5 Reasons Why Microsoft’s Transformation is Good for the Channel

As more and more Suppliers move towards the channel, they are lessening their resources on direct sales teams. Microsoft’s announcement to restructure its sales team in July 2017 left many Channel Partners wondering about the impact on the channel.
Andrew Pryfogle, our SVP Cloud Transformation, and Tony Safoian, President and CEO of SADA Systems, discussed the announcement before the 2017 Microsoft Inspire event in Washington, DC, and why Microsoft’s transformation is good for the channel:

  • Microsoft is streamlining its Partner and go-to-market teams, leading to a simpler and more direct way to engage with Microsoft in the field on deals.
  • Cloud is transcending traditional market segmentation, leading to bigger wins and more opportunities.
  • Partners will be taking a front and center approach into how the channel helps Microsoft sell into market segments.
  • Microsoft will focus on working with Partners early in engagement and through to a successful deployment, driving value and creating stickier customers.
  • Partners and the strong relationships they build with customers are more valuable than ever.

Watch the video below for more in-depth information on how Microsoft’s transformation will open opportunities for channel partners.

Andrew: Hey everyone. Andrew Pryfogle here in Petaluma. I wanted to jump in the studios here on a Friday afternoon to grab some time with one of the smartest guys that I know in the Microsoft world: Tony Safoian, who is the CEO of SADA Systems. Tony, welcome to the studio on short notice, man.
Tony: Hey, thank you. Pleasure to be here. You can see how I’m doing this from the house. You’re too kind with the intro, by the way. But anything for you. I think the timing is really important around this announcement, especially going up to DC for the big Inspire event. So I think your questions around this could not be more timely.
Andrew: Yeah. Well, good. It is big news. There’s this major restructuring that Microsoft’s announced, and we’ve been getting some questions from Partners and people scratching their heads and wondering, “What does this mean for Microsoft? What does it mean for the channel most importantly?” And we’re doing a lot of business with you guys. I thought I’d go directly to you and get your take. What does this mean for the channel, Tony? Talk about it.
Tony: Well, I do want to say that first and foremost: we don’t know everything yet. There are still details that are percolating up. Some developments of the formal announcements haven’t been made. We hope to learn a lot more after spending the week in DC next week. Certainly that’s our plan. But early indications seem to indicate a couple things.

Streamlined Partner and Go-To-Market Teams

 Tony: So, one is a streamlining of the Partner and go-to-market teams at Microsoft in general–in North America, at least. Probably the world, but we focus on the North American market. And that means a simpler and more direct way to engage with Microsoft in the field, on deals, from a Partner standpoint. So less layers, so to speak, and less complexity in multiple Partner organizations. Where essentially, with Microsoft rolling into single Partner organization, I think that’s a really powerful and smart move on their part.

Cloud is Transcending Market Segmentation

Tony: And the second thing is from a field coverage standpoint. Like the whole industry is going through right now, Microsoft itself is also questioning the approach around market segmentation that’s been so prevalent for so many years. This definition of an SMB customer, what’s a mid-marker customer, what’s a EPG, large accounts customer? As we’re entering the world of cloud, market segmentation just in itself is not always the best indicator of opportunity. We know that cloud deals transcend customer size in terms of employee count. Some of the smaller customers do a lot more business in the cloud than the larger ones today, and I think that is something that Microsoft is realizing.

As Field Coverage Lessens, Partners Take a Front and Center Approach

Tony: So to some degree, they are lessening the field coverage for some size of the customer segment. And to us, that seems to be from the smaller segment up to about 1,000 users. A lot of that work is being moved to an inside sales model out of their Fargo location. And what that means for us, first and foremost, is the role of the Partners is actually being elevated in terms of our involvement, our significance. The role that the customers are going to need us to play, what the market needs us to do, and what Microsoft needs us to do is take more of a front and center approach into how we help Microsoft sell into the segment.
Andrew: Yep. Interesting. So that does seem to be a trend, Tony. A lot of our big Suppliers seem to be moving more and more aggressively towards the channel, lessening their resources on direct sales teams, and it seems like Microsoft is following suit here. I mean this is a really good news story for the channel.
Tony: Absolutely. Google had a similar restructure, consolidating sales organizations, sales teams, thinking about segmentation a little differently. Google went through it also in the beginning of their fiscal year, which was the beginning of the calendar year. So I’m not surprised by this change.

Working with Partners Early Ensures a Successful Implementation

Tony: To me, it just seems that the market is realizing–especially in the world of cloud and the world of consumption economics–where less and less customers are buying software in big chunks for multiple years that are on-premise based software. Whether or not it’s successfully deployed or not didn’t really matter with the economics of the vendors. Now it really does. Therefore, working with Partners as early as possible in engagement and through to a successful deployment, or a series of deployments, is really important because a successful implementation–an implementation that drives values–that is consumed and used is the one that the customers are going to invest more in and not turn off. Versus in the old model of buying where sometimes the investments would sit on the shelf.
Andrew: Yeah. That’s fascinating. Consumption is what it’s all about now. Well, just in closing Tony, what’s a piece of advice you’d give our Partner community right now that sees this news, sees perhaps this big shift towards the channel–what would you tell Sales Partners about the Microsoft opportunity, what they ought to be doing with you guys?

Strong Customer Relationships Built by Partners are More Valuable Than Ever

Tony: Well, I think the onus is going to become more and more on us. I think the value of the channel, of our relationship with Intelisys is also becoming more important because Microsoft can’t really touch all those accounts now–maybe even less so, especially in the sub 1,000 market. They just cannot get close to them, especially physically close to them based on the fact that they’re centralizing cells in Fargo in some ways, right? So you guys, all of our agent Partners out there–2000, 2500 plus, I don’t know how many you have now. You’re growing all the time now, Andrew, but you guys touch those customers every day in a way that we can’t, that Microsoft can’t. Your role becomes bigger.
And of course, SADA’s going to be right by your side to help you. Once you open the door, when we’re in, we can really close these deals together. And in fact, Microsoft’s going to depend on us to do that now more than ever.
Andrew: Yeah. That’s awesome. Very, very cool. Well, that’s exciting, man. Tony, thanks. I know it’s a Friday afternoon. You’re there at your home. And I appreciate you carving out a few minutes to chat with us. This is helpful information. We’ll be sure to get it out to our community and let them know that, hey, release the hounds on Microsoft. We’ve got a huge opportunity in front of us.
Tony: This is our time, Andrew. Very excited. I’m on a plane 6:00 am tomorrow morning, heading to DC. Thanks for the opportunity. Pleasure to join you this afternoon, and hope to see you again soon.
Andrew: All right. And for Partners of ours that are going to be back in DC at the Microsoft Inspire event, make sure you look up SADA Systems. We’re winning big with them right now in the cloud and this recent announcement from Microsoft is going to throw fuel on that fire. So there you go. Good selling, guys.