It's one thing to report on how IT service providers (ITSPs), including MSPs, CSPs and ISPs, keep evolving. But it's quite another thing to actually help channel partners who read this column to improve their practices, grow their businesses and increase their profitability. Nothing could be more important, more valuable or more compelling to a channel veteran like me.
That's why this instalment of The Evolving MSP begins a new subseries, "The Evolvers." These are companies who make their expertise available to all channel partners to coach, advise and help them develop their businesses. More and more such firms have been emerging over the past few years. Our effort here will be to identify those that have won the respect and appreciation of many of their clients. Those readers who are seeking assistance in growing their business will find great resources in this subseries.
The Microsoft Partner Ecosystem Is Large
Over the years, estimates of how many Microsoft channel partners exist have varied widely. At one point it was estimated there were over 700,000. At another, fewer than 400,000. Most recently, the approximate seems to be 500,000. At one time, there were complaints that many on the roster were not really partners but had applied for partnership to obtain the "Action Pack," which contained free-use versions of all the Microsoft products. That was a long time ago.
Partners who joined the International Association of Microsoft Channel Partners (IAMCP) were considered to be the most committed, best informed and most successful partners in the Microsoft partner ecosystem. While the IAMCP has existed for more than three decades, there are only a few hundred members in this global organization. It is not, however, reasonable to assume that IAMCP members are the best informed or most successful partners; there are many, many others. Perhaps a few thousand out of a half-million!
The Best Objective Any Vendor Ever Assigned
Here's why being among the best informed partners is so important. Early in my career, I attended a Microsoft quarterly partner briefing (QPB) at which a Microsoft manager informed us that we now had a quota to fulfill. This was very surprising to all of us in attendance, and initially of some concern, as well.
That concern disappeared when the presenter said that Microsoft wanted each of us to produce at least $250,000 in services related to Microsoft products. Immediately, some of us realized that was something Microsoft had no way of tracking, and therefore couldn't possibly enforce. Then, the presenter explained, "We want each of you to focus on attracting projects that require Microsoft products, because we know that's the best way to maximize your deal size and profitability."
I will never know how many of my colleagues in that room fully appreciated how progressive and insightful that "quota" was. For me, it was Microsoft expressing how much they wanted to see partners thrive and grow their businesses. It was something I already knew, but this was wonderful reinforcement -- just not yet the best reinforcement.
Sometime later, I found myself in a conversation with then-channel-chief Allison Watson, who told me she was introducing Partner Account Managers (PAMs) to work directly with those partners who, like me, wanted more support. I had previously complained about having no direct contact to work with, and this was her solution. That was impressive enough, but then she said something that I'll never forget: "You see, Howard, we want to see each Microsoft partner get the most they possibly can out of their Microsoft relationship."
This one statement changed my relationship with Microsoft forever.
An Awful Discovery
At subsequent QPBs and Worldwide Partner Conferences (later Inspire conferences), I made the awful discovery that very few, if any, Microsoft partners I spoke with had received Watson's message. Neither did they know that Microsoft wanted them to maximize the value of their relationship, much less how. This is what drove me to join the IAMCP -- to help other partners realize what was available to them and how to obtain it.
Unfortunately, over the next 15 years, I would never feel that I had actually accomplished that to any great extent. I eventually moved on to write for and about the channel -- and that's what brings us here to The Evolving MSP.
In the subsequent conversations I have had with the many Microsoft channel chiefs and other executives, I have found that the intent to see partners get the most out of their Microsoft relationship is still strong in the Microsoft culture. This is great news.
The challenge is still the fact that only a fraction of the partner community knows this, and even fewer know how to actually make it happen. There is a need for guidance -- for someone who has learned how to work with Microsoft productively and efficiently, who understands how to maximize the relationship, and is willing to share that with those partners who understand the opportunity but need help getting there.
Meet 'The Partner Masters'
When I first met Justin Slagle, he was president of the IAMCP Southern California chapter, and I was president of the IAMCP New York chapter. At that time, he was also director of business development for a substantial Microsoft Learning Center Partner. Like me, Slagle deeply understood his Microsoft relationship and worked hard to exchange value with them in the way that most optimized partnerships.
In 2012, he went to work for Cindy Bates, then vice president of U.S. SMB & Distribution at Microsoft, helping to support some 50,000 SMB partners. He was quickly promoted to the Global Partner Solutions Team, where he was able to focus on just 500 partners. "I really, truly love and breathe the Microsoft mission of empower every person and every organization on the planet to achieve more," Slagle tells me, though he adds, "You can't empower partners if you're going from 50,000 to 500. Every year, we were dropping multimillion-dollar licensing partners from Microsoft management."
He relates how many partners messaged him on LinkedIn asking if they could pay him to help them. With five years under his belt as a Microsoft partner and 10 as a Microsoft channel development director, Slagle was ideally suited and more than qualified to provide such services. He approached his direct superior about an idea he and his closest friend, Matt Soseman, had to start a business specifically designed to help these Microsoft partners who were looking to optimize their Microsoft relationships. To his credit, that manager made it easy for Slagle and Soseman to test their idea and prove the concept to themselves.
In the spring of 2023, Slagle and Soseman launched The Partner Masters with a goal of adding two Microsoft partners to their client list every month. By the end of that year, they had added over 100.
You Don't Have to Be a Managed Partner to Enjoy All the Benefits
According to Slagle, what keeps partners from maximizing their partnership with Microsoft is the need to know all the programs that are available and how to take advantage of as many of them as possible. He likens it to tax specialists; any U.S. citizen can download the 5,500-page book on the current tax programs from IRS.gov, but who is really going to do so? Instead, they hire a CPA who has already learned what's in that book and can tell them all they can do to save as much money as possible on their taxes.
The Partner Masters knows the Microsoft version of that book intimately and assures all partners that you don't have to be a managed partner to enjoy all the benefits, including, he says, "Back-end rebates, cybersecurity, investment funds, all those things that are there, but you have to know that they're there, and if you don't, then Microsoft just keeps the profit."
Experience has taught them to go beyond what their Microsoft partner development manager (PDM) does for them. The PDM can inform them of available programs, but The Partner Masters offers the service of doing the execution on those programs to obtain the benefits for the partner.
Slagle describes their work with tremendous enthusiasm. "All you have to do is create an identity for me within your tenant. I'm going to go into Partner Center. I'm going to do all the claims. To do all the claims, I'm going to get the solution designation, I'm going to apply for all the funding for you, and you'll just see the money show up in your bank account. Does that sound fair? That's the big difference." He adds, "We have these managed partners coming to us because they don't have time to do this. We start helping them do all their things, and then all of a sudden, their numbers start skyrocketing."
