M&A activity reduce their fees. “So what’s happening is, audit work are facing continued battles on has been responsible for as much as a third firms are having to work 10 percent more the pricing front. Moreover, with the of the legal industry’s business in recent to make the same money,” Scheer observes. Sarbanes-Oxley Act of 2002 and other years, according to Rick Buczynski, a sen- Ironically, he continues, larger firms are regulations raising the requirements for PHOTO BYPHOTO KAADY STAN ior vice president at New York City-based feeling the impact of heightened competi- financial accuracy, jittery corporate clients RCPmag.com JANUARY 2007 Redmond Channel Partner 33 0107rcp_F2Vertical_31-36.v7 12/8/06 3:30 PM Page 34 FEATURE| Professional Services are now weighing accounting vendors on OPPORTUNITY EVERYWHERE service quality as well as price. All those competitive forces have pro- Intensifying competition and years of underinvestment fessional services firms looking to technol- in technology are fueling heightened demand for portals, ogy for help in boosting operating efficien- practice management applications, CRM systems and cies and customer retention rates. For the mobility solutions in the professional services industry. legal industry in particular, that’s a signifi- Here are some additional revenue opportunities cited by cant departure from tradition. “Law firms have always lagged behind corporate partners, industry experts and Microsoft: America from the technology standpoint,” Security solutions. Lawyers, CPAs and consultants need help from partners McIsaac observes. Acutely aware that with products designed for shielding confidential documents from prying eyes. every dollar they spend on IT comes directly Don’t be surprised, though, if smaller firms in particular initially balk at the price tag. out of their year-end partnership payouts, “They often don’t want to foot the bill to really do security the right way,” warns lawyers have historically resisted any Arnie Bellini, president of ConnectWise Inc. automation investment they can’t charge Corporate solutions. “The interesting thing about professional services is back to a client. As a result, many practices that there’s typically a counterpart department in all the other industries,” have only recently begun deploying tech- notes Norm Thomas, director of partner business development for Microsoft’s nologies their customers have been using Professional Services Industry Solutions group. For partners, that means almost for years. “There’s a huge pent up demand anything law firms and accounting practices buy holds potential appeal for in the legal space right now,” McIsaac says. corporate legal and finance organizations too, opening up a wide range of new markets to their products and services. Business intelligence solutions. Overseas competitors are bringing rapid INFORMATION change to the consulting world, leaving practice managers on unsettled ground. AND CONVENIENCE “Firms are struggling with basic benchmarking,” says senior research analyst Jess Other partners are seeing and profiting Scheer of analyst firm Kennedy Information Inc. “How do you know if you’re having from the same kinds of patterns. “We’re a good year or a bad year?” Partners can help consultancies answer such questions very busy,” says Howard Cohen, president by equipping them with business intelligence systems. and COO of LAN Associates Inc., a Central Team workplace solutions. Professional services firms typically generate Islip, N.Y.-based network systems integra- massive amounts of documents, spreadsheets and other files. Team workspace tor and Gold Certified Partner that works solutions based on SharePoint and Windows Vista can help firms find and share extensively with legal practices. “Our information more easily. “The ability to collaborate is really predicated on having clients are trying to get a lot of infrastruc- ture issues resolved now.” immediate access to prior work or work done by others,” Thomas observes. —R.F. Firms are beginning to shell out cash for business applications, too. CRM sys- tems, for example, are emerging as an increasingly lucrative partner oppor- Of course, with cutthroat competition services clients, to help them increase cus- tunity. Professional service providers, of now the norm in the professional services tomer loyalty. Such systems give clients course, live and die by relationships. world, retaining clients is often even anytime-anywhere access to key files, “CRM [software] allows them to capitalize harder than acquiring them. That’s a billing information and status reports. on those relationships. It allows them to potentially expensive problem, because “They allow [firms] to interact with their manage those relationships. It allows statistics from customer satisfaction clients on the Internet and provide tremen- them to leverage those relationships, research firm TARP Worldwide, of dous amounts of information and conven- which is huge,” McIsaac says. It also keeps Arlington, Va., hold that it costs businesses ience,” Bellini says. valuable client information from walking anywhere from two to 20 times more to Phillip Hampton, president of out the door with retiring partners, and attain new customers than to maintain LogicForce Consulting LLC, a Nashville, helps firms more easily manage the busi- existing ones. According to Bellini, many Tenn.-based Certified Partner that pro- ness development campaigns they increas- partners are using SharePoint to build vides IT consulting services to law firms, ingly rely on to attract new customers. portal solutions for their professional sees practice-management software as 34 Redmond Channel Partner JANUARY 2007 RCPmag.com 0107rcp_F2Vertical_31-36.v7 12/8/06 3:36 PM Page 35 Howard Cohen, president and COO of LAN Associates Inc., expects to earn consulting fees over the next year advising customers on upgrade timing, and then to generate additional income later performing the actual installations. another budding opportunity. Practice- Hampton, too, is cautiously upbeat: “We an industry technology vision built management applications help firms bet- certainly are hoping to ride the Microsoft around Vista, Office 2007, SharePoint, ter manage their projects, documents and Vista wave and we anticipate [customer] SQL Server and real-time communi- people. They also typically provide func- uptake.” (For more sales advice, see “Sales cation technologies such as Office tionality for tracking billable hours and Tips from Pro Services Pros,” this page.) Communicator. Together, the company maximizing utilization rates. Those are So does Microsoft. “This is a really great argues, those products can help profes- key concerns for professional service wave of products,” says Norm Thomas, sional service providers address three providers because time is the only inventory director of partner business development in broad imperatives: they stock—and, as Bellini notes, it’s highly Microsoft’s Professional Services Industry ■ Service-delivery management perishable: “If a day goes by and you’ve Solutions group. Looking to drum up (streamlining operational processes) billed six out of eight hours, those two excitement among professional services ■ Practice-performance management hours you didn’t bill are gone forever.” firms, Microsoft is aggressively promoting (boosting revenue and margins) Smartphone and PDA-based systems offering remote access to e-mail, business applications and the Web are also selling well, many partners report. “Attorneys are like any other road warriors. Most of their SALES TIPS FROM work takes place in the field, so they need all their tools available to them,” says Cohen, of PRO SERVICES PROS LAN Associates. Law-practice directors sometimes struggle to see the potential ben- SELLING TO PROFESSIONAL SERVICESfirms takes a delicate touch. efits of investing in CRM or a portal, but few Lawyers, accountants and consultants act as trusted advisors to their clients are likely to have trouble understanding the and want technology partners to do the same for them. Consequently, blatant ROI of a mobility solution. “Attorneys are all product pitches are a major turnoff. about their perks and their comfort,” says “Nobody likes to be sold, and those of us in the professional services [indus- Hampton. “Anything that makes their lives try] don’t do a lot of selling. It’s really about counseling our clients,” notes Howard easier and allows them more flexibility in Cohen, president and COO of LAN Associates Inc. Phillip Hampton, president of terms of scheduling is an easy sell.” LogicForce Consulting LLC, agrees. His firm uses technology seminars structured Partners are more guarded about to resemble continuing legal-education courses in place of conventional sales pre- prospects for selling Office 2007 and sentations. “We’ve been told that approach is a lot more palatable than someone Windows Vista to professional service coming in and trying to sell them a product,” Hampton says. providers. Such firms, they point out, are Arnie Bellini, president of ConnectWise Inc., encourages salespeople look rarely early adopters of Microsoft’s latest in the mirror before calling on a client. “Just pretend you’re selling to yourself,” releases. Just the same, Cohen expects to he says; after all, you’re in professional services too. “The needs and require- earn consulting fees over the next year ments you have are going to be very similar to those of a CPA firm or a law firm,” advising customers on upgrade timing, he observes. —R.F. and then to generate additional income later performing the actual installations. RCPmag.com JANUARY 2007 Redmond Channel Partner 35 0107rcp_F2Vertical_31-36.v7 12/8/06 3:36 PM Page 36 FEATURE| Professional Services With the Sarbanes-Oxley