Friday, November 27, 2009

Addressing Channels and the Low-End Market

Microsoft Business Solutions (MBS) especially emphasized at Convergence 2005, the company's annual user conference, that the upcoming wave of MBS business management applications will make individual users much more productive. As part of the undertaking, the vendor claims to have conducted extensive face-to-face conversations with over 2,000 business people from around the world and from all walks of life. MBS talked to, observed, and listened to chief executive officers (CEO), marketing vice presidents (VP), sales people, accountants, purchasing managers and clerks, warehouse workers, and so on.

Given that the technology blueprint, however impressive and powerful, is only a part of the total equation, which also includes solutions and the partner channel, MBS has lately also made moves to address these too. The channel has hardly been a picture of immaculate organization so far, with channel partners often competing against each other, while attractive horizontal and vertical add-on products would remain unavailable and unknown to the wider MBS customer base or would remain unsupported by small, resource-strapped value-added resellers (VAR)/independent software vendors (ISV). To remedy these problems, at Convergence 2005, Microsoft announced plans to increase resources and provide new tools and offerings for MBS ISVs and VARs, whereby all efforts are designed to accelerate the MBS Group's partner-driven vertical strategy, providing stronger opportunities for partners to align their services and solutions with their customers' specific needs.

To that end, by the end of fiscal year 2006, the MBS Group pledges to align 50 percent of its existing partners to a vertical solution or service. In addition, field resources and through-partner marketing will be aligned with verticals. While initial efforts will emphasize fourteen verticals within manufacturing, distribution, public sector and services, the MBS Group will continue to provide sales and co-marketing support to a broad ecosystem of partners across many verticals.

To support partners in generating customer leads in their target markets, MBS will provide resources for the field in the areas of demand generation, advertising, sales support, lead management and more, whereby more than 800 MBS team members in the field will reportedly be trained and empowered to help partners succeed in targeted verticals. In addition, the vendor will provide improved tools for the field, including data on vertical opportunities, an improved map of partner solutions, and a vertical business planning guide book, all designed to help partners plan and execute their vertical strategy. The idea is twofold: 1) to help find the appropriate solutions and bring them more into the mainstream of the sales process, and 2) to make sure that channel partners are not competing with each other for the same customers.
Microsoft's goal for 2005 is to have aligned half of its existing partners vertically, to have obtained vertical field commitments and training plans from them, and to be well on the way to vertical lead distribution. Specific tools and offerings include the following:

* Vertical Opportunity Map—MBS pledges to provide partners with the data necessary to assess opportunities that exist in specific geographic regions worldwide. This data includes a total count of business entities as well as industry and vertical purchase rates, allowing partners to get a good estimate of the market opportunity in their region or country. Partners are encouraged to use this data in combination with their own data to determine the relative attractiveness of serving a targeted market segment.

* Solution Finder—To increase the visibility of Microsoft's extensive portfolio of partner vertical solutions, this Web-based tool will be launched in the second half of calendar year 2005 to help customers select industry-specific partner solutions and related MBS financial management, supply chain management (SCM) and customer relationship management (CRM) solutions. In addition, partner account managers can use this tool to help identify opportunities for partners to develop their own intellectual property (IP) or identify opportunities for them to work with other partners to deliver a complete industry-specific solution. Solution Finder will work with data from the Microsoft Partner Program systems to streamline the partner profiling experience.

* Microsoft's Partner Channel Builder—This combination of an on-line tool and structured worldwide networking events will allow all Microsoft Gold Certified and Certified partners, including partners selling MBS products, to collaborate in an effort to deliver more complete industry-specific solutions. Partners may access the on-line tool at http://www.microsoft.com/partner/channelbuilder.

* Vertical Lead Distribution—Whereby a vertical lead grid will be incorporated into Microsoft's demand-generation processes to help the field effectively distribute sales leads to partners who have relevant solutions or industry expertise.

* Industry Builder—This is an ISV initiative designed to deliver industry-enabled enterprise applications that can be further extended into new markets by both VARs and ISVs. As part of the Industry Builder initiative, select ISVs will develop industry modules according to Microsoft's quality standards and package them with a customer support contract that includes both the MBS core modules and the Industry Builder application(s). The initiative is immediately available for ISVs focused on developing industry-specific solutions for MBS Axapta, and will reportedly extend to other MBS applications later this year.

Companies that need a business management suite often find themselves working with multiple solutions from a number of solution providers to meet their specific business needs, which can often result in slower implementation times and, potentially, higher costs. MBS' industry feedback indicates that these customers want a single source for product support and a reliable point of contact from the solution providers they work with. The Industry Builder initiative might fill this customer need by offering a Microsoft support contract that applies to both the MBS Axapta core modules and the vertical application modules that were developed by the participating ISVs. MBS is addressing that demand by combining vertical applications developed by ISVs with the core functionality and deep customization options offered in Axapta.

Ultimately, the Industry Builder initiative should provide customers with a more complete solution while also giving the partner community a more powerful means to compete with other software vendors, as partners can add highly valued consulting in delivering that 'last mile' of vertical-specific functionality, which today is so important for customers.

A year ago or so, Microsoft was encouraging partners to use MBS' nuggets of functionality such as bill of materials (BOM), project accounting, payment processing, or electronic data interchange (EDI) as the foundation for their own solutions. Microsoft advocated that partners either embed these MBS modules right into their own vertical products or customize their solutions in a way that they would only work on top of these MBS modules, but this strategy will now be superseded by the Industry Builder initiative. Microsoft will supposedly not build any vertical applications itself, but this new vertical focus will likely have a long-term impact on how MBS will design and develop its products.

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