An Expert at Doing What You Need Done
The greatest value The Partner Masters offers may be in simply knowing everything a Microsoft partner has available to them and how to obtain all of it. Add to that the availability of experts to do everything required to obtain all those benefits. Having lived on both sides of the equation -- as a Microsoft partner and as a manager of Microsoft partners for Microsoft -- I know The Partner Masters has truly mastered what it takes to be a very successful, very profitable partner.
To learn more about The Partner Masters and how they can help you enjoy greater return on your investment in your Microsoft relationship, contact sales@thepartnermasters.com.
Posted by Howard M. Cohen on May 01, 20250 comments
The newly christened Global Technology Industry Association (GTIA), formerly part of CompTIA, held their Communities & Councils Forum (CCF) from earlier this month in the beautiful city of Chicago. There are currently six advisory councils composed of members serving as advocates and educators to accelerate adoption of technology solutions. They are:
- Artificial Intelligence
- Channel Development
- Data
- Internet of Things (IoT)
- SaaS Ecosystem
- Workforce
In addition, several interest groups were highlighted at CCF:
- Diversity, Equity, and Inclusion (DEI) Interest Group
- Managed Services Interest Group
- CyberSecurity Interest Group
- Advancing Women in Technology (AWIT)
Taken together, GTIA members have a broad selection of resources and areas in which to focus.
An Unprecedented Opportunity
The most striking thing about this event was the incredible enthusiasm of everyone in the room. There was lively conversation everywhere, much laughter, and a great deal of intensity at every presentation and every group meeting. Why are these people so enthusiastic?
The GTIA was created when the CompTIA brand of technology education products and programs were sold to Thoma Bravo and H.I.G. CompTIA will continue to operate, though now as a for-profit company.
GTIA was created from the industry trade association side of CompTIA. Based on the regulations governing how a nonprofit can sell of part of itself, an endowment was created to fund GTIA's annual budget.
The thing is, that endowment is enormous -- probably enough to fund GTIA in perpetuity. To hint at the enormity, it was announced at CCF that the philanthropic program at the former CompTIA had given $150,000 to worthy charities last year. This year, however, GTIA plans to triple that: $450,000 to charities. If you can afford to give away almost a half-million, you should be able to fund operations on the interest that principle will earn.
Why That's Important to You
Based on this endowment, GTIA never has to invest a moment in raising funds of any kind in any way. This means that 100 percent of the energy and talent embodied in this association will be focused on benefitting the IT channel -- you, the members.
That could be great, or it could be totally wasted. It all depends on who from our channel becomes involved in the organization. Looking at the councils and interest groups alone, it's clear there are many ways that anyone who wants to can get a lot out of putting in a lot.
A Leadership Example
Tracy Pound is the current chairperson of the member Board of Directors of GTIA. Her own ascent to that position tells a great deal about the opportunities awaiting GTIA members. As Tracy explained, "GTIA is a membership organization, and therefore is owned by its members. The board is representative of the membership of the trade association."
She went on to add, "The role of the board is to set strategy, and the role of the staff is then to execute on that strategy."
The staff she is referring to are the employees of the organization, most of whom moved along with CompTIA as it became a for-profit company.
Several years ago, I polled a large number of CompTIA members to ask them who actually ran CompTIA. Most replied that Todd Thibodeaux was in charge. I then pointed out that there was a member board of directors and asked who that was. Nobody knew. Thibodeaux was in charge of a large staff composed of people who had never worked in the IT channel. How could they be expected to direct and guide it?
At that time, the Chairman of the Board of Directors was M.J. Shoer who today has been hired by the organization and is working as Chief Community Officer. At this most recent CCF, I asked a few people who was in charge of GTIA. Most replied that Shoer was in charge, but only until a new CEO is hired. Shoer, who was an excellent board chairman, is also an excellent leader with infectious enthusiasm, a welcoming disposition and long experience working in our industry.
But nobody named Tracy Pound, despite her being the chair of the board. She absolutely sees that changing in the new organization.
Pound spoke of creating a clear route for every member to participate in leading the direction of GTIA. Regarding her own experience, she explained, "I count myself very lucky, because I have literally come up through that membership route. I started as a member of CompTIA. Back in 2012 I became part of the education faculty, and so I delivered and managed channel training. I would go and talk about our research at vendor events, at disti events and the like."
She continued, "I joined the UK Executive Council. From that I got noticed by people on the board and was asked to join the board." She completed the story by emphasizing, "I love the mission that we have, which is to be more professional in our industry, to add value to MSPs, to the channel. To help people grow their businesses, to learn more, to be better."
Regarding making members more aware of the role of the board of directors, Pound was very explicit. "There should be more presence so people know who the board are, and there are plans afoot to make the board more visible. We're going forward with a singular focus. It means that we're going to have people who are directly relevant to the channel, who can add value."
She then hinted at another more personal value available to those who seek leadership in GTIA. Regarding her own activities as chair, Pound said, "I speak at most ChannelComs [the annual GTIA conference]. I also speak at local events. I was in Benelux a few weeks ago on stage there. I'm going to be on stage in Ireland tomorrow. Then I'm going to Australia in September to do some training on managing the channel timed with a community event."
Regarding the Opportunity
"This is a once-in-a-lifetime opportunity to transition to a trade association that can truly be a support to people in the channel," Pound explained, "and we have to get that right. So, listening to members, we've done some town halls where we've taken a lot of questions in all the different regions, in different time zones to understand what concerns they have, what questions they have, what asks they have of the association.
"And we've taken that all in now. Timing is an interesting thing, as well, because we don't have a CEO at the moment, and that CEO selection process is nearing its end. We hopefully should have a CEO in place to start May 1. When we've got that kind of proper liaison point, it will make things an awful lot easier."
An Important Conclusion You Should Consider Carefully
The perpetual funding of the organization presents, in and of itself, wonderful opportunities.
There's also the fact that both the board of directors and the staff are mainly composed of people who come from the IT channel. This makes many conversations much easier and holds the promise of much faster progress. There's a reason the attendees at CCF were all so enthusiastic. It has a great deal to do with the amazing opportunities and with how the leadership is taking shape.
Regular readers of this column know that I have always been an advocate of participating in channel communities because they bring so much value to members. They certainly have over the years for me. I seriously recommend that you visit http://gtia.org to learn how you can join in and enjoy some of that value.
Posted by Howard M. Cohen on March 31, 20250 comments
Many think the statement, "Every company is a software company," was first said by Satya Nadella. However, he was quoting Watts S. Humphrey, widely considered "the father of software quality," from his 2001 book Winning With Software: An Executive Strategy.