Act and other regulations raising the requirements for financial accuracy, jittery corporate clients are now weighing accounting vendors on service quality as well as price. ■ Client-experience management professional services firms use them- ple, Client Profiles added functionality that (improving customer satisfaction and selves, such as case management or docu- searches client data for potential conflicts retention) ment management. “We’re constantly of interest, and a “matter integration” fea- That’s a compelling story, in Cohen’s translating,” Wolf says. ture that tracks connections between peo- view. “The fundamental strategy of weav- Microsoft’s efforts to build a robust ple, companies and legal matters, such as ing together Office, SharePoint and the professional services partner channel are testimony and judicial rulings. Microsoft Internet is huge,” he says. “If we do the right generating similarly mixed responses. contributed vital development and go-to- job of teaching our clients how to take LogicForce, for one, makes regular use of market funding to the project. “It allowed advantage of that, it can occupy us for years Microsoft’s industry-specific brochures, us to get into a new market without the to come—and be incredibly beneficial to direct-mail templates and other marketing degree of risk we would have had if we our clients.” According to Microsoft, pro- resources (available in the Partner Vertical were going all alone,” McIsaac says. fessional services firms are giving the soft- Resource Center, in the Sales and Marketing Thomas advises firms looking for simi- ware giant’s strategy high marks, too. section of Microsoft’s partner Web site). lar support from Microsoft to get behind its “We’ve found customers taking it up whole- “They’re very helpful,” Hampton says of latest product releases. Key offerings cur- heartedly,” Thomas says. those tools. Just the same, he continues, rently on Microsoft’s radar include Office However, at least one partner execu- Microsoft’s collateral rarely displays the 2007, Windows Vista, the BI features of tive disagrees with that assessment based deep vertical expertise that LogicForce’s SQL Server 2005 and Business Scorecard on what he’s seen happen when Microsoft legal customers look for in a technology Manager, Thomas adds. presents at legal-industry trade shows. vendor. “What would be really nice is hav- O’Connor, the legal industry consult- “People will get up and walk out simply ing some marketing material geared to the ant and author, discourages vendors from because it becomes obvious that Microsoft legal market,” he says. “What we’ve seen so fixating excessively on platform decisions doesn’t understand what law firms are far has been kind of generic.” and marketing strategies. If you’re sup- looking for,” says Jeff Wolf, vice president You won’t hear any complaints about porting professional services practices, he of product management and marketing for Microsoft from Client Profiles’ McIsaac, says, you have responsibilities that go far Canton, Mass.-based XMLAW Inc., a Gold however. Looking to fill a gap in its lineup of beyond the bottom line: “[Legal] technol- Certified vendor of portal solutions for law professional services partner solutions, ogy is important because what attorneys firms. The concepts Microsoft discusses Microsoft recently helped Client Profiles do is important to society as a whole.” By are sound, Wolf emphasizes, but legal- adapt Dynamics CRM for the legal market. extension, one might add, accounting practice directors have trouble connecting “We took the Microsoft CRM application, practices play a vital role in keeping the with unfamiliar phrases such as “service- changed all their terminology and nomen- wheels of commerce grinding and confi- delivery management.” As a result, XMLAW’s clature, stripped out the stuff that law firms dence in the stock market high. That’s what salespeople and marketers often have to don’t use and added a bunch of stuff that law makes working with professional services rearticulate Microsoft’s strategy in terms firms do need,” McIsaac explains. For exam- firms so different, OConnor argues: “It matters that we get this stuff right.” • Get More Online Visit RCPmag.com and follow our links to the Microsoft Partner Vertical Resource Center, a summary Rich Freeman ([email protected]) of Microsoft’s professional services industry vision and information about acquiring industry is a Seattle, Wash.-based freelance writer research from IBISWorld Inc. FindIT code: ProServices who specializes in business and technology. 36 Redmond Channel Partner JANUARY 2007 RCPmag.com 0107rcp_BP_37-40.v7 12/8/06 3:53 PM Page 37 FEATURE | THE EIGHTH INSTALLMENT IN OUR SERIES ON MANAGEMENT BEST PRACTICES Caught in the Crossfire of Internal Politics Fed up with your client’s in-house turf wars? This advice from the trenches will help you survive even the toughest of battles. By Fred Bayles Some years ago, Kevin Fream was hired to set up an inventory system in a client company’s warehouse. The job went smoothly from the initial planning phase through installation. Top managers met with Fream and signed off on the system design, the hardware and the software. Then came the day of implementation, when Fream learned that the company’s ware- house workers knew nothing about the new system and were clearly unhappy about the change. Old tensions between the warehouse division and the central office surfaced, making Fream’s job more difficult. “The top officers spent a lot of time putting the system in and never told the employees any- thing,” recalls Fream, now the president of Matrixforce Corp., a Tulsa, Okla., management serv- ices consulting firm and a Gold Certified Partner. “The employees got their backs up over the ILLUSTRATION BYILLUSTRATION DWIGHT ALLOT RCPmag.com JANUARY 2007 Redmond Channel Partner 37 0107rcp_BP_37-40.v7 12/8/06 3:53 PM Page 38 FEATURE| Internal Politics 7 TIPS FOR new steps they had to do. They were resentful of the management and saw this as more work.” TRIUMPHING Fream learned from that experience. These days, Matrixforce has a manual that provides step- OVER INTERNAL by-step procedures intended to ensure that key people on every level of a client’s organizational POLITICS chart are informed about and aligned with a new project before the first server is bought or the first line of code is written. When it comes to dealing with a client’s internal “Right after the project is signed off by manage- intrigues, you might well find a tome on sociology ment, we have a copy of an announcement about or social anthropology more useful than a business the project sitting on everyone’s desk,” Fream says. book. Humans are by nature political animals and “Our average contact list has most of the employees, not just the top people. It helps tremendously.” nowhere is that more evident than in the business Understanding and navigating a client compa- world’s offices and boardrooms. But before you go ny’s tricky political and organizational topography for a Ph.D. in anthropology, try these steps: can be one of the biggest challenges faced by con- sultant and vendor firms. 1. Remember that surveillance starts with sales. Your first scouts into a Within your customer’s hierarchy there often new client’s culture should be your salespeople. Sure, they’re eager to lurks a dangerous minefield of personality and close their deals, but before doing so, they should find out as much as power struggles. The manager of the sales division possible about each client’s hierarchy, determining who’s got the author- who brought you in might be enthusiastic about ity to sign contracts and—more importantly—who signs the checks. your plans; the head of security might be opposed. 2. Know the client’s organizational chart.The person who brings you The CIO and CFO may turn your proposal into a cor- into a new customer business may not be the one you will be dealing with porate civil war, leaving you in the middle of no as the project progresses. You not only need to know all the players man’s land. Such organization quarrels can lead to involved with your project, you must understand their roles and where they rank in terms of power. delays, often with the costs borne by you. Worse yet, you can find yourself out of a contract after 3. Steer clear of trouble. Finding out where feuds are raging can help you spending time and money on the project simply avoid getting embroiled in them. Use your own personnel to scope out the rivalries and the alliances. Debrief often and share that information because you were aligned with the wrong side. with your staff. Such problems are made even worse in these days of mergers and acquisitions, when growing 4. Meet regularly with different factions.The more client contacts you know—and the more who know you—the more likely you are to avoid ugly companies often have offices and divisions located surprises late in the game. Chatting up a few folks can help you under- all over the map. stand, for instance, how long-standing tension between two key players “It’s a challenge for all of us,” says Judy Thomas, might affect your project. COO of The TM Group Inc., a Farmington Hills, 5. Develop and disseminate project procedures.Do this for clients as Mich., Gold Certified Partner focusing on the well as your own staff. This is particularly essential in environments Dynamics line. “There’s usually a political structure where departmental jealousies can slow projects down or halt them you have to figure out. There may be a motivation entirely. Your life will be much easier if you can get everyone at a client for one team in a company to purchase something, company to understand what you need to proceed. but there may be a counter-motivation from another 