Will Nadella change the channel status quo?
Microsoft partners have little doubt that new Microsoft CEO Satya Nadella has the technology chops to deliver a healthy dose of innovation to the software giant’s product and services portfolio.
But the jury is out on whether the 22-year Microsoft veteran will be willing to alter its partner programs that many partners believe is heading in the wrong direction after a series of cloud computing sales incentive cutbacks.
While some of these cutbacks are small, such as limits on phone support, the other incentive cuts, mostly on sales of Office 365, are quite deep and will have a huge financial impact on partners.
In fact, CRN has reported that partners that sell Office 365 and other cloud services in Microsoft’s Advisor Enterprise Agreement Deploy program expect to see their incentive payments drop as much as 40 percent to 50 percent.
Microsoft claims Office 365 is its fastest-growing product ever and that the number of partners selling Office 365 has doubled in the past year. But the way partners see it, if Microsoft values their role in making Office 365 successful, it should be increasing incentives rather than cutting them.
In a recent poll of solution providers conducted by CRN’s Channel Intelligence Council, 34 percent of the 229 leading Microsoft partner respondents said they are planning to add Google Apps to their product portfolio due to the incentive cuts announced by Microsoft. What is more alarming is that nearly 70 percent of the partners polled said they plan to increase their recommendation of Google Apps in response to the Office 365 incentive cuts.
Not just that, Microsoft is also suffering on the industry and OEM partnership front which analysts believe could threaten Microsoft’s influence in the PC market. Intel along with many PC OEMs too are launching Google Chromebooks and hybrid Android devices.
More recently, Google has teamed up with VMware to let Windows apps, data and desktops run on Chromebooks for the first time, using a jointly developed technology they are pitching as a cost-effective option for Windows XP migrations. The technology marries VMware’s View desktop virtualization software with Google Chromebooks, with access to Windows apps enabled by VMware’s Blast HTML5 technology.
Clearly, Nadella has his task cut out. While he puts the plan together that will steer the transformation at Microsoft, he must realize that taking the company’s large partner ecosystem along will be a key to its success going forward.