It's never been a mystery that great software drives all computing. When IBM first introduced its IBM PC in 1981, it made sure to publish the popular VisiCalc software under its own label. This is the software that launched Apple Computer's first success. For hardware sales to grow, you needed software sales to grow.
It took very little time for the available gross margin on hardware or software sales to evaporate. The IT reseller channel itself was to blame for its own greatest problem. By discounting heavily as their only competitive strategy, the lowest of the channel made it a race to the bottom. As a result, any software channel representative who told you about the high margins you could get on their software was laughed out of your office. It wasn't even 1990 yet and there were no margins to be achieved on most any computer product.
By the way, this is the reason that most of you first became managed service providers!
Software Developers Become Enablers: The Toolsmith Method
The transition of most channel partners from the reseller model to the MSP model was not lost on software developers. They quickly realized that MSPs would benefit mightily if they could provide them with products around which they could wrap their services, which always generated much higher margins than products ever could.
What they used was actually an older process wherein some software companies sold what they called a "consultant's license," which would allow a service provider to license their software for use on behalf of a specific customer. Servicers purchased another license for each customer they used the software with, but the customer seldom if ever knew anything about the software. They just knew they were enjoying the services consistently.
Enterprising software developers began proactively offering consultant's licenses to more and more of their channel partners who very innovatively created new services and even whole new categories of services that simply called for them to transparently use a vendor's product to provide it. Since they were service sales, not product sales, there was no way customers could "price out" the offering, so the margins remained healthy. I have long referred to this as the "toolsmith" model.
The Early Toolsmiths
The first wave of vendors to embrace this new model were those who made and infrastructure management products such as remote monitoring and management (RMM) platforms, virtual device infrastructure (VDI) and security providers. An MSP could contract to use their software to run those services and enjoy the bonus of having the software developer to support them.
Utility software came next, including migration tools, optimization, high-availability and more defined security tools. Then came the PSA. Professional service automation software shifted to a posture in which it became significantly more critical to MSP businesses who ran their entire business on the platform.
Hardware Vendors Step Up
To show how far down the market this can reach, there's a maker of robot vacuum cleaners that offers a subscription model. Their customer gets a new unit and whatever parts the unit tells home base it needs. Periodically, they take the unit back and provide a brand-new model. The customer isn't buying the hardware; they're just leasing the use of it with an unlimited allowance of parts and consumables.
Why not do the same thing with servers? Why not do the same thing with firewalls? Why not make whole network operations centers (NOCs) and security operations centers (SOCs) available by subscription? Today's vendors go ever further, offering the assistance and support of their professional engineers to help the MSP deliver a broader, more solid set of services.
Today's MSP needs fewer professional personnel and more diverse vendor partnerships to be successful. They can outsource most of the services to toolsmiths, keeping enough of their own people on board to maintain a continuous customer presence, and simply sell and provision the software, hardware and services they obtain from vendor partners. And here you thought vendors wouldn't love you anymore.
The Future of Your Business
So, good news: Hardware and software vendors will be the enablers of your business going forward. They will be heavily incented not just to get you to sell for them, but also to assure that customers enjoy great success using their wares. That is all goodness -- and it's how you should be talking with them from now on.
Also, growing your business will become, at least in part, a function of finding new and innovative technologies to wrap your services around. Don't look now, but that sounds like you're going to have a lot of fun.
Posted by Howard M. Cohen on March 10, 20250 comments
Are you evolving as a partner? Are we, as a channel, evolving? When we decided to change this column's name a few years ago from "The Changing Channel" to "The Evolving MSP," it was meant to recognize that the channel had changed sufficiently and that "resellers," "VARs" and others had been pretty broadly replaced by managed service providers (MSPs). Just as the original name was meant to emphasize that "changing" was a key characteristic of the channel, the new name was meant to emphasize that "evolving" is what every MSP needed to do, and keep doing from now on. Evolve or vanish.
As we begin a new year, I thought it would serve to discuss evolution, with a big focus on how we want to evolve and why. From the beginning, we talked about partner specialization. Instead of being generalists, we would focus on determining and pursuing superiority in a specialty. Cloud service providers (CSPs) and Internet service providers (ISPs) were already out there, but how about data service providers, Internet-of-things service providers, storage service providers, messaging service providers, ad infinitum? The list is as long as your imagination.
Fifteen years ago, Microsoft made it clear it wanted all partners to declare their specialty to offer to customers, and plan to partner for whatever else was needed. At that time, partners with as few as a dozen or so employees could hold all of the 30 then-available Gold Certifications if they had four techs who were particularly good at taking tests. Many small partner companies fell into the trap of trying to be all things to all people.
Then Microsoft introduced the "exclusivity rule." Any four techs could only take and pass tests for one Gold Certification and no more. If a partner company wanted to hold all 30 Gold Certifications, they would need to have a tech staff of at least 120 people. It changed the game. Many partners have since seen the wisdom of that strategy and have worked to specialize in any of a number of specific disciplines.
Rising Above the MSP Morass
Since that time, the nature of the channel has changed again. Many "resellers" determined that their future lay in upping their game. They started having their teams take much more advanced training, hired higher-level people and developed formal methodology. They recast themselves as professionals.
Many of those people are now viewed as peers of the lawyers, accountants and other professionals that businesses turn to for critical services; IT is now seen as being every bit as business-critical as law, finance or any other professional service.
Others decided to call themselves MSPs. They had MSP crash-imprinted on their business cards. They turned "MSP" into something that business executives were advised to avoid by CISA, the FBI, the New York Times and others. They muddied the waters for everyone else.
So how are the partners who made the investments supposed to distinguish themselves from these pretenders? Some work to do it by stepping up the quality of their marketing. Others remain focused on promoting themselves through their personal networks. Many are banding together to figure that out.
The Channel Community
I'm a big advocate of channel communities and what they bring to each of us.
Decades ago, I joined the cleverly named Association of Better Computer Dealers (ABCD). Many of us did. We encountered great advice, best practices and many vendors clamoring for our attention. Later, that organization was renamed The Computer Technology Industry Association (CompTIA). I've written recently in this column about that association and I'm now bringing it up again because there have been huge changes -- and each of you needs to figure out how much, if anything, you want from this new organization, and how much you want to participate.
The training and certifications parts of CompTIA and the brand have been sold to Thoma Bravo, which in return created an endowment for the remaining group that serves the channel. That group has now renamed itself the Global Technology Industry Association (GTIA).