6. Keep records of all communications.The problems that surface when team to keep them down and not to let them have it you’re dealing with a variety of departments and personalities can gener- or spend the money.” ate a lot of intramural finger pointing. Having records of who said what when can quickly settle such debates—and save valuable time. PLAYING CORPORATE TWISTER 7. Put the client’s welfare above all else.Interdepartmental fights often Bob Hood’s undergraduate days were spent study- involve egos and grudges that have little to do with the bigger picture. ing sociology. His favorite courses in business You can’t go wrong if you avoid taking sides and focus on finding the school were on organizational analysis. Both best course for the whole company, not just the individuals you’re experiences have served him well when it comes working with. —F. B. 38 Redmond Channel Partner JANUARY 2007 RCPmag.com 0107rcp_BP_37-40.v7 12/8/06 3:53 PM Page 39 to working with his clients as president of the Hood Consult- and ideologies.” In addition, getting everyone on the same page ing Group, a Chicago-based Registered Member and Small can be more challenging if company managers are scattered from Business Specialist. coast to coast—or even around the globe. Hood says an important step in taking on a new client is to There’s some truth in both arguments. But, as always, it all approach the organization as if it were an exotic tribe or culture comes down to each client’s idiosyncrasies. that you’ve just discovered. “Margaret Mead is alive and well in the corporation,” he says, NAVIGATING THE ORG CHART referring to the famous anthropologist. “To be a thorough busi- You can use a variety of approaches for mapping out all these ness consultant, you have to understand the [client’s] organiza- intraoffice intrigues. tion—who does what with whom. Without that understanding, Thomas tries to get acquainted with as many managers as you’re just a plumber.” possible at each client company. To do a thorough job, she enlists Echoing the sentiments of other Microsoft partners, Hood her own staff in the intelligence operation. “You need to get as says it’s imperative to get the lay of the land before launching any many of your people to know as many of their people,” she says. project. Rivalries, both personal and professional, must be charted Fream, of Matrixforce, holds regular meetings where his before you proceed. “You want to make sure you’re not grinding employees can debrief each other about the political maneuver- an axe that one person wants to swing,” he says. ings within a client company. The cultural conflicts that you’re likely to encounter include “Internal politics fall out as part of the process of discussing personality clashes, departmental feuds and struggles over a client,” he says. “In talking with each other, you learn that spending and budgets. Self-aggrandizing managers can get in Kathy over in this office doesn’t like the technology people and the way. So can technology “cults”—groups of employees who that she really doesn’t like the CIO. You find out this firm has a are fanatically loyal to a particular vendor or approach. new widget coming out and the plant manager really likes it. All “You may be talking to one guy, but he might be of a different this helps you get to know the players and what’s happening political structure than the people who are going to be using your across the organization.” system,” says Thomas. “You don’t always know what the end Fream’s firm even uses a customer-relationship management game is because they don’t share their motivations.” system, similar to the one it offers customers, to track and docu- Tom Kemp, CEO of Centrify Corp., a Mountain View, Calif., ment personalities and intrigues. “This is a case of us eating our Gold Certified Partner, recalls the days when it was hard to get own dog food,” he says. “Everyone is plugged into the same the Unix and Microsoft people to agree on anything. Mix those account, so you can glean a lot from the different people working technological loyalties with different department agendas and with different customers.” you can find yourself in the middle of a corporate game of Twister. Kemp, whose company develops identity and access- ASKING THE RIGHT QUESTIONS management software, often finds himself swimming in the Of course, you don’t necessarily need a high-tech solution to map midst of these tricky currents. a customer company’s interior landscape. In many cases, asking “When you sell a complex piece of software, there are various simple, straightforward questions will get the job done. For groups it could interface with,” he says. “Windows people focus instance, Hood often asks right up front who has the authority to on the server. The operations people, along with the Unix team, spend the money, then requests to speak directly to the people have other issues. Then there’s the director of development and who will ultimately green-light his project. And he tries to deter- finally the chief security officer”—all with their own concerns mine whether the CEO and board of directors support the effort: and agendas. “I want to make sure this isn’t a pet project of the controller and Partner-company executives differ over whether internal once we’re in there we’ll have to fight tooth and nail to get [top political problems are related to a client company’s size. Some, executives] on board.” like Hood, believe that larger organizations actually may be Hood and others say you shouldn’t be shy about inquiring easier to navigate. about a client’s organizational chart, even if you risk offending “As a business gets larger, it has to put structures in place that the person who was your initial contact. define these issues,” he says. “It’s the smaller business that needs Kemp says he sometimes adopts the “Columbo” style of inter- to address that need for structure.” rogation, asking question after probing question in the style of Others, such as Kemp, find that a small company is less likely the television detective until he gets an answer that makes sense. to get mired in internal politics. “One person can make the deci- “I’ll say, ‘If you were to buy this, who would approve it?’ If sion,” he says. “In larger companies, there are different fiefdoms they say ‘Bob,’ then I’ll ask if they could introduce me to Bob,” RCPmag.com JANUARY 2007 Redmond Channel Partner 39 0107rcp_BP_37-40.v7 12/8/06 3:53 PM Page 40 FEATURE| Internal Politics Kemp says. “You try to be diplomatic about it, but at the end of the day, “You have to understand the [client’s] that’s the risk you run. You can always take the philosophy that it doesn’t organization—who does what with hurt to ask.” In some cases, you may find your- whom. Without that understanding, self questioning the decisions that a middle manager or another client- you’re just a plumber.” company contact is making about your —Bob Hood, President, Hood Consulting Group project. Hood says that although it can be tricky politically to take an end run around someone you’ve been working with, it’s usually the right thing to do. design plan or [you’re] not going to be able to implement or order “Your ultimate obligation is to the health of the organiza- the software on time. If you’re not strong on this and there’re mul- tion, rather than to a specific individual,” he says. “If they are tiple parties involved, you could wind up eating all the iterations doing things that are detrimental, it’s my responsibility to bring they come up with after the fact.” it to the attention of those in charge.” For instance, at the non- It’s particularly important that your sales force understand profit institutions he serves, “if the controller is doing some- those rigorous rules. Kemp acknowledges that it’s sometimes thing that doesn’t make sense, I go to the executive director.” tough for inexperienced salespeople to probe the political struc- If you’re faced with the unpleasant task of going over the ture of a potential customer company. However, it is key to your heads of your immediate contacts, the word from the wise is success that they do so. simple: Make sure you can prove your point. “Some salespeople don’t ask the hard business questions,” he “I can’t say it long enough or loud enough: Document, docu- says. “It’s easier for them to talk about the features of your prod- ment, document,” says Thomas. “We had a case where we docu- uct. But they have to know it’s better to find out potential prob- mented evidence that we were being asked to implement the soft- lems ahead of time than to promise your boss that this deal is ware in a way that was not right. When the whole thing blew up going to come through tomorrow—and then find out you have to we showed that we had tried to talk to the manager.” The result? run it by the client’s security team.” “We are still with the company and the manager is gone.” SAYING “SO LONG” ESTABLISHING RULES OF ENGAGEMENT Sometimes, despite all your efforts, you may find that a client’s Because the vagaries of institutional infighting vary widely from organization is so dysfunctional that it threatens your own com- place to place, veterans of these political wars suggest you take a pany. In those cases, unless you can make big changes fast, it may page from the military and develop your own “rules of engage- be time to cut your losses and move on. ment” manual to ensure that your company draws from past After repeatedly dealing with one particularly unpleasant experiences and approaches the problem in a unified way. client, Thomas’s company decided it had had enough. “We kept “It has taken a lot of blood, sweat and tears, but nowadays I on getting yelled at,” she says. “They were frustrated with their can chart it out and see when something is going to happen,” says jobs and their lives and were taking it out on our consultant. We Thomas, whose company has a rulebook for interacting with cus- finally said, ‘We are leaving until we get a client that isn’t going tomers. “If [our] consultants feel uncomfortable, they have to to abuse us.’” come and talk to me.” Hood says that as many small and midsized partner compa- Matrixforce’s manual lays out a sequence of steps from the nies enjoy steady growth, their management teams can afford to sales cycle through consulting and implementation. It empha- get choosier about their clients. In cases where it’s clear that inter- sizes the importance of constantly reiterating a clear message to nal politics will never go away, he suggests “firing” the client. the client: It’s up to all your different managers to sign off on a Ultimately, he says, “you have to decide how much time and men- plan before we proceed. tal and psychic energy [you’re willing] to pour in.” • “You have to have a very rigorous methodology and make the client make the decisions,” Fream says. “You have to make it clear Fred Bayles ([email protected]) writes frequently about busi- that this is a matter of time and money. You’ve got to make them ness topics. He is a Boston University journalism professor and a understand that they’ve got to approve this technical plan or this former national writer for The Associated Press and USA Today. 