LOS ANGELES — July 12, 2011 — More than 15,000 partners at the Microsoft Worldwide Partner Conference 2011 (WPC), currently taking place in Los Angeles, have gathered to discuss business innovation and change — and, more precisely, the change that fuels progress. Much of what’s being discussed this year comes in the form of cloud computing.
While businesses consider the implications and benefits of the cloud, many partners, including value-added resellers and independent software vendors (ISVs), must evolve and transform their business models to thrive among this change.
Over the past 18 years, the Minneapolis-based consulting firm PowerObjects has grown from a humble, two-person operation to a multimillion-dollar company. PowerObjects’ chief operating officer, Jim Sheehan, attributes the company’s prosperity to a number of factors, but one stands out in particular: “The key to our success was that we stopped being everything for everybody and focused on becoming the best at one thing,” says Sheehan. “And that one thing is Microsoft Dynamics CRM.”
While PowerObjects originally began working with the on-premises version of Microsoft Dynamics CRM, the company has been able to successfully transition its business to reselling Microsoft Dynamics CRM Online, the cloud-based solution. “By partnering with Microsoft, we have access to a flexible computing model that lets us ramp up applications that we could never have supported in our own datacenter. Our cloud practice has become a standalone business for us. Because everything happens faster in the cloud, we’re able accelerate the sales process and deliver solutions at a much more rapid pace, while also having more options to solve problems for our customers,” says Sheehan.
PowerObjects is one of many Microsoft partners embracing the cloud. Since the global launch of Microsoft Dynamics CRM Online in January 2011, nearly 50 percent of Microsoft Dynamics CRM partners have committed to selling the online solution, and Microsoft Dynamics CRM customers are now choosing the online version instead of the on-premises option more than 50 percent of the time.
“Making sure the transition to the cloud is smooth for partners is a big priority for Microsoft,” says Doug Kennedy, vice president, Microsoft Dynamics Partners. Recently, executives released the Microsoft Dynamics Cloud Partner Profitability Guide, which gives partners a 36-month roadmap for transitioning to a cloud-based business model. At WPC, an addendum will be incorporated for ISVs, which covers the considerations an ISV should make when transitioning to the cloud and includes sample pricing and licensing models to show the financial impact over a five-year period.
Jim Sheehan, chief operating officer for PowerObjects, says the secret to his company’s success has been narrowing its focus. The company works exclusively in Microsoft Dynamics CRM.
The cloud isn’t the only change partners are embracing. In 2009, the Microsoft Business Solutions group announced changes would be made to its partner network to encourage partners to take full advantage of a steady growth in demand for vertically specific enterprise resource planning and customer relationship management solutions. These changes included new, more robust requirements for partners to achieve Gold and Silver certification and updated Microsoft Dynamics-specific training focused on marketing, sales, project management and solution delivery, in addition to existing technical training. The training is offered through the Microsoft Dynamics Partner Academy and, since July 2010, more than 3,000 partners have been trained at Partner Development Centers located around the world, with an average satisfaction score of 8.02 out of 9.
These adjustments are designed to provide partners with a sustainable model for delivering repeatable solutions to specific industries by increasing their ability to scale and helping them to be more productive.
Kennedy says the dialogue at WPC is centering on these strategies and incentives, as well as on educating partners about what’s yet to be rolled out. For example, beginning Jan. 1, 2012, partners will have the opportunity to receive greater compensation for focusing on vertical specialization — they will be directly rewarded for growth, in addition to total revenue. “By helping our partners transition to a model of delivering vertical solutions, we can help them drive more demand, be more profitable and, ultimately, grow their business,” Kennedy says.
Partners who have started implementing these changes are already reaping the rewards. “The more stringent requirements for Gold certification will help us differentiate ourselves in the marketplace,” says Jeff Geisler, CEO of InterDyn Socius. Socius provides highly customized business management software solutions for the distribution, manufacturing, not-for-profit, professional services, and healthcare and human services industries, with locations in Ohio, Kansas City and California. “Specializing in specific industries means we’re serving the client in a deeper way,” says Geisler. “We now have knowledge not just of the software, but of the clients’ business and messaging process. We’re much more familiar with their industry as a whole.” This approach has resulted in a higher win rate and a more efficient sales process.
“The new Microsoft Partner Network is about refining what Microsoft offers partners, and its program exceeds the offerings of most other vendors,” says Geisler. “We believe that the Microsoft Dynamics partner program will help us continue to improve as our company grows into new areas, such as the cloud. We anticipate the cloud will be a bigger part of our business, and we’re doing a lot of planning around what the cloud will mean for our clients.”
For Microsoft Dynamics partners, these changes amount to new ways of looking at their business and how they’re moving forward. Partners such as PowerObjects and Socius, who have embraced these changes as opportunities, are successfully growing their businesses. “When partners are growing, customers are growing and Microsoft Dynamics is growing,” says Kennedy. “We’re committed to fueling that growth with the right products and resources to ensure our partners are optimized for the future.”