The beginning of anything is a great time to become involved with it, if you feel it's worth your while. Right now, GTIA has its member board of directors and several executives in place. They are seeking a new CEO. Imagine having an association that never has to do any fundraising and how free it would be to really benefit its members. That is what GTIA is.
As of this writing, I haven’t seen any information about how GTIA will be restructured, or if that is even being discussed. If it were to default to something resembling what that side of the organization looked like previously, that would be an unfortunate waste of an opportunity. So if you've ever thought about joining any of the many organizations supporting the channel community, now is a great time to consider GTIA and bring your voice to the direction of our community.
Now Is the Time
GTIA includes the word "industry" in its name and has said it is a "trade" association. I beg to differ. A trade association promotes the sale and purchase of products; an industry manufactures them. To properly support our community, GTIA needs to be a professional association promoting and supporting professional practices, conduct, ethics and more among our colleagues.
That's as much as I will contribute to conversation at this point, but it would be great to hear from you. What would you want from this association? How would you like to see it directed? What are you willing to bring to it? What do you want it to bring to you?
My strongest suggestion is that you get connected to GTIA now, at the start. Raise your voice in support of yourself, your business and your colleagues.
If you'd like to discuss further with me, please email me at hmc@howardmcohen.com. I look forward to hearing from you.
Posted by Howard M. Cohen on January 29, 20250 comments
In March on this blog, I asked, "What's Going On at CompTIA?" I ended by saying, "I'm hoping some of the heroes who serve on the board will reply to this and tell me just how wrong I am."
To his credit, CompTIA Chief Community Officer M.J. Shoer did take the time to reach out to me and we discussed my concerns at length. He pointed out that the results of one of CompTIA's recent surveys found that 85 percent of its members refer to themselves as an "MSP."
To which I asked, "How many of them are lying?"
It wasn't an idle question. I think many of you will agree that there are many former resellers now calling themselves "MSP" without doing anything to transform their business. In fact, they may currently represent the majority of companies calling themselves "MSP." This gives rise to federal agencies and major news outlets warning people to steer clear of anyone calling themselves an "MSP." Not good.
All Heck Breaks Loose
Several years ago, I privately commented to a friend that CompTIA's training and certification business was so successful that it would have to be sold off as a for-profit entity someday.
I didn't foresee that last month's sale of CompTIA's brand and services to Thoma Bravo would result in the creation of an enormous endowment that would fund the operation of the member association side of the organization basically forever. That could be a great outcome, or it could not.
Nor did I foresee that such a sale would raise such a furor. I suspect the ruckus was driven by the quality of the initial announcements, which left plenty of room for speculation and imagination.
What's Next?
There have already been several articles asking who should be the next leader of the new (as yet not renamed) association formerly known as CompTIA. I won't wander into that fray, but I do have some thoughts on what is needed more than who.
First, shedding CompTIA is a good thing for a premier channel association. Our channel is not simply about "computers" anymore and we are quickly morphing from being an "industry" to being a profession -- at least, those who really invested in truly becoming MSPs are. The renamed resellers are just squalling.
In his explanation of the announcement, Shoer pointed out that what is left will be the "trade association" of the computer industry. This is where we diverge. The truly professional service providers I know in this industry are not concerned with "trade." They're concerned with providing excellent services in return for a reasonable fee. What is left of the association formerly known as CompTIA still seems fixated on the products that our professionals integrate into the solutions they provide to customers.
It's like saying that the medical industry consists of doctors who sell pharmaceuticals and prosthetics. They certainly use those items in their practices, but they're not the point. The services are.
Right now, MSP "organizations" are springing up like weeds all over social media, and the fact that our community members are banding together bodes well for everyone. But armed with this wonderful endowment, what was CompTIA should now become the premier professional association for IT practitioners who want to partner together on projects, learn from each other, and grow a powerful profession from our channel.
The new leader of that organization should be someone who knows IT services, perhaps someone who has already built one or more IT service practices successfully in the past. Someone who appreciates the challenges MSPs face, having faced them him or herself.
For my part, I hope it is someone who truly understands and appreciates the sacred heart of partnering. The best success strategy for IT service providers going forward will be to specialize, to focus on one thing they do really well and partner for the rest. We've seen it work in medicine. It will work for our profession, as well.
Witness the Success of Women in Tech
For insight into where the association formerly known as CompTIA should go, we need only to look at the dozens of large organizations that serve the needs of women in technology. Some have tens of thousands of members. Even the smaller ones enjoy the love and loyalty of their members for the value they convey.
I have spent considerable time and effort encouraging the leaders of many of the Women in Technology groups to band together to increase their overall membership numbers so they can speak with an even louder voice. I must report that I have been, so far, quite unsuccessful. My impression, though there is no testosterone involved, is that leadership competitiveness in young organizations has prevented that amalgamation from occurring as yet. I strongly believe that ultimately it will.
Whoever is leading the charge to identify new leadership and create new structure for the newly independent organization should consult with these brilliant leaders and involve them in the selection process. Our profession needs as much leadership as it can find to take it through the intensive growth motions we must perform, like increased education, accreditation, professional licensing and more.
It could end up that the acquisition endowed more than just a fund. It could endow a thriving new profession.
Posted by Howard M. Cohen on December 19, 20240 comments
Those who believe that the goal of every MSP is to become an MSSP are completely missing the mark. Those who believe partners are not to be trusted do not know how to partner properly. And those who believe they need to be all things to all people are out of their minds, and doomed to failure.
Partner-to-partner (P2P) partnering has been a major element of the Microsoft partner ecosystem since time immemorial. In 2009, Microsoft all but forced partners to declare their specialties or hire a whole lot more people to continue to qualify for more of them. Partners saw the sense in partnering with other teams whose expertise was not the same as their own.
Several years ago, the demand for data and network security services became undeniably clear. Soon, some MSPs began to refer to themselves as MSSPs, managed security service providers. Industry publications seized upon this and began delivering publications specifically devoted to MSSPs.
As with so many things in the channel, MSSP became the latest rage. Everybody wanted to become an MSSP. Well, not everyone. There were many MSPs who had long ago specialized on what they did best, and were uninterested in distracting themselves from that.
Some providers of security products observed this and offered a better solution: Encouraging their MSP partners to partner more enthusiastically with MSSPs who had proven their expertise in the security space. This is great advice. While it seems attractive to "go with the flow" and dive headlong into the security space, it may not fit your existing business model. It may distract you from the investments you need to make to grow your business. On the other hand, a well-evaluated, trustworthy partner can deliver services while you enjoy a slightly diminished profit margin that's offset by the absence of additional costs.