40 Redmond Channel Partner JANUARY 2007 RCPmag.com 0107rcp_TM.4pageAd 12/1/06 9:07 AM Page 1 TECHPARTNER CONFERENCES March 28–29, 2007 Orlando, FL Hilton in the Walt Disney World Resort RedmondRedmond ChannelChannel PartnerPartner magazinemagazine presentspresents aa newnew conference!conference! Co-located with TechMentor Conference Network and Certification Training for Windows Professionals A Special Program for Microsoft Partners: 6 Tracks, 100+ Sessions, 165 Hours of Training Helping You Understand the • Exchange / SQL Server Partner Opportunity in • MCSA • MCSE Microsoft’s New Wave of Software • Scripting and Automation March 28–29, 2007 • Security • System and Network Troubleshooting REGISTER TODAY AND SAVE! TechMentorEvents.com March 26-30, 2007 Presented By 0107rcp_TM.4pageAd_p2bleed 12/1/06 9:49 AM Page 2 March 28–29, 2007 Orlando, FL Hilton in the Walt Disney World Resort Helping You Understand the Partner Opportunity in Microsoft’s New Wave of Software A new wave of Microsoft soft- Channel Partner magazine, TechPartner ware is hitting the market, bringing with it offers expert insight into the variety of new business opportunities for Microsoft revenue opportunities generated by partners. The company’s $20 billion invest- these new Microsoft products. ment over the last few years is resulting in You’ll get a technology overview deep new versions of Windows Vista, Microsoft enough to make those new business Office, Exchange Server, SharePoint Server opportunities clear. What’s more, you’ll and security products this year, with more come away with tips for sales and products, such as Windows “Longhorn” marketing of the new products, an Server, on the way as well. understanding of the differentiation How should Microsoft partners between Microsoft products and major respond? That’s where the new competitors and grounding in the most TechPartner Conference comes in. important licensing changes. You’ll also Brought to you by the organizers of the get important updates on Microsoft’s long-standing TechMentor Conference partner-facing programs and series and the editors of Redmond organization. 0107rcp_TM.4pageAd 12/1/06 9:07 AM Page 3 TECHPARTNER CONFERENCES Agenda-at-a-Glance: TechPartner WEDNESDAY, March 28 7:30 – 8:30 a.m...... Networking and Coffee with Pastries 8:30 – 10 a.m...... Keynote 10:15 – 11:45 a.m...... Courses 11:45 a.m. – 2:30p.m. . .Lunch and Exhibit Hall 2:30 – 4 p.m...... Courses 4:15 – 5:30 p.m...... Keynote with Mark Minasi 5:30 – 7:30 p.m...... Welcome Reception and Exhibit Hall THURSDAY, March 29 7:30 – 8:30 a.m...... Networking and Coffee with Pastries 8:30 – 11:45 a.m...... Courses 11:45 a.m. – 2 p.m. . . . .Lunch and Exhibit Hall 2:15 - 5:30 p.m...... Courses WHO • Executive Managers • Systems Integrators/VARs • Consultants SHOULD • Service Providers • IS/IT Managers and Directors • Network and Systems Administrators ATTEND • Network and Systems Engineers • MCPs, MCSAs and MCSEs Bring Your Team to TechMentor You can bring your IT department with you because the TechPartner Conference is co-located with the TechMentor Conference. While you get up-to-speed on the new technologies from a sales perspective, your IT department can attend in-depth technical training courses that run the entire week. TechMentorEvents.com 0107rcp_TM.4pageAd 12/1/06 9:07 AM Page 4 TECHPARTNER CONFERENCES Helping You Understand the Partner Opportunity in Microsoft’s March 28–29, 2007 New Wave of Software Orlando, FL Hilton in the Walt Disney World Resort Topics Include • Windows Vista Opportunities • Microsoft Exchange 2007 Opportunities • Microsoft Office System Opportunities • Microsoft Office SharePoint 2007 Opportunities • The Next Software Wave: Equipping Yourself to Outsell the Competition • Using Marketing to Catch and Ride the Growth Wave • Microsoft Small Business Server Opportunities • An Independent Look at the State of the Microsoft REGISTER TODAY Partner Program AND SAVE! • Licensing in the Next Wave TechMentorEvents.com • Virtualization in the Next Wave PLATINUM SPONSOR: Presented By 0107rcp_SolSpot_45-52.v6 12/8/063:18PMPage45 I ILLUSTRATION BY ADAM MCCAULEY Solution VISTA—HERE AT LAST BY KEITH WARDBY sell it. timeto now it’s and testedit— about it,seenit You’ve read t’s beenfive yearssincet’s Microsoftlastreleased from Apple and Linux are still just blips on the radar.from AppleandLinuxarestilljust blipsonthe strongest Vista’s competitor is especially Aero ifyour Desktop interface. customers alternatives planonusingthe increasedsystem requirements, ofsignificantly though, price tionality comesatthe promise tofeatures enhancesecurity, that Thatfunc- reliabilityandperformance. oughly tested, battle-readydesktop operatingsystem ever. ahostofnew Itoffers Windows cooked isfinally andreadyto Vista serve. known as Now, soufflé the alot ofslicing,dicingandremixingingredients, after MICROSOFT WINDOWS VISTA ees ovlm utmr Nov. 30,2006 Jan.30,2007 Microsoft.com/windowsvista for HomeBasicto$399Prices rangefrom$199 for Ultimate Release toconsumers(approximately) Release tovolume customers Microsoft has taken great pains to assure the world that Vista is the mostthor- world painsto isthe hastaken Vista great assurethe that Microsoft MICROSOFT WINDOWS VISTA WINDOWS MICROSOFT a new desktop operatingsystem. Spotlight RCPmag.com JANUARY 2007 Replacing an unstable product with a Replacing productwith anunstable Windowsinstalling 2000andXP. outWindowscase for ripping 9xand reliableOS. XPisitselfastable, that XP,how itoutperforms much given adoptionVista’s may well by bedriven really Windows itsolderbrother XP. change fromXP. TheUAC lets users mostsignificant isprobablyVista the fromXP. anupgrade when pitching probably yourThat’s bestopportunity new, oldOSesandthe the security. it’s between one bigdifference if there’s Internet Explorerbrowser. Therefore, many particularly inthe patches, Windowsthan 9x,itstillneedstoo OSes andrelated products. newlyfixes for the found bugsinits Tuesday, releases day Microsoft the isPatch month dreaded day ofthe tell most tomers you andthey’ll the Askanyof importance. ofyour cus- listedAnd inorder arecertainly those areas ofsecurity, reliabilityandsearch. The major changes to areinthe Vista TUESDAYIT’S ALREADY? have alot to about. talk Windows Fortunately, Vista. you’ll business customersto to upgrade have to make acompelling casefor your definitelyaharder sell.You’llThat’s abettering agoodproductwith one. sense. Here,itmay beacaseofreplac- onealwaysstable makes goodbusiness There was always asolidbusiness The UserAccount Control(UAC) in XPisfarmoresecure Although emn hne ate 45 Redmond ChannelPartner 0107rcp_SolSpot_45-52.v6 12/8/06 3:18 PM Page 46 SolutionSpotlight perform most functions with lower-level privileges, rather than having to be at the Administrator level on their computer. 5 FLAVORS Thus, even if attackers get users’ credentials, they won’t be OF VISTA able to do nearly as much damage as before. One lesser-known aspect of UAC is that even administrators There are five primary versions of Vista, each normally run in Standard mode. They’ll be prompted to elevate configured for different environments: their credentials for specific tasks. This will help in environ- Windows Vista Home Basic:First in Vista’s batting order is ments where rogue admins are a problem. The functionality of Home Basic ($199). This version gets the job done, but on a very UAC is primarily what’s made Macs more secure than Windows limited basis. It’s lacking some major upgrades that appear in computers over the years. Microsoft has now caught up. the next step up, Home Premium. Because Home Premium Internet Explorer (IE) has also been a notorious security costs just $40 more, it’s hard to make a compelling case for hole. IE7, the latest version, includes “Dynamic Security Protection.” This slate of improvements should close most of Home Basic under any conditions other than a severe budget the most prominent holes. Improvements include: crunch. Home Basic can’t support more than a single processor. ■ ActiveX opt-in, which means most ActiveX controls are The 32-bit version supports up to 4GB of RAM, while the 64-bit disabled by default and easy to turn off. version doubles that amount. It lacks Windows Media Center, ■ Phishing Filter, which warns users about fraudulent or Windows Movie Maker, the Encrypting File System and the potentially