Microsoft ratchets up channel incentives

Published: July 11th, 2012

Toronto – Microsoft (Nasdaq: MSFT)will be altering its channel incentive strategy moving away from paying partners on transactions. Jon Roskill, Microsoft’s worldwide channel chief, told the 16,000 people in attendance at the Worldwide Partner Conference, held here, partner incentives will be paid out throughout the entire selling cycle all the way out to deployments and customer support.

As part of the Solution Incentive Program (SIP), Microsoft plans to increase partner incentives by an additional $200 million to $4.2 billion overall worldwide in 2013.

“Those extra incentives will be cloud incentives and solution incentives and SIP will be part of some of the richest programs we have. We are showing you the path to profits in the cloud,” Roskill said.

The company also introduced through the Office 365 Open program (announced Monday) more broad array of cloud business models that align with solution provider business models.

Roskill added that Microsoft has been selling cloud for a while and those channel partners who got involved early with the cloud channel programs grew 114 per cent year-over-year especially on Office 365.

With Windows 8 Microsoft will be filling out its product portfolio with cloud-ready point solutions such as Dynamics and Intune. All these products will be released in 2013.

Other products in that mix will be Windows Server 2012, SQL Server and Systems Center.

Since the last Worldwide Partner Conference in LA, the Cloud Accelerate and Cloud Essentials programs helped Microsoft reach two channel recruitment milestones: 10,000 Gold partners and 25,000 Silver partners.

IDC believes that a 50-person Microsoft solution provider with approximately $5-10 million in revenue and two-to-five competencies can realize about $320,000 in value directly attributable to MPN benefit utilization.

“This is just laying the foundation and we aspire to more. I want nothing less than leadership in cloud business software. We are not going for second place and neither is the channel,” Roskill said.

Solution providers have been asking Roskill for more local support in growing partner business. Roskill said that his plan for this starts with the Partner Account Managers (PAM). He has empowered all the PAMs to have more business development discussions with the channel. Also part of the plan will be for Microsoft to help develop new business practices for solution providers or augment current practices already in place.

Driving the sales pipeline for the channel will now be supported by an additional 100 telesales representatives. Also Roskill is addressing the channel’s need to close deals in the pipeline faster by hiring another 100 telesales specialists that will work just on helping solution providers close deals in the pipeline.