This same logic can be applied to any technology service you don't provide. There are recognized channel experts in storage, servers, datacenter management, ERP and other major software, and any other discipline you can think of. Joining the many associations that serve our community may help you find excellent partners. Also, many consultants are presenting themselves as "partnering experts" or coaches. Check them out.
The New Vendor-Partner Challenge
If you're reading this column, you are likely a partner that has bet the ranch on Microsoft. With other vendors, though, certainty has become elusive.
In the past, you partnered with a vendor because you were confident you could sell a large quantity of their products. You took their training, earned their certifications, and if indeed you did sell large quantities, they showered attention upon you.
As margins evaporated due to competitive discounting, you shifted toward dependence on your own services to generate your profits. In some cases, you outsourced product procurement, preferring to not extend credit to customers or encumber credit from suppliers, and you realized that any slight profit that might remain would be consumed by operating and logistic costs. As your volume of sales disappeared, so did many of your vendor reps who now needed to focus on those few resellers who were still actively and proactively pushing their products out to customers.
Today, when you look at a potential vendor-partner, you no longer look to them to produce any margin for you. That's become a fantasy. So, what do you look for?
Look for vendor-partners who recognize the value you bring in pulling sales of their products through with the projects and programs customers engage you for. This is not new. Way back, many vendors paid "influencer rewards" to the partner who actually sold the project, even if the customer bought the product elsewhere. Now, their buying elsewhere is a given, so you want vendor-partners who recognize and appreciate you as the driver of projects that pull through their products.
Hint: I sold my first Microsoft product in 1981. They have always focused on partners whose services and expertise pull sales through. That's one of the reasons you partner with them so enthusiastically. There are others.
Posted by Howard M. Cohen on September 25, 20240 comments
The recent CrowdStrike/Microsoft outage raises an issue that all technology service providers should consider carefully: Are we doing enough for our clients?
Blend into that thought the dark, underlying vulnerability lurking beneath the wave of AI: the issue of copyright infringement.
As technology continues to become an even greater proportion of how we all go to business, it will invariably also become a larger component of our legal exposure. The question we must ask ourselves is what role we play in this development and its consequences.
You Can't Be All Things to All People
The age of the generalist MSP is fading fast. It's simply too difficult and too costly to maintain technical supremacy in too many disciplines. As with medicine, the "primary care physicians" are being outnumbered by all manner of specialists. Storage specialists, server specialists, network specialists, DevOps, agile and other methodologies.
Back in 2009, Microsoft made a bold statement when it introduced the "exclusivity rule" in the then-new Microsoft Partner Network (MPN). Previously, a Microsoft partner could have the same four people take all the tests for as many competencies as it wanted. In the MPN era, however, to achieve a Gold competency, four unique individuals must take and pass the required tests. Those four cannot be used to qualify for any other competencies. Back then, I was working in a company of 17 people, and we held all 30 competencies. To continue that in the MPN, we would need 120 employees.
The most important impact of this was it forced us to partner with other Microsoft partners to deliver larger projects requiring multiple competencies. The end result? You couldn't be all things to all people, but you could provide all things through partnering.
Now You Need to Provide More
When I launched my first Substack, I titled it, "The Business Technologist's Journal." I have long seen the role that partners play evolving into the "business technologist," the person who applies IT products, services and techniques to solve business challenges. I truly feel this title best describes the role we play.
Here in "The Evolving MSP" (and its predecessor, "The Changing Channel"), we have long discussed the "technology" dimension of that role. Now, however, I believe the next evolution we must go through exists far more on the "business" side.
Anyone who has pursued any vertical market will find what I'm saying here familiar and resonant. Vertical market success requires more than just technological acumen; it requires a deeper understanding and appreciation of the business and operation requirements of that vertical. If you're selling into healthcare, you must know what healthcare organizations are facing in their business. You must be able to appreciate and discuss the operational requirements in a hospital or other medical practice. Same with legal, financial or any other vertical market you choose.
Now, with technology playing a more pronounced role, service providers are realizing they need to be able to provide valid legal advice to their clients regarding the consequences of an outage such as that caused by CrowdStrike, as well as the legal ramifications of building large language models (LLMs) that include potentially copyrighted materials.
It's most important to remember that you are not a lawyer (unless you are). Fortunately, you are well-versed in proactive partnering, which should make it easier for you to research, vet and form a partnership with a well-qualified licensed attorney who can provide legal advice to your clients. It is likely you have already founded such a relationship with accountants and other professionals to whom you refer your clients when necessary.
Basically, you must now expand your project management function to include more disciplines, some beyond technology, to fully serve your clients.
The New P2P
Microsoft partners are very familiar with the acronym "P2P," which promotes very active "partner-to-partner" partnering.
To fully serve today's client, we must now change that acronym to mean "professional-to-professional" partnering. Beyond the ability to more fully serve clients, this strategy brings additional potential.
In the past, some chapters of the International Association of Microsoft Channel Partners (IAMCP) created small partner groups. One chapter called them the "Fantastic Fives." These groups contained members holding various different and complementary competencies. Beyond partnering on projects, these groups went to market together, sharing customers with each other and helping grow each other's businesses.
Such a group today, in the age of "professional-to-professional" partnering, might include you and your technology expertise, a law firm, an accounting firm, an engineering firm, an architectural firm and perhaps even a marketing firm, all working together to share opportunities, share clients and grow each other's businesses even further.
Evolving
This next stage of evolution will find you developing a greater ability to provide a full spectrum of business services. While you remain focused on applying technologies to customers' operational and other challenges, your community of colleagues will be available for you to refer in as needed. More and more, you will be seen on par with these professionals.
As your breadth expands, you may want to invest some time considering how you regard your own practice, and how you refer to it. More and more of us are shifting from MSP, which becomes more limiting, to a more specific acronym, or even the much broader, more generic "information technology service provider" (ITSP).
More important than what you call yourself is how you think about yourself and your practice. Professional is as professional does. Look at your own processes, especially client-facing ones. Do you consider them to be as professional as you want people to see them as?
Please also consider responding to this article and share with everyone what you think makes you a professional. Not only are we evolving, but our entire industry is.
Posted by Howard M. Cohen on August 27, 20240 comments
Earlier today, I received an e-mail from Microsoft Copilot. What grabbed me about the e-mail was not who it was from, but its subject line: "Built to do the impossible." When I opened the e-mail, the headline that jumped out at me was similarly bold: "A new AI era begins."
Wanting to learn more, I started surveying everything Microsoft has put online recently about Copilot. I was intrigued to find still more audacious claims, including:
- "A new era of innovation!"
- "A whole new way of working!"
- "It will unleash creativity, unlock productivity, and uplevel skills."