fraudulent phishing sites. It will also block known Aero interface. phishing sites. Windows Vista Home Premium:Home Premium ($239) is ■ “Protected Mode” (offered only in the Vista edition of more expensive than Home Basic, but has much more function- IE7), which isolates the browser from the rest of the system, ality. It supports two processors and adds the multimedia fea- preventing malicious software from getting into the OS. tures that Home Basic lacks. This version can also do scheduled ■ Windows Defender, which regularly scans the computer backups. It’s better for laptops, with Windows Mobility Center and offers to remove spyware and adware, both increasingly and Tablet PC support built in. Neither of the Home versions can used as attack vectors. join a domain, a limitation they share with Windows XP Home. Windows Vista Business: The Business edition ($299) is the entry-level offering for corporations, but it packs a punch. Vista Business supports up to two processors and 4GB of RAM in its 32-bit version, and 128GB in its 64-bit incarnation. These are Spotlight Highlights the same standards for Vista Enterprise and Vista Ultimate. KEY FEATURES Windows Vista Enterprise:The key differentiator between ✱ User Account Control reduces risk of security breaches the Business and Enterprise versions is Windows BitLocker Full ✱ Dynamic Security Protection isolates browser Drive Encryption. BitLocker enhances security by encrypting an from operating system entire hard drive rather than just selected files or folders. It’s a ✱ Aero interface expedites searching and switching welcome technology in these days of stringent regulations between programs such as HIPAA and Sarbanes-Oxley and frequent reports of ✱ System Diagnostics enhance reliability laptops loaded with sensitive data being lost or stolen. OPPORTUNITIES Enterprise is only available through a volume license. Windows Vista Ultimate:Ultimate ($399) is for your ✱ Multiple versions fit any environment customer who wants it all—all the business functionality and ✱ Major performance gains by upgrading from Windows 2000 security, plus all the media goodies and fun stuff. It includes (and older versions) everything found in all the lower-tier home and business ✱ Emphasize online security, better mobility and improved connectivity versions of Vista. —K.W. 46 Redmond Channel Partner JANUARY 2007 RCPmag.com 0107rcp_SolSpot_45-52.v6 12/8/06 3:18 PM Page 47 » MICROSOFT WINDOWS VISTA The new dialog boxes give your customers more file information than their counterparts in Windows XP. This view also shows the mini-apps called Gadgets, like the clock and calendar. Taken together, these security enhancements make a tomers time to save important work before the blue screen of compelling case in and of themselves for an upgrade to Vista. death descends. It will be particularly reassuring to your customers to hear Vista can also tell when an app is using too many system about the security enhancements made to IE7. resources, such as virtual memory, and alert your customers before the situation becomes critical. The Network REAL RELIABILITY Diagnostic Framework (NDF) is part of that toolbox. This Security is part of the overall reliability picture, but there’s network troubleshooter helps users with file-share issues, much more to reliability than just keeping things safe. True wireless connectivity problems and difficulties connecting reliability is the ability to spot potential issues before they to Web sites. Other categories include memory and per- arise, to fix little problems before they become bigger ones formance diagnostics. and to back up and restore data if one of those problems Vista can also fix its own startup problems. A boot-level crashes your system. Microsoft has upgraded Vista in these failure automatically fails over to a technology called Startup areas as well. Repair. This tries to correct the problem and start the computer One welcome change is built-in diagnostics. Wouldn’t it with little or no user input. be nice to know of an impending hard drive crash before it If your customers have to restore lost data, Vista includes a happens? That’s the theory behind this feature, which is sup- new Backup and Restore Center. This continues on the posed to warn of hard disk problems, thus giving your cus- “Center” theme that debuted with XP’s “Security Center” and RCPmag.com JANUARY 2007 Redmond Channel Partner 47 0107rcp_SolSpot_45-52.v6 12/8/06 3:18 PM Page 48 SolutionSpotlight The new Search Folders make it easy for your customers to organize and locate files, without having to remember where they’re stored. Each folder is connected to a saved search. continues with “Mobility Center.” The Backup and Restore BETTER SEARCH AND PERFORMANCE Center makes backing up data—probably the most-needed Although security and reliability will be Vista’s major selling and least-performed task—much easier than in previous ver- points (and with good reason), the improvements over XP sions of Windows. don’t end there. Vista’s search capabilities and overall per- The Backup and Restore Center includes a file and folder formance (with the appropriate hardware) have also had a backup wizard, System Image Backup (which backs up sys- major rework. tem state data) and Shadow Copy Backup. Microsoft first Although Bill Gates didn’t get his pet project WinFS into included Shadow Copy with Windows Server 2003. It takes Vista, that doesn’t mean it’s bereft of new search technology. “snapshots” of files, then lets users return to previously stored In fact, quite the opposite is true. Desktop search (called versions of those files. Shadow Copy works on the local com- Instant Search) is powerful, quick and embedded in more puter on a server share. It can save IT staffers a huge amount of places, such as Explorer windows. time by allowing users to find their own deleted files rather Search Folders is another addition. These save searches than relying on IT to track them down. and add similar topics to the folder for future searches. For Restore data comes from the Shadow Copy, which is differ- example, if you search for “Matt” and “sales,” Vista will save ent from XP’s previous restore method. Microsoft says the new those search terms in a Search Folder. The next time you save restore process is more efficient and robust. Changes in the secu- a file with “Matt” or “sales” in the name, that file will be auto- rity and reliability aspects of Vista could affect an IT depart- matically sent to that Search Folder. ment: If it works as advertised it should need less support, Vista is also claiming better performance than XP. This meaning that your customers can significantly trim IT costs. claim is worth a skeptical look, however, given Microsoft’s 48 Redmond Channel Partner JANUARY 2007 RCPmag.com 0107rcp_SolSpot_45-52.v6 12/8/06 3:18 PM Page 49 » MICROSOFT WINDOWS VISTA CHANNEL CALL history of making products bigger and more bloated rather than smaller and faster. To back up its performance boasts, MAKING THE PARTNER- Microsoft points to several new features, including “Windows SuperFetch.” VENDOR MARRIAGE LAST SuperFetch is supposed to intelligently determine your usage patterns. It records which programs you use most, what by Keith Lubner tain Microsoft technologies, which Most Microsoft partners I work its employees thoroughly under- features within those programs you use and even when you use with are trying to expand their stand. Keep this competency in them (for example, Excel during the day and Flight Simulator at businesses, and the most com- mind as you evaluate other ven- night). It then loads those programs into memory beforehand, mon approach is by piling vendor dors. Choose those that best which saves load time. It also prioritizes tasks, moving certain relationships on top of a Microsoft match your technical skills. jobs you don’t perform as much into the background. relationship. These vendor-partner In addition, you should ask ven- The other potential performance gain comes from a tech- unions aren’t always happy. dors how their technology influ- Here are five practical guide- ences or drives Microsoft software nology called ReadyBoost. ReadyBoost lets a user plug in an lines for increasing your chances of sales. If they’re aligned properly, external memory device such as a USB thumb drive. Vista can finding a suitable vendor and mak- they’ll have the answers ready. But then use that as additional memory. It’s like adding tempo- ing the marriage work. if their responses don’t include the rary RAM. Microsoft technologies that are at 1. Revenue Generation: the core of your company, you COMPETITIVE LANDSCAPE Show me the money! should walk away. Otherwise, If Vista sales start out sluggish, is that an opening for Mac and The primary reason to enter into a you’ll be trying to fit a square peg the myriad flavors of desktop Linux to make some inroads? relationship with a vendor is to into a round hole. make money. The best vendors offer Possibly, but if history is any indication it’s unlikely. Linux, and their partners an opportunity to 3. The Vendor’s Program: especially Apple, have carved out their niches and have yet to achieve that goal by selling both It should be a challenge. gain any real market share on Windows. products and services. It’s not good Great vendors place a premium What’s more, they seem fairly comfortable with the current if the vendor’s strategy involves you on recruiting and enabling part- merely selling their product with lit- situation. Apple is still strong in creative markets such as pub- ners. Take a careful look at the lishing, music, film and video. Linux continues to offer viable tle or no services attached, because details of the vendor’s channel (and much cheaper) alternatives to Windows, and has