It’s not you, it’s us

Microsoft has no intention of leaving the channel behind to engage with SMEs. Honestly.
(Image: Microsoft)

25 January 2019

Billy MacInnesI hate to be curmudgeonly at Microsoft for doing its best to make licensing “easier, more efficient and simpler” for Azure customers and for giving them “a quick, easy and cost-effective way to buy and consume Azure services”. After all, what right do I – does anyone – have to cavil against such a laudable aim? Surely, everyone in the IT supply chain wants to achieve exactly the same outcome?

But behind those smooth words, there are some potentially nasty ramifications for the channel. As the story on this site notes, the new approach, known as the Microsoft Customer Agreement, “removes partners from the buying process in most cases”.

Adding insult to injury, the whole intention of the decision to amputate the channel from the Azure sales chain is, apparently, to increase adoption “among small and mid-size organisations”. That could be seen as threatening to turn the channel into an irrelevance overnight. Let’s not forget that, for the most part, the channel has usually been considered to be the primary mechanism for vendors like Microsoft to sell to small and mid-sized organisations – and to support them.

How many times in the past have we heard vendors extolling the virtues of channel partners who act as trusted advisors to small and medium sized businesses? How often has a channel spokespeople for vendors A, B, C and D said that partners are the best way to get to the SMB and SME market? Not any more it seems.

For its part, Microsoft appears to be trying to take out the transactional part of the equation which, to be fair, is the element that has been most under threat from the adoption of cloud-based products and services. That said, there has been talk during that process of partners providing the expertise in areas such as billing and cost management to help customers with the new cloud-based model. Not any more it would appear because, according to Microsoft, it is now offering customers “sophisticated billing and cost management capabilities and comprehensive subscription and account management features”.

Account management
While this move doesn’t have to be catastrophic for partners, the fact is that it plays directly to the fears of those who warned back in the early days of Office 365 that vendors like Microsoft were pushing partners to move to a subscription model because it would make it so much easier for them to step in and take over the account at a later date.

To those of a paranoid disposition, that seems to be pretty much what’s happening here, at least for Azure. Understandably, Microsoft is keen to stress that partners will continue to offer support and services around Azure. “They’ll continue to provide customers with up-front assistance, offer value-added services and deliver differentiated solutions combined with Microsoft products and services,” it says. “Our partners will be foundational in helping our customers to innovate and thrive.”

To which the obvious retort would be that they already have been – and look where it’s left them.

It’s important not to lose sight of the fact that the main issue here is still “ownership” of the relationship with the customer. It could be argued that Microsoft is merely simplifying things for the channel partner. By eradicating much of the bureaucracy and admin around the most basic element of the relationship, the transaction of the product, the vendor is making it easier for the reseller to concentrate on the more important aspects of the relationship.

And that’s true. It’s also true that the transaction of the product or technology is very important to a vendor because that’s the vendor’s business. A customer can choose not to buy a vendor’s technology and a partner could still supply very similar services based on different technology or products if need be. Vendors don’t have that choice.

But a debate needs to be had and convincing arguments need to be made by vendors in favour of them taking more responsibility for the transaction, otherwise resellers will be alienated by any sudden decision from the vendor to assume ownership of the transaction. It will feel as if the process is being hijacked.

And to return to the question of ownership. It seems obvious that Microsoft needs to reassure partners that ownership of the relationship with the customer is still theirs and not the vendor’s. If they suspect Microsoft is trying to change that, things could get very ugly.

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