- "70% of people would delegate as much as possible to AI to lessen their workloads!"
Are your expectations set high enough yet?
The Promises Stage
Those of us who have been around long enough remember earlier Microsoft "big bets" -- Azure, Lync, SharePoint, BPOS, Dynamics and even "The Cloud" -- know that, eventually, Microsoft will spend enough to make sure that this particular bet lands well. We are now at what I like to refer to as "the promises stage." Microsoft is promising the sun, the moon and the stars -- and many, many others are joining in the chorus.
When you read more closely, it seems like the primary applications for Copilot are "search on steroids," plagiarism, e-mails written for you, and photos of you that are so nicely enhanced you might consider posting them on dating sites. You can also create illustrations of wild imaginings, or frighteningly real "deep fakes" showing people doing things they would never actually do.
Making matters worse, Microsoft finds itself besieged by an enormous early adopter user base that just wants more and more. Mobile phones took 16 years from introduction to get to 100 million users, plenty of time to figure out how best to use these new devices. The Internet took only seven years (thought exactly when the clock for this particular technology started is debatable), Facebook 4.5 years and generative AI...three months.
Three months, barely the blink of an eye in tech terms. People had plenty of time to figure out all those other advances, but for generative AI, they just went straight to liftoff.
What the World Needs Now: Practicality
The fact is that we in the channel all learned long ago what is required for the successful launch of any new technology: practical applications. What will the new thing do for us? How do we wrest value out of it? How will it improve our user experience, our employee experience, our customer experience?
The first thing I think the world needs to do right now is to chill out. Everybody from Bill Gates to Elon Musk to my barber is talking about how AI will eventually become superintelligent, and then it's, "Watch out, human race."
My response is really simple, and something we all learned long ago. Computers can do many things, but one thing they cannot do is generate a truly random number. By extension, it seems to me they won't be capable of random thoughts, either, or anything resembling true creativity that isn't sourced from something somebody else did that resembles what they've been asked to do. For AI, everything truly is derivative.
The other really great news is that there are some deep-thinking people out there who are actually producing valuable, practical applications for generative AI. Last summer, we presented a case study here in The Evolving MSP about CrushBank and how it leveraged its own 40 years in the IT channel, combined it with its extensive study of generative AI and IBM watsonx, and produced a technical assistant that could reduce the time it takes to resolve an IT problem by rapidly finding documentation, instructions and whatever else a tech needed to effect repairs. The company also devised a virtual help desk agent that answers user calls and provides useful advice. Practical on all fronts!
Educators are finding wonderful ways to apply generative AI to curriculum and materials development, lesson planning and even interactive activities. Doctors are receiving help from robotic assistants that can quickly retrieve patient details, display previous scans and more. Even the folks in sales and marketing are saving time and accelerating sales using recommender engines that compare their company's social media-augmented database of insights and information about their customers with a highly detailed database of all their product and services offerings. The AI figures out which products or services would be most desirable to each customer and sends them the appropriate marketing material. It then informs the appropriate salesperson for each customer about what was sent, enabling them to quickly follow up.
Of Adoption and Acceptance
Every software development project is best measured by its rate and degree of adoption. Three months to 100 million users is a definite vote in favor of the "success" of AI. By engaging in such massive, overt hyperbole, Microsoft is challenging its own customers to take it seriously in its approach to Copilot. It would be all too easy for this "big bet" to fall flat on its face, which could indeed be an existential event.
For comfort, let's close with the wisdom of Geoffrey Hinton, the "godfather of AI," who said, "In science, you can say things that seem crazy, but in the long run, they can turn out to be right. We can get really good evidence, and in the end, the community will come around."
(It's worth noting, though, that Hinton also quoted the Rev. Martin Luther King Jr., who said, "Our scientific power has outrun our spiritual power. We have guided missiles and misguided men.")
Posted by Howard M. Cohen on June 20, 20240 comments
Regular readers may remember that this column was called "The Changing Channel" until 2017 when it became apparent, at least to me, that the channel had changed, and many things would need to be redefined as the new generation of managed service providers (MSP) began to evolve.
One of those changes was in how MSPs would need to market themselves and their practices similarly to other professionals -- lawyers, accountants, architects, etc. After all, their businesses are now all about marketing and selling their own services to their customers rather than leading with the products as they had when they were resellers. Postcards, posts, fax blasts and highly-designed e-mails were all becoming things of the past. Networking, professional referrals, speaking engagements and other professional promotion processes will prevail.
The Role of Channel Citizens
For the 40-plus years that I've been a proud citizen of the channel, I've observed that everyone who operates or works at a channel company has chosen a specific level of participation -- i.e., the degree of citizenship they are comfortable with. At one end of the spectrum are those who don't pay any attention to the existence of any "channel." They run their business in isolation and fend for themselves. At the other end are those who show up at every industry show and post endlessly on social media.
I have also proudly served on the boards and steering committees of many of the associations that serve our community. Given the impossibility of mentioning all of them, I will mention none of them here. Suffice it to say, with full transparency, that I respect all of them for their desire to be of service to their communities.
This particular post is primarily addressed to those who may not have yet experienced the value of being a participating citizen of the channel. It's about what there is to gain by giving of yourself to your community and being a truly participant channel citizen.
First and Foremost: Friends
As a channel executive for over 30 years and as a writer for and about the channel for the past 15, my most valuable asset, my greatest resource and the most rewarding value of my long channel citizenship has been my large community of friends. They're wonderful people -- smart, insightful, caring, passionate about their work. It is truly my greatest joy to know and speak with them regularly. I continue to learn so much from them, and I owe all of them any measure of success I have achieved here.
And it is those friendships that are the source of literally everything else, from opportunities to work on amazing projects, to access to extraordinary technologies and intriguing customers, and so much more. They are sources for deeper learning about not only technologies, but also human interactions, marketing and selling strategies, and human-machine and machine-machine relationships.
There has not been a moment in the past 44 years that I haven't felt myself learning and growing. Nothing I can think of beats that.
Living a Life of Service to Others
Anyone who enters any service industry acknowledges their own desire to live a life of service to others, most of all their customers.
But there is also an unbelievable return from serving the channel community that has raised and nurtured me for all my career. Every moment I have invested in serving on councils, participating in programs, attending events, presenting, writing, teaching, consulting and advising my colleagues has paid back incredible dividends to me, including opportunities, recognition and the sincere appreciation of those I have helped along the way.
This is why I live by the credo that appears on all my marketing materials and e-mails: "The more good you do for more people, the more good finds its way back around to you."