made most Microsoft partners have a program. Does the program have services component to their busi- performance criteria, marketing headway in foreign markets much more so than in the United ness. The product margin might be funds, lead generation and sales States. Neither entry is a serious threat to either XP or Vista. nice, but you won’t be able to grow incentives? Is the vendor’s Certain applications and technologies—such as the Firefox all parts of your business. direct-sales force compensated browser that has steadily gained on IE and Google, which is the Conversely, if the vendor has a for working with partners? If not, Microsoft of search—are doing well in their own spaces. low-margin product on which be careful. The more comprehen- Microsoft is, of course, green with envy at the success of the you make money primarily by sell- sive the program and the more iPod, iTunes and other assorted gadgets coming out of ing services, this model will eventu- the vendor makes you jump ally cause you pain. In the beginning through hoops, the better. Due Cupertino. However, those developments aren’t any threat to you might generate decent rev- diligence on the vendor’s part the Windows hegemony. enue, but over time the disincentive translates to due diligence on No, the greatest threat to Vista is Windows XP. That’s why of the low margin on the product your part, which can lead to a suc- Microsoft is working hard to distinguish the two. Its sales strat- can result in your company not cessful marriage. egy emphasizes several factors that add to Vista’s value propo- focusing enough on generating new sition. One aspect is the enhanced security features such as deals. Business will dry up once the 4. Marketing Expectations: User Account Control, IE7 Protected Mode and BitLocker Drive last services project ends. Leads or no leads? Encryption. Better security means fewer crashes, viruses and When it comes to marketing, ven- 2. Core Technologies: dors typically choose one of two malware across the network. That adds up to lower IT and Square peg in a round hole? strategies. With the first strategy, infrastructure costs. Every Microsoft partner has a core the vendor will (or should) give you The other factor is reducing costs through “well-managed” competency (official or not) in cer- continued next page environments. Microsoft is distinguishing well-managed envi- RCPmag.com JANUARY 2007 Redmond Channel Partner 49 0107rcp_SolSpot_45-52.v6 12/8/06 3:18 PM Page 50 SolutionSpotlight CHANNEL CALL number of images your customers will need to maintain, lowering complexity and costs. continued a high margin, but will expect you apply to the vendors. Nothing hap- to do much of the marketing in pens until all executives are 100 MARKETING AND SALES return. This is fine as long as you percent committed. Microsoft’s marketing theme for Vista is a three-pillared, already have the appropriate lead- I recommend that partners cre- alliterative structure: Confident, Clear, Connected. generation programs and people in ate a simple spreadsheet with place. With the second strategy, five tabs corresponding to these Confident Clear Connected Means your cus- Refers to the ease Refers to the vendor will give you a moderate five guidelines. On each tab, score tomers’ networks with which your communications margin but will also supply leads. the vendor on a scale of one to will be more secure customers will find enhancements While you give up margin, you gain ten, with one being “low” or and run more and organize such as new customers. “poor” and ten being “high” or smoothly and more information with better wireless Both approaches have merit “excellent.” Obviously, the high- reliably with Vista the new search connectivity and and, of course, a vendor program est score wins. than with XP, functions and the online security that blends the two together may Bottom line: If you do your previous versions Aero interface. enhancements. be best. But choose the approach homework when examining of Windows or that best fits your organization to potential vendor relationships, competitive optimize success. you will increase your chances of platforms from making a successful match and Apple or Linux. 5. Executives: They have to commit. growing your business and rev- The biggest factor to partnering enues as a result. Applying those pillars to Vista Business (see “5 Flavors of success is understanding whether Keith Lubner (klubner@channel or not the executives within your consultingcorp.com) is managing Vista” on p. 46), for example, would go something like this: company are prepared to work partner of Channel Consulting Vista Business is easier to deploy in a network environment with vendors. Are they committed Corp., a N.J.-based global consulting than any previous version of Windows. It’s safer, more secure to developing joint business organization and more reliable. Operating and maintenance will be lower, so plans? Are they ready to deploy focused on channel your customers will save substantially on their IT costs. (That’s people to manage the vendors? strategy, design, Are they prepared for the invari- enablement, out- the Confident part.) able bumps in the road? Keep in sourcing and train- The new interface and search capabilities make it easier to ing for growing mind that these same questions organize and find critical business documents. There’s also companies. built-in help designed specifically for small businesses. (There’s the Clear.) Vista Business also enhances your mobile workforce by ronments from “typically managed” environments, and making it easier to securely connect to business networks and defining “well-managed” as a state that adopts desktop man- Wi-Fi hotspots. Laptop computers connecting to your inter- agement best practices. nal network have to meet certain security specifications, Vista, Microsoft claims, is easier to bring to a “well-man- which makes it safer. Vista also includes new mobile func- aged” state. Once there, it’s easier to maintain. Early cus- tionality like Mobility Center and Tablet PC. (And there’s tomer reports suggest that Vista can lower IT costs by as much the Connected.) as 50 percent. Those figures are certain to be optimistic, but Microsoft has many online resources to help get your that’s the story Microsoft is taking to market. team up to speed on Vista. A good place to start is Before your customers can manage any environment, Microsoft’s partner page for Vista: https://partner.microsoft. they’ll have to put it in place. Deployment is another cost com/40020336. You’ll find online training in Vista funda- they’ll need to justify. Microsoft’s answer to that is providing mentals, a “Business Value Discussion Tool” and various more efficient deployment and migration tools. Those community resource pages. Next, tab over one space to the include better application compatibility tools to ensure that right from the previous page and check out the sales and legacy programs will still function. There are also hardware- marketing page. This section offers columns by sales independent Vista images that significantly reduce the experts, an Enterprise Resource Guide for selling to the big 50 Redmond Channel Partner JANUARY 2007 RCPmag.com 0107rcp_SolSpot_45-52.v6 12/8/06 3:18 PM Page 51 » MICROSOFT WINDOWS VISTA UPGRADE BLUES boys and a Partner Marketing Center. Don’t overlook the Partner Learning Center, accessible from the “resources” In terms of quick adoption, Microsoft faces a dilemma. section of the Partner Program benefits homepage at Many of today’s PCs won’t be able to take advantage of many of https://partner.microsoft.com/global/40011586. This Vista’s features without significant upgrades. This is a bottom- site has many sales training tools, and you can even set line double-whammy. Not only is there the cost of Vista itself, up a program that will track your sales representatives’ but also the cost of upgrading hardware to be able to run Vista. progress. There are numerous learning formats, Microsoft lists the minimum requirement specs for Vista as at including classroom, hands-on labs and online courses. least an 800MHz Pentium processor, 512MB of RAM and a This training assistance is a benefit you get by virtue of DirectX 9-capable video card. As anyone who’s ever used Windows being a partner, so why not take advantage? in the real world can tell you, however, Microsoft’s minimum specs are rarely realistic. Minimum recommended specs (which THE FINAL WORD should really be considered the bare-bones minimum) start at What will Vista’s long-term impact look like? It’s more 1GB of RAM, a 128MB video card and a 1GHz processor. difficult to tell than it was with previous versions of How many organizations sport desktops with those kinds of Windows. Windows 95 was a quantum leap from stats? That’s a key question that will be a determining factor in Windows 3.1. Its adoption was swift and widespread. how quickly the business world adopts Vista. —K.W. Then Windows 98 came along, offering mostly minor Announcing a breakthrough in automatic technology Introducing New ® Enhancing File System Performance — Automatically™ Diskeeper 2007 marks the dawn of the first ever truly automatic software of its kind. As automatically as the sun rising, with Diskeeper 2007 deployed on your client’s systems they will run faster — period. Through the use of brand-new InvisiTasking™ technology, Diskeeper eliminates potential problems by defragmenting on the fly, IN REAL TIME without affecting system resources or intruding on system demands. Moving beyond the concept of “Set It and Forget It,”® Diskeeper 2007 represents a quantum leap in system performance and reliability technology. One simply installs the software — Diskeeper takes care of the rest. Available at Available at