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FY10+ Microsoft Dynamics Partner Strategy Q&A

Overall Strategy
What is changing and how does it impact partners?
The Dynamics partner program is currently undergoing an extensive update to take more advantage of the significant market opportunity for integrated ERP and CRM solutions. Horizontal solutions have become a commodity and it is no secret that our prospects value vertically-specific solutions. We have been talking about focusing on verticals for a number of years, but we are bringing higher levels of focus and investment than ever. Microsoft’s strategy is aimed at increasing the scale and productivity of partners. It encourages small partners to grow and go vertical and it helps larger partners succeed and grow more. The Partner Strategy supports partners during this transition with program changes and investment aligned with key goals. Partners that are vertical and growing will receive more benefits and investment from Microsoft. MS will be more prescriptive and proactive in aligning vertically focused VARs with the CfMD ISVs that can provide them with repeatable, packaged solutions. By rewarding and investing more in the partners that are aligned to our goals we can transform our partner channel and more rapidly gain market share. These changes will have a big impact. Our goals are to: 1) Triple the average customer adds of our VAR partners 2) Triple the number of ISVs and VARs gaining >50% of their revenue from packaged, repeatable vertical solutions 3) Increase the average operating margin of our partners by 50%

Do the changes apply to both Dynamics ERP and Dynamics CRM?
This applies to both ERP and CRM. There are key differences in the products: • • • • CRM products are earlier in their life cycle, requiring a higher focus on new partner recruitment in many areas. CRM targets the Core Midmarket up to the Enterprise, which drives requirements for more global partners and tighter engagement with the Microsoft Enterprise Field sales force Microsoft also sells CRM under VL, which drives differences in the sales and fulfillment process CRM also has a unique opportunity to be sold as a development platform for custom apps, which we call xRM.

With that said, there are key similarities that drive natural alignment in the partner program: 1) Customers prefer solutions that are specific to their vertical whether we are talking about ERP or CRM 2) Both product segments are requiring higher levels of partner sophistication, investment and scale based on the potential of not only vertical solutions, but also Microsoft stack integration (SQL, SharePoint, Office, and Outlook). This motivates us to drive our partner strategy and programs to support a consistent end-game, the support and nurturing of partners driving growth and scale through a vertical focus.

Why are we making the change change?
Though Microsoft Dynamics consistently perform better than the overall ERP and CRM market, we are performs not growing fast enough to rapidly gain share or defragment the market Research shows that prospects market. consider Dynamics solutions as often as our main competitors; however, we do not win substantially more than any other major brand. Being considered but not winning is terrible. It means that all the money partners spent on the sales cycle is wasted wasted. So we are focused on this key issue – Win Rate. The path to a higher win rate is in selling vertically specific applications that take advantage of the integration to the rest of the MS stack and our ability to customize for the specific needs of the individual customer. To drive a higher win rate, two critical things are needed: e needed 1. VARs that invest to deeply understand the vertical requirements, processes and business challenges of the prospects. Our research shows that the Dynamics partners that have done this are our most successful partners. 2. ISVs that write repeatable, vertically specific code. Customization is a key competitive advantage Customization for Dynamics and a critical source of revenue for our Partners but too much customization in the Partners, solution does not scale. It drives the prospect price too high and the implementation cycles too long. It makes long upgrading to the t newest version of the ver software a high cost proposition, which damages our collective long term enhancement revenue opportunity. We have a lot of examples of the right xamples kinds of ISV and VAR partners today. – The issue is that Microsoft has not done enough e to prescriptively align the best ISVs with the committed VARs, drive demand based on a vertical value proposition and connect the leads with the right partners that can win the deal. Scale is important. Partners that know the vertical, Partners that know the stack, dedicated pre-sales hat pre engineers and consistent marketing execution all take a level of scale and size. We are not talking about . growing our average partner to 1,000 people. We are talking about taking our current core partners, those with 30, 40, 50 people and gettin them to 90, 120, 150 people. Even if a partner already has getting hundreds of dedicated Dynamics people, there is plenty of market opportunity for larger partners to reach cs these same growth rates.

Driving Industry Focus
What are the key changes to the Industry Strategy?
1) Microsoft will be more prescriptive in lining up the best VARs and ISVs – Microsoft will ensure that the VARs are committed to the ISVs and trained/certified on their solution. We will ensure that our ISVs achieve CfMD status. You will see this in the Partner Program. 2) Microsoft will be more targeted and hands-on in driving the industry partner ecosystem and in recruitment to fill the holes in the solution – we have new roles and commitments to make this happen. 3) Microsoft will ensure that both marketing activity and leads are committed to the VARs that represent the best vertical solutions.

Partners have been heard “focus on verticals” for years? How is it different this time?
Microsoft has made significant progress over the last few years in shifting to verticals, with more vertical marketing content, training and successful partners than ever before. The progress on CfMD has also been key. The changes we are making bring more training, marketing and staffing investments than we ever have before. The key addition is validation – we will validate solution completeness and success, vertical skill levels, marketing spend and commitment and close rate to a much higher level. The partners that have truly gone vertical should appreciate and benefit from this.

When do you decide to recruit versus working with current Partners?
Our primary approach is growing the partners we already have through expansion of their sales in their existing vertical(s) and geographic and/or vertical expansion. If this is not feasible, we will recruit a new partner, but in a targeted way.