If you have not availed yourself of the partnership, allyship and allegiance of the channel community yet, I strongly encourage you to seek out channel organizations that feel right for you and join them. Give to your channel and watch it give back in ways you never dreamed of.
Posted by Howard M. Cohen on April 25, 20240 comments
Longtime readers of The Evolving MSP will remember that I spent considerable time (and love, blood, sweat and tears) with the International Association of Microsoft Channel Partners (IAMCP). The IAMCP's biggest challenge was the fact that it's an all-volunteer organization; everybody there also had a full-time job in a company in our very, very busy channel.
CompTIA was a different story. I also have history with CompTIA, first joining in the Dark Ages when it was still called the Association of Better Computer Dealers (yes, the ABCD). While I turned my attention to IAMCP, ABCD grew up and became the CompTIA, hired an executive director and built a staff that, over the years, became larger and larger. CompTIA delivered extraordinary value to the channel in the form of curricula and training syllabi used to certify our technicians and engineers -- so extraordinary that organizations like the U.S. Department of Defense require the CompTIA Network+ certification of anyone applying for work there.
As the Channel Evolved, Did CompTIA?
In 2017, we changed the name of this column from "The Changing Channel" to "The Evolving MSP." By then, the channel had gotten far enough along in its transition that we could accurately say that it had changed. In fact, I've suggested that there's now a new "techchannel" that no longer describes a process that moves products from manufacturer to distribution to reseller to customer, but rather a services community that delivers high-value technology services to customers. Products have become an enabler and their manufacturers a support resource.
A high-ranking executive at CompTIA once explained to me that CompTIA is a "trade association." This spoke volumes to me regarding its priorities. Read: vendors.
As a result, to this day, CompTIA continues to provide a platform for vendors to gain access to its members. It also provides validation, resources and funding. As such, I maintain that CompTIA is an association of resellers, not necessarily service providers -- and managed service providers (MSPs), the tip of the spear of our industry, are underserved by it.
But Wait! There's Less
In July 2023, CompTIA added a chief revenue officer. This struck me as odd: How does a nonprofit association require a chief revenue officer? The job boards didn't have many associations seeking CROs, but I thought, "Well, the revenue has certainly helped grow the association, so it's probably a good thing."
Word on the street, however, was that several senior-ranking vice presidents have suddenly been terminated at CompTIA, all of whom were central to CompTIA's core purpose of bringing quality and value to the industry. While none could be characterized as being directly revenue-producing, all produced the kind of value that attracts more members to the association. And members bring strength, a louder voice in industry and more revenue.
Even the staff people I talk with at CompTIA seem different. Where once they seemed inspired and mission-driven, today they are fulfilling a function. Doing a job.
My impression is that the sudden reduction in force will reduce the value CompTIA brings to growing the community, erode the support for those who wish to enter it, more thoroughly mute the voice of the channel community and continue the march of CompTIA becoming more of a business and less of an association.
My 'Guessessment'
What follows is not based on any direct knowledge nor on input from any of the directors or executives at CompTIA. Rather, it's based on an evaluation of the currently available facts.
When does an organization increase focus on revenue generation and cut payroll from the top down? When it's looking to sell the organization. Personally, I have no idea how a nonprofit corporation can be sold to a for-profit one, and I have no idea what happens to the members, nor who actually makes money when and if this happens. However, I do know there are people who know these things, and I suspect they have a plan.
As someone who highly values the communities that serve our channel, it saddens me to think that CompTIA will never evolve into the organization I saw it becoming -- one that truly supports the fine, professional service providers our community members have evolved into. Certainly, CompTIA has created assets that are highly valuable and will continue to benefit all of us for years to come -- no matter what. We've also recently seen the growth of the ASCII Group, the absolutely explosive growth of organizations that support the growth of the role of women in technology, and new groups focused on the professional service providers we keep spawning, like the National Association of IT Service Providers (NSITSP). Clearly, there are many who recognize exactly what our community needs and are striving to provide it. But it looks like the long wait for CompTIA to move more purposefully in that direction will ultimately be for naught.
My guess is that some large learning center company will benefit most from acquiring the extensive educational assets and processes of CompTIA. Keep your eyes peeled. If we see CompTIA somehow working to shed members, it will quickly become apparent what is actually happening there.
I'm hoping some of the heroes who serve on the board will reply to this and tell me just how wrong I am.
Posted by Howard M. Cohen on March 25, 20240 comments
Ask your customers this question: "What do you think it means that the National Institute for Standards & Technology (NIST) just expanded the scope of its Cybersecurity Framework (CSF) to go beyond 'critical infrastructure' to instead apply to all companies and organizations?"
Last month, the NIST announced the first upgrade to the CSF since its release 10 years ago. In a blog post, Kevin Stine, chief of the NIST Applied Security Division's Information Technology Laboratory (ITL), noted that the CSF was born out of the 2013 signing of Executive Order (EO)13636, which required the development of a cybersecurity framework to protect "critical infrastructure," such as oil and gas pipelines, rail, aviation and water supplies.
In fact, the original version of the CSF was titled, "Framework for Improving Critical Infrastructure Cybersecurity."
Notably, CSF 2.0 doesn't make the distinction between critical and non-critical infrastructure. One interpretation of that might be that NIST now considers all infrastructure to be critical. The abstract for the CSF 2.0 emphasizes the important expansion of the scope of the document and defines its purpose:
Abstract
The NIST Cybersecurity Framework (CSF) 2.0 provides guidance to industry, government agencies, and other organizations to manage cybersecurity risks. It offers a taxonomy of high-level cybersecurity outcomes that can be used by any organization -- regardless of its size, sector, or maturity -- to better understand, assess, prioritize, and communicate its cybersecurity efforts. The CSF does not prescribe how outcomes should be achieved. Rather, it links to online resources that provide additional guidance on practices and controls that could be used to achieve those outcomes. This document describes CSF 2.0, its components, and some of the many ways that it can be used.Â
Another Key Expansion
In its original 2014 version, the five pillars of the CSF were:
- Identify: The organization's current cybersecurity risks are understood.
- Protect: Safeguards to manage the organization's cybersecurity risks are used.
- Detect: Possible cybersecurity attacks and compromises are found and analyzed.
- Respond: Actions regarding a detected cybersecurity incident are taken.
- Recover: Assets and operations affected by a cybersecurity incident are restored.
In the new CSF 2.0, a sixth pillar has been added at the top of the model:
- Govern: The organization's cybersecurity risk management strategy, expectations, and policy are established, communicated, and monitored.
This important new pillar helps organizations determine what they may do to achieve and prioritize the outcomes of the other five and, as such, serves as a defining mechanism.
