In Defense of Microsoft

One of the things you eventually have to come to terms with is that business is not always fair. Not everyone gets compensated the same, not everyone gets the treatment they deserve, not everyone gets their fair share of the pie. Sometimes in business, as in life, you have to make difficult decisions that you know will upset the other stakeholders in order to survive and thrive as a business. It’s a business, not a Miss Congeniality contest.

The other day one of the Microsoft Partners got a call from his client asking him whether they should update their contact information with Microsoft. This, in his opinion, constituted an inappropriate contact with the customer meant to cut him out of the trusted relationship with the client to supposedly sell services to the client directly. Here is the content of his response to the big cheese of SMB Australia (wtf? Robbie is not running that thing yet?):

Inese,

I am a Microsoft Partner in Melbourne and just was shown your mail out to Volume Licensing customers sent last week.  This e-mail is being copied to the Melbourne SBS Users group Yahoo list in an effort to rally other MS partners to voice their opinions on this.

I am utterly appalled by Microsoft blatantly trying to gather end customer information in what can only be seen as a conscious effort to cut out your “partners” and directly sell product to the end customer.

On one hand you have your fellow team members telling us Microsoft would never do such a thing and then we see irrefutable evidence to the contrary.  It is imperative that Microsoft immediately cease this attempt to poach sales from the channel and ideally send a letter of apology to those customers who have been contacted for doing so.

From my own experience, the “small” end of the market prefers to work with their IT Providers and the vast majority of my clients have become engaged my services due to being disillusioned with larger providers.  The larger organisations are unable to provide the personalised service that they desire and that they also pride themselves on providing to their own client base.

It is my opinion that this marketing effort is truly misguided and may in the long term damage Microsoft’s reputation with the SMB market.  You have an enormous army working for you with your Partners, regardless of the level.  We may gripe about things such as licensing complexity and such, but they are far less of an issue than what have to deal with LOB application vendors and the likes of HP, Lenovo and other hardware vendors.  You have succeeded in one marketing campaign to raise Microsoft to the very top of the heap of vendors to be wary of.

If this is how you are going to reward your partners for selling Volume Licensing to our client base, I for one will be hesitant to offer this option in future quotes.  Other vendors have tried this type of approach to hijack customers, some have fared better than others.  I hope Microsoft fails miserably with this one.

I would be happy to discuss this further with your organisation if you should so desire to receive input from one of you most important sales sources you have.

Inese, responded (I’ve boldfaced the significant text):

Dear Concerned in Syndey,

Thank you very much for your email raising your concerns with respect to one of our recent marketing initiatives.  And thank you for taking the time to speak with me this morning to help me understand how you came to perceive the communication as an effort to ‘cut out’ partners from the sales process.

For the benefit of the Melbourne SBS User Group copied on your email (and this one in response), I will restate that the intention of the communication you refer to is absolutely in no way a means of enabling direct selling and  by-passing the Partner channel.  In fact quite the contrary.

As a regular part of our sales and marketing programs, Microsoft, like any other vendor, wishes to engage its existing and prospective customers in a meaningful, timely and relevant fashion.  The foundation for being able to do this is the quality of our customer data including some basic details such as correct contact details, number of PCs and the industry the customer operates within.

The communication you refer to below aims to do just this – to update the profiles of these customers to enable a more relevant engagement.

The reason I say that our intention is actually contrary to your assertion that we are aiming to circumvent the Partner channel is that when we are able to market more effectively to our collective customers, we achieve a much better response which in turn drives a higher volume and quality of sales leads to our Partners.

David, as you correctly point out below, our Partners are a strategic asset for Microsoft and we cannot succeed without you!  This initiative will actually benefit our Partners.  This is truly intended as a positive outcome for the Customer, Partner and Microsoft.  We all win with a solid foundation of customer insight.

Thanks again for the feedback.  I hope I was able to allay your concerns and those any others on this email may have.

Best regards.

inese kingsmill l smb director l microsoft australia

 

Ok, so I have to say, Microsoft is right here and I have to say they are entitled to take the action they just took. I would even suggest it is fair. They did not take this information and pass it to another vendor, they did not take your lead and try to close the deal themselves, they did not act like the email was a mistake and an isolated incident, all of which they have done repetitively in the past, they simply tried to open a direct channel of communication with their customer.

Now, I know its going to be a hard fact to swallow that this is their customer, that this company has a direct contract with Microsoft, that they agreed to be in contact with Microsoft.. but those are the brakes. The VAR community cannot expect Microsoft to create, finance and support all these programs meant to educate, grow and manage SMB partners, finance their deals, offer bundles and discounts, and be a completely unrelated and uninterested third party. You cannot have it both ways. If you want it that way, go buy everything as a full packaged product and Microsoft will not know a thing about them.

Truth is, Microsoft signed a contract with your customer and in the eyes of law and god and the flying spaghetti monster this is Microsoft’s client. Microsoft will market to them, invite them to events, offer specials, offer training, offer helpful tips and yes, offer services that directly bypass you.

So Microsoft did the right thing. What you should be more concerned about is the blog post that I wrote the other day and more than 100,000 of you read so far – about how Microsoft is building services to be sold directly to the customer. The services I talked about can still be bought from a partner though, but what about Office Web Workplace, which can only be obtained from Microsoft? Are you programming in corporate firewalls to drop connections to that?

Let me level with you folks, because I’ve been warning you about this for years, participation is not optional. Conferences are important, direct engagement is important and trust is important. You choose to go to Riff Raff festivals and vendor hugfests and you miss out on Steven Ballmer jumping around the stage a mile high and nearly passing while saying that they will compete – as a slide after slide keeps on reinforcing the fact that VARs are irrelevant. Partners are important, but if your primary function is that of a reseller, your days are numbered. If you are not a part of development of that Software + Service you are no longer a partner, you are competition.

Microsoft did not descent from heaven as an angel and won 90%+ of the market by producing excellent products that customers just flocked to. Microsoft did so by ruthlessly competing, sometimes illegally, and designing the software in an all-encompassing way to address all problems, on all scales, for all customers.

We exist, as a business, due to that success. My sincerest hope, as a CEO of a software and services company, is that we are mature and professional enough to compete with Microsoft and use our SWOT to provide better solutions to the client base.

What Microsoft did was just a first step, and if you were wise enough to attend WWPC, you know what steps 2, 3, 4 and 10 are going to be too. Microsoft is turning into a more customer-friendly organization, they are going to serve their customer and just because you were the necessity to get them where they are now, it does not mean your business can survive as the big blue tries to steer its ship in the direction of user-managed computing free of IT complexities. It will be a better, more powerful, more aware company and those that survive to compete and complement those solutions will be sustained businesses of the future. So check the big picture, work on yourself, be aware of where Microsoft is going and adjust.

Oh, or you can get upset and try to fight $30 billion a quarter profit company in its quest to reach your joint customer base until they manage to move them to the web.