Every client will benefit from Diskeeper 2007. A Ingram Micro: Tech Data: site wide Diskeeper installation will improve (800) 456-8000 (800) 237-8931 performance and reliability on all their systems. Order your FREE Solutions Kit. Includes full versions of Diskeeper for your use. Visit: www.diskeeper.com/rcp07 or call 800 829-6468 code 4390 ® © 2006 Diskeeper Corporation. All Rights Reserved. Diskeeper, Enhancing File System Performance — Automatically, InvisiTasking, the Diskeeper Corporation logo, and “Set It and Forget It” are either registered trademarks or trademarks owned by Diskeeper Corporation in the United States and/or other countries. The Ingram Micro logo is a registered trademark of Ingram Micro. The Tech Data logo is a registered trademark of Tech Data. Diskeeper Corporation, 7590 N. Glenoaks Blvd., Burbank, CA 91504 www.diskeeper.com RCPmag.com JANUARY 2007 Redmond Channel Partner 51 0107rcp_SolSpot_45-52.v6 12/8/06 3:18 PM Page 52 SolutionSpotlight upgrades from 95. Therefore, its adoption was slower and The problem is that it’s not replacing a poor product. it didn’t hit the market with the tsunami-like force of 95. XP is solid and reliable. It’s been maturing for five years Still, there were major problems with 9x. It was prone to and has enough positives that there should be no pressing crashing, it was insecure and it wasn’t built well for network need to upgrade for most shops. That means a tougher sell usage. All that led to Windows 2000, which cured many of for you. those ills. Windows 2000 was really more of a stopgap system Don’t be surprised if Vista starts off slowly and builds until the next big thing came along. That big thing was momentum over time. In the end, given Microsoft’s domi- Windows XP. With a new code base, vastly improved security nance, it will probably be as widely adopted as XP is now. At and greatly enhanced reliability, XP became the de facto stan- the very least, you’ve certainly got something to keep you dard OS for businesses and consumers. busy until “Longhorn” server comes out. • Vista appears to be somewhere between the revolu- tionary changes from Windows 95 to Windows 2000 and Keith Ward ([email protected]), former XP and the evolutionary changes from Windows 95 to editor of Redmond magazine, is a freelance IT writer living Windows 98. It’s not a new paradigm, but it does add many in Maryland. new features and truly enhances important aspects of the operating system like security, reliability, predictability Get More Online and searchability. Learn more about Vista Partner Resources at RCPmag.com. FindIT code: HereAtLast Proven. Practical. Powerful. The Complete, 100% Microsoftfi -based IP Telephony Solution Enterprise Interaction Centerfi (EIC) Imagine offering your customers an IP PBX phone and communication system made for their Microsoft platform. It even comes with the perfect sales pitch. Discover All software. Fully pre-integrated. A SIP architecture and open standards for VoIP. Embedded Client .NET call control tool bars the Partner for Outlookfi , Microsoftfi Dynamics GP and Dynamics CRM. opportunities Exchange-based unified messaging, and SIP functionality for fi ahead of you. Live Communications Server . Now imagine a Channel Partner Program that provides immediate enablement and rewards you with escalating product margins. All for the perfect product. www.vonexus.com Visit us to view the EIC demo and register for our free Partner Program web seminar ©2006 Vonexus Inc. All Rights Reserved. 09/06 52 Redmond Channel Partner JANUARY 2007 RCPmag.com 0107rcp_Selling_53.v4 12/8/06 5:14 PM Page 53 SELLING MICROSOFT Overcoming seasonal slumps. If your sales typically slow down over the summer, try launching a sales prospecting activity contest in March, April and May. For example, award sales team members points for each new face-to-face call or sales demonstration that they make during those months, with accumulated points eventually BY KEN THORESON eligible for prizes. Such an effort can go a long way toward increasing the number of opportunities in the pipeline from June through August. Following are some issues to keep in mind as you plan sales contests: Playing to Win: ■ Determine what you want the contest to accom- plish. Will it add incremental new business levels or simply shift future orders to a nearer term? Using Sales Contests ■ Set the ground rules. Are all sales executives on an equal basis for the contest? Can everyone win—or just certain team members? to Hit Your Goals ■ Make the contest length the same as the sales cycle. A 30-day sales contest won’t be effective because, ales contests are important ingredients in exceeding your of course, all prospects are already in the pipeline, revenue targets, building high-performing sales teams and even ready to close. ■ Set specific goals that can be measured weekly or creating the right organizational culture—one that’s both sales- monthly. Create a visible tracking tool to show the results. Sdriven and fun. ■ Incorporate an exciting theme. If your top prize is a Different types of contests can help you achieve different goals. Some dream vacation, post pictures of the destination and build should be held annually to address sales objectives, company business your annual sales slogan or motto around the goal of strategies and potential seasonal fluctuations. Others can be scheduled as winning that trip. needed to help launch new products or services, promote new releases or ■ Consider making rewards gifts, rather than cash. upgrades or tie into larger Microsoft campaigns. Still others are short-term Salespeople may want you to “show them the money,” incentive games designed to motivate sales personnel to accomplish specific but, in truth, cash bonuses are typically wasted and soon objectives by a specific deadline. forgotten. Instead, try awarding something tangible, Following are some typical goals and ideas for contests that may help whether it’s a laser pointer, a gift certificate to a local achieve them: store or an expenses-paid weekend getaway. Increasing sales volume. Consider adding a cash bounty for each addi- ■ Boost team members’ motivation by getting their tional new seat or license sold beyond a certain target. Set a quarter-to-date families involved. For long-term games involving signifi- objective above your sales goal; that way, everyone on the team can win. cant gifts or major trips, send rules and teaser gifts to Improving customer service. Periodically survey your entire customer salespeople’s homes after announcing the contest at work. base. If satisfaction reaches a certain goal (for instance, when 95 percent of Send congratulatory letters to winners’ homes as well. your clients say they’re “highly satisfied”), and if your company is prof- ■ Never run contests to the last day of the month or itable, everyone gets a cash bonus. sales period. Halting them five days before the end allows Acquiring new clients. To boost the number of new clients you add each time for making your month’s objectives. If all goes well, quarter, consider creating a “bounty bonus” plan. For example, salespeople you’ll exceed your targets—with nearly a week to spare. • earn a bounty bonus—either in cash or in points that can be redeemed for rewards—for each new client or each competitive replacement of a specific Ken Thoreson ([email protected]) is managing part- vendor’s customer. In addition, you could offer bounty bonuses for sales- ner of the Acumen Management Group Ltd., a Knoxville, people who exceed their quarterly or annual quotas for new accounts. Tenn.-based consulting firm focused on improving You might even post “wanted” posters—with the bounties prominently sales management in growing companies. Visit www. displayed—to help keep salespeople focused on contest objectives. acumenmgmt.com for more information. PORTRAIT BY SCHNARE JILLIAN RCPmag.com JANUARY 2007 Redmond Channel Partner 53 Project1 10/11/06 10:39 AM Page 1 IAMCP is the premier global networking forum for Microsoft Gold and Certified Partners. Through its 55 Chapters worldwide it fosters Partner to Partner activity at the local, national, and global levels. Whether it’s a casual get together over drinks or a formal joint effort to expand business offerings and increase customer satisfaction, you’ll find activity nearly every day of the year in one of our local Chapters We believe that business happens when people meet in real life! To join a chapter in your area please visit www.iamcp.org 1206rcp_AdIndex_55.v1 12/8/06 4:13 PM Page 55 AdvertisingSales RCPResources Redmond Channel Partner 2006 AD INDEX Advertiser Page URL Matt Morollo Autotask Corporation 30 www.autotask.com Associate Publisher BackupAssist 4 www.BackupAssist.com 508-532-1418 phone 508-875-6622 fax CenterTools, LLC 9 www.centertools.com [email protected] Diskeeper Corporation 51 www.diskeeper.com GFI Software C3 www.gfi.com Hewlett Packard 7 www.hp.com West/Mid West East Int’l Association of Microsoft Dan LaBianca JD Holzgrefe Certified Professionals 54 www.iamcp.com Director of Advertising, West Director of Advertising, East Managed Services 818-674-3417 tel 804-752-7800 tel Provider University C2 www.mspu.us 818-734-1528 fax 253-595-1976 fax Microsoft Corporation 3,18,19 www.microsoft.com [email protected] [email protected] Objectworld Communications C4 www.objectworld.com Oracle Corporation 11 www.oracle.com Redmond Channel Partner 13 www.rcpmag.com Sales IT Certification SYSPRO 23 www.syspro.com Bruce Halldorson & Training – USA, Europe TechMentor Conferences 41-44 www.techmentorevents.com Western Regional Sales Manager Al Tiano Vonexus 52 www.vonexus.com CA, OR, WA Advertising Sales Manager 209-473-2202 tel 818-734-1520 ext. 190 phone 209-473-2212 fax 818-734-1529 fax EDITORIAL INDEX [email protected] [email protected] Company Page URL Danna Vedder Production Advanced Micro Devices Inc. 26 www.amd.com Apple Computer Inc. 49 www.apple.com Microsoft Account Manager Kelly Ann Mundy 253-514-8015 tel Production Coordinator Centrify Corp. 39 www.centrify.com 775-514-0350 fax 818-734-1520 ext. 164 phone Client Profiles Inc. 32 www.clientprofiles.com [email protected] 818-734-1528 fax ConnectWise Inc. 32 www.connectwise.com [email protected] DirectPointe Inc. 12 www.directpointe.com Tanya Egenolf Advertising Sales Associate ePartners Inc. 28 www.epartnersolutions.com 760-722-5494 phone Exertus Partners LLC 27 www.exertuspartners.com 760-722-5495 fax Google 26, 49 www.google.com [email protected] Hewlett-Packard Co. 29 www.hp.com Hood Consulting Group 39 www.hoodconsulting.com IBM Corp. 26, 56 www.ibm.com Corporate Headquarters: 16261 Laguna Canyon Road, Ste. 130, International Association of 1105 Media Irvine, CA 92618. Microsoft Certified Partners 26 www.iamcp.org 9121 Oakdale Ave., Suite 101, Chatsworth, CA Kit Software Ltd. 26 www.software.com 91311 www.1105media.com The information in this magazine has not LAN Associates Inc. 34 www.lanassociates.com undergone any formal testing by 1105 LogicForce Consulting LLC 34 www.logicforce.com Media, Inc. and is distributed without any Media Kits: Direct your Media Kit requests to Matrixforce Corp. 37 www.matrixforce.com Matt Morollo, associate publisher, warranty expressed or implied. 