The CSF Promotes Superior MSSP Methodologies
Perhaps the most profound evolution we've seen among MSPs has been the elevation from managed services provider to managed security services provider (MSSP). Many of our colleagues have seen the need and the opportunity presented by data and network security services.
For anyone who has already achieved MSSP status, and especially for those working to escalate their MSP practice to MSSP, the NIST CSF 2.0 is a must-read -- and soon.
CSF 2.0 represents tour de force guidance for those who seek to own responsibility for the data and network security of their own company, or that of others. The stated audience resides mainly in the "buy side," of corporations, government agencies, educational institutions and other organizations.
You can be guaranteed that your competition is already reading CSF 2.0 and has already begun planning based on it. The resources made available by this remarkable work are mammoth and will take time to get through, but at the end of that, MSSPs will be able to do something that will grow their profits substantially.
Customers respect methodology. In fact, their investment decisions are in large part influenced by the methodologies of the technology professionals they engage. In essence, they buy methodology. Reading CSF 2.0 and all the related materials will, without fail, dramatically improve your methodologies and impress your customers. It will also increase your profitability by enabling your people to perform related tasks far more efficiently and far more quickly.
This Is the Most Important Announcement You'll Read This Year
You are constantly reading about how this or that security software provider has improved their software, or about the new functions available in this or that security platform.
The CSF 2.0 announcement is all about how you improve you. How you improve the services you provide to your customers. How you earn increased levels of customer satisfaction from them. How you and your tech practice become more valuable. The guidance provided in CSF 2.0 is invaluable, as are all the resources it will lead you to.
So put down this article, pick up CSF 2.0, and start reading.
Posted by Howard M. Cohen on March 04, 20240 comments
Change is the only constant. That quote is commonly attributed to the Greek philosopher Heraclitus of Ephesus, but nowhere does it apply more completely than Microsoft. In the 43 years I've been involved with Microsoft, change has been nonstop -- sometimes blinding, often confounding, deeply frustrating and always challenging. But one thing has remained constant.
Jon Shirley, who assumed the mantle of Microsoft president in 1983 after being at Tandy for 25 years, was the first Microsoft executive -- but certainly not the last -- who ever said to me, "The most important thing to us is that you get the most out of your Microsoft relationship." Since then, I have had the same sentiment expressed to me by Steve Ballmer, Sam Jadallah, Allison Watson, Phil Sorgen, David Willis, Margo Day, Chris Capossela, Eric Martorano, Pam Salzer, Kati Quigley, Pattie Grimm, Gavriella Schuster, Rodney Clark and a host of Microsoft Partner Account Managers (PAMs). It is the one and only thing -- and perhaps the most important thing -- I can think of that has been constant throughout the past 40 years.
Quotas Reveal the Underlying Intent
Many years ago, I found myself at a quarterly partner briefing in Microsoft's New York office listening to one of the PAMs, Andy Pavarini, make some announcements. At one point, Pavarini suddenly stopped and drew a deep breath, as if his next announcement was going to be difficult. The entire room quieted.
"I now have to announce that, for the first time, Microsoft has a quota for you," he said measuredly. Everyone stopped breathing.
Pavarini continued, "Starting this quarter, Microsoft wants to see you earn $250,000 per quarter in revenue for your services related to Microsoft products."
It took a moment for everyone to unpack that statement (and I'm sure there were several in that room who never did). Being an analytics geek, I immediately realized there was no way for Microsoft to measure that. We didn't report our services revenue to them. At that time, they didn't even have a deal registration system in place.
Pavarini's point was simple. Microsoft knew that if we were inspiring, selling and winning projects that involved Microsoft products, those products would get sold. Perhaps not by us directly, but customers would end up buying them somewhere. This was the very beginning of what is today referred to as "transacting" versus "non-transacting" partners.
It had always been my experience that my Microsoft partners were anxious to help me close on projects that would have my team implementing Microsoft products. Pavarini was telling us that we should expect even more enthusiasm from them.
At around the same time, then-channel chief Phil Sorgen was telling me, "Microsoft has only one job, and that is to provide partners with the best possible platform to run their solutions on." This pre-supposed that partners of that era had solutions of their own. If you asked many of them what their solution was, their response would have a lot to do with adding more infrastructure. But then-Senior Director of Dynamics CRM Bill Patterson added that we should expect to see "an evolution of solution!"
That was then, and this is now. Much of the infrastructure has been supplanted by cloud services, which has caused Microsoft partners to completely redefine their "solutions." Patterson was right.
Making the Most
Today, many Microsoft partners have clearly defined the services they offer that complement Microsoft technologies. Many are managed services providers (MSPs), cloud service providers (CSPs) and other kinds of IT service providers (ITSPs). Others create their own intellectual property, often in the form of application software, that they sell to and through the ITSPs. Both groups recognize that customers can always enjoy superior pricing on software and hardware products, so they no longer depend on those for most of their profits; instead, they depend on the revenue they generate themselves from their services and/or their software.
Microsoft enthusiastically assures them that those whose solutions involve their own services should expect to see $7.63 of services revenue for every $1 of Microsoft licensing they sell. Those whose solutions are software can expect $10.11 for every $1 of Microsoft.
For me, this defines how today's Microsoft partner can make the most of their Microsoft relationship: Leverage the reputation and quality of Microsoft products as the foundation underneath the services and software solutions you produce, and look to your own generated revenue to produce far more than any product margin. This should come as a surprise to nobody.
Where Do We Go from Here?
Many people, including occasionally myself, can imagine a time when Microsoft phases out the partner program altogether. Two headlines have changed my thinking significantly: "Microsoft tops Apple as world's most valuable public company" from last month, and
"Microsoft confirms more job cuts on top of 10,000 in January" from last year.
It's hard to determine what to think when looking at these two headlines in the context of each other. One could suggest that reducing the workforce by 20 percent (by some estimates) helped Microsoft achieve its lofty new market cap. Or one could see the transactional business model for Microsoft shifting.
Many of Microsoft's products and services can be purchased or subscribed to online, and Microsoft partners continue to drive the majority of their sales. Also, there's now a large community of advisors, consultants and other resources, many of them former Microsoft employees, who help partners improve their Microsoft relationships tremendously. Perhaps this has reduced the need for such a large community of Microsoft employees and contractors.
I'll close this entry by adding my voice to the many who are encouraging you to focus on getting the most out of your Microsoft relationship. There are many resources out there to help you, both inside and outside Microsoft. Look inward to determine what it's going to take for you to get the most out of your Microsoft relationship.
Posted by Howard M. Cohen on February 08, 20240 comments