508-532-1418 (phone), 508-875-6622 (fax), Implementation or use of any information Mozilla Group, The 49 www.mozilla.org [email protected] contained herein is the reader’s sole Novell Inc. 5 www.novell.com responsibility. While the information has Oracle Corp. 16, 26 www.oracle.com Reprints: For all editorial and advertising been review for accuracy, there is not guar- PartnerWise 27 www.partnerwise.com reprints of 100 copies or more, and digital antee that the same or similar results may Revenue Rocket Consulting Group 28 www.revenuerocket.com (Web-based) reprints, contact PARS be achieved in all environments. Technical SAP AG 26 www.sap.com International, Phone 212-221-9595, inaccuracies may result from printing Sun Microsystems Inc. 16 www.sun.com errors and/or new developments in the e-mail: [email protected], Web: Tellus International Inc. 27 www.tellusinternational.com www.magreprints.com/QuickQuote.asp industry. The TM Group Inc. 38 www.tmgroupinc.com List Rentals: To rent this publication’s e-mail Redmond Channel Partner (ISSN 1556-2727) XMLAW Inc. 36 www.xmlaw.net or postal mailing list, please contact our list is published monthly by 1105 Media, Inc., manager Worldata: Phone: 800-331-8102 9121 Oakdale Avenue, Ste. 101, Chatsworth, E-mail: [email protected] CA 91311. Application to Mail at Periodical Postage Rates is Pending at Chatsworth, CA Web site: www.worldata.com/101com back issue requests, and address POSTMASTER: Send address changes to 91311-9998, and at additional mailing Postal Address: 3000 N. Military Trail, changes: Mail to: Redmond Channel Redmond Channel Partner, P.O. Box 2166, offices. Complimentary subscriptions are Boca Raton, FL 33431-6375 Partner, P.O. Box 2166, Skokie, IL 60076, Skokie, IL 60076-9282. Canada Publications sent to qualifying subscribers. Annual © Copyright 2007 by 1105 Media, Inc. All e-mail [email protected] or call Mail Agreement No: 40039410. Return subscription rates for non-qualified rights reserved. Printed in the U.S.A. 866-293-3194 for U.S. & Canada; Undeliverable Canadian Addresses to subscribers are: U.S. $39.95 (U.S. funds); Reproductions in whole or part prohibited 847-763-9560 for International, Circulation Dept. or DHL Global Mail, 7496 Canada/Mexico $54.95; outside North except by written permission. Mail requests fax 847- 763-9564. Bath Rd Unit 2, Mississauga, ON, L4T 1L2. to “Permissions Editor,” c/o RCP Magazine, America $64.95. Subscription inquiries, RCPmag.com JANUARY 2007 Redmond Channel Partner 55 0107rcp_directions_56.v7 12/8/06 4:57 PM Page 56 DIRECTIONS Today, Microsoft has grown up, and it’s lusting for the data center. But it faces strong incumbents and its own reputation for not knowing much about its customers’ busi- nesses. The Industry Builder program gives Microsoft not only products that can appeal to enterprise customers, but the backing of ISV partners whose technical and industry expertise in these markets far exceeds Microsoft’s. BY PAUL DEGROOT These products reinforce an important Microsoft product trend. Axapta has been anointed as the flagship of the Dynamics line. OK, this isn’t official, but it’s not a well- kept secret. Dynamics GP, NAV and SL aren’t excluded Industry Builder from the program, but the fact is that Microsoft needs to consolidate the four Dynamics product lines. Various efforts (Project Green, the Microsoft Business Foundation) Tells You a Lot About to create a product line that is simultaneously new (to customers) and familiar (to existing partners) have not worked. So the company is putting its resources into Microsoft the Axapta bucket, as the Industry Builder program makes clear. any ISVs and services partners would like to have just a small part of the resources that Microsoft spends on marketing and Industry Builder exemplifies Microsoft’s preferred part- ner role. Any partner who has spent more than a year product promotion every year. There are numerous signs that listening to Microsoft executives has probably got the MMicrosoft sees the value of that, but probably nothing that says it as well as mantra down by now: Build on our platform, don’t com- the company’s Industry Builder program. pete with it. Microsoft’s great strength is in horizontal solutions; partners have more vertical expertise. The Industry Builder program is aimed at Dynamics AX partners. Creating industry-specific solutions is not a Microsoft AX, formerly known as Axapta, is as close as Microsoft comes to a real skill, nor is it particularly desirable because of the enterprise resource planning solution, and it came to Microsoft when the resources Microsoft would need to add to produce thou- company acquired Navision. It’s a well-designed product with substantial sands of specific solutions. Microsoft wants partners to development tools. create solutions that meet very specific enterprise and Through the Industry Builder program, Microsoft takes in-house some industry requirements. That’s exactly what Industry applications built by Axapta partners. It reviews partners’ source code and Builder does. tests their applications, and it examines their businesses to ensure that they I don’t want to suggest that Industry Builder is a solu- can back and extend their solutions for the foreseeable future. It then offi- tion for everyone. To be honest, given how much work it is cially certifies and endorses the programs and markets them as Microsoft for both Microsoft and the mere nine partners (as of products for which Microsoft provides support. Any Dynamics partner can August 2006) in the program, it’s clearly not scalable. resell these solutions, and Microsoft field salespeople will promote them. But don’t look at the program; look at its objectives, Perhaps most important, when customers buy these products, they see some of which I’ve outlined above. That can give you Microsoft behind them. Why would the company put this much skin in the some significant clues about how you can improve the game? You can see why when you look more closely at how Industry fit between you and Microsoft. Look at the markets Builder maps partner products to Microsoft priorities. Microsoft wants the most, at the products it’s putting its weight behind and the role it wants partners to play.• These partners give Microsoft a serious foothold in a market the company really, really wants. Microsoft started out as a desktop company, and for its Paul DeGroot ([email protected]) is first 15 years its products made their way into corporate environments an analyst with Directions on Microsoft, a Kirkland, almost by accident. Someone saw a PC, figured WordPerfect or Lotus could Wash.-based independent research firm focused exclu- make his job easier, and paid for it out of the office-supplies budget. sively on Microsoft strategies and technology. PORTRAIT BY SCHNARE JILLIAN 56 Redmond Channel Partner JANUARY 2007 RCPmag.com Project1 12/7/06 9:42 AM Page 1 Is your network open to attack? Only $ for 32495 IPs, $ 2575 for 512 IPs! FIND OUT WITH THE #1 SOLD NETWORK SECURITY SCANNER Network Security Scanner (N.S.S.) GFI LANguard Network Security Scanner (N.S.S.) checks your network for possible security vulnerabilities by scanning your entire network for missing security patches, service packs, open shares, open ports and unused user accounts. With this information you can easily lock down your network against hackers. GFI LANguard N.S.S. can also remotely deploy missing patches and service packs in applications and OS; use it to: Check for unused user accounts on workstations Audit your network for security vulnerabilities (Windows and Linux) Detect unnecessary shares and open ports Check for and deploy missing security patches and service packs (includes multilingual support for Windows) Detect wireless nodes/links and scan for USB devices Detect unauthorized or dangerous software on your network. GFI LANguard N.S.S. ReportPack add-on The GFI LANguard N.S.S. ReportPack is a full-fledged reporting companion to GFI LANguard Network Security Scanner. This reporting package can be scheduled to automatically generate graphical IT-level and management reports based on the data collected during your security scans. Download your FREE trial version from www.gfi.com/rln/ tel: +1 919 379-3397 | fax: +1 919 379 3402 | email: [email protected] | url: www.gfi.com/rln/ Project1 12/5/06 10:42 AM Page 1