How does CfMD fit into this strategy?
CfMD provides validation of the ISVs software, and marketing benefits to the ISV. As we align VARs to ISVs, CfMD status is a key requirement.

You seem to have a problem with direct selling ISVs. What is the issue?
There is no issue with direct selling ISVs. In fact, in very targeted vertical solutions with unique needs and potential customers in the hundreds or low thousands, it is probably the best way to approach the market. We will enable and promote this model as it is truly vertical and very effective. However, this is a model that does not readily scale for the larger industry or vertical opportunities like industrial manufacturing, wholesale distribution and specialty retail. We need the combination of an ISV and multiple VARs to rapidly gain share in these markets.

Focusing on verticals makes sense in the long term. How long does Microsoft expect the change to take for a Partner?
We do not expect it to happen overnight. Many of you have already moved in this direction. Many of our most capable vertical partners still get 30%, 40% or even 50% of their revenue outside their core verticals. Partners are just expected to focus marketing and training investments in specific verticals and Microsoft will do the same.

Marketing
Why is Microsoft Dynamics changing its partner marketing strategy?
Market research indicates that there is a very large opportunity for growth with the Microsoft Dynamics solution and that a large untapped market exists for ERP and CRM solutions. In order to more effectively tap into this growing market, Microsoft will target its marketing investments vertically and prioritize partners that are strategically aligned to grow the business across key verticals.

What are the primary objectives of this change?
The new marketing strategy is intended to accomplish two primary objectives: 1) Focus marketing investments on vertical market opportunities and high value partners 2) Drive more effective vertical marketing campaigns with partners To effectively do so, we must make changes to the way we do business today. Below is a description of the key changes that we will be making to our marketing strategy.

How will partner marketing be different than today?
In order accomplish the objectives stated above; there are several key changes that will have to be made both from a Microsoft perspective and a partner perspective. • To drive more effective marketing, the first priority is to focus the vast majority of marketing investments (both Microsoft and partner) on targeted verticals instead of horizontal marketing initiatives. Microsoft will be focusing partner marketing investments (engagement and funding) towards high value partners. Marketing investments that are spread too broadly across too many partners and priorities fail to adequately make the desired impact and fail to reward our highest value partners. Microsoft will be a shifting its marketing investments and tactics to focus on a “With-Partner” approach and less of a direct “To-Customer” approach. This will allow greater utilization of partners’ vertical expertise and resources. Microsoft plans to implement Partner Marketing Service Bureaus to optimize marketing budgets, improve campaign effectiveness, and measure effectiveness of marketing spend. Microsoft will drive a process that provides more visibility into co-funded partner campaign success by tracking and reporting on the results of individual marketing campaigns.

• •

How is marketing execution changing?
For improved execution of marketing activities, Microsoft will be building two models for the delivery of marketing campaigns—the Marketing Service Bureau and the Self Service Model. o The Marketing Service Bureau is an agency driven model through which vertical marketing campaigns will be built and executed and a full range of key marketing services will be provided. The marketing service bureau is an agency or series of agencies that are chosen by Microsoft and trained and educated on the Microsoft Dynamics marketing strategy and resources. The marketing service bureau is a “With-Partner” model because: 1) joint marketing planning with Microsoft is required and 2) lead reporting is required, and 3) co-funding is associated with it. The Self Service Model leverages online self service tools and resources that are made available to all partners. The purpose of the self services resources is to make prepackaged campaign templates and other sales & marketing resources available to all partners. The service offerings will include brand and logo resources, “How-To” guides and downloadable campaign templates. No co-funding will be made available, but the tools are free of charge, easy to use and reduce marketing cost and time-to-market for Partners.

o

Agency Driven Model
Partner Agency Microsoft Customer

Portal Interface

Microsoft
• Central agency/vendor, designated and trained by Microsoft, facilitates campaign creation and execution, as well as marketing service offerings • Coordinates joint campaigns between ISVs and VARs

Portal

Partner

Customer

Marketing Service Bureau

Self Service Model

[All partners will have access to basic services that are offered through the Marketing Service Bureau agency (such as telesales), but the lower tier partners will have to pay full price for those services and engage with the agency on their own.]

What is the value of the Marketing Service Bureau (MSB) and when is it best utilized?
Microsoft believes the marketing service bureau model will greatly improve the overall effectiveness of the vertical marketing strategy by building and executing more impactful marketing campaigns. 1) The model will increase the marketing effectiveness of our top partners by allowing them to more effectively leverage the Microsoft brand and the marketing expertise of the Marketing Service Bureau. 2) By managing co-funded campaigns through this model, the marketing investment of both Microsoft and partners can be more effectively leveraged. 3) Through this model, the powerful brands of both Microsoft and our key partners can be more effectively leveraged. 4) The MSB can more effectively plan and execute joint marketing activities between Internet Service Vendors (ISVs) and Value Added Resellers (VARs) in ways that previously were not possible, resulting in stronger vertical campaigns. [Important: Please note that the Marketing Service Bureaus will be operated locally, and so actual implementation times may vary depending on region.]

How will Microsoft determine which partners to go to market with?
There are five key characteristics that define our high value partners or “Go-To” marketing partners. 1. Vertical Alignment: First and foremost is vertical alignment. Partners that are uniquely positioned to target specific verticals and customer segments are critical to Microsoft’s vertical marketing strategy. Growth: Microsoft is looking for partners that have demonstrated their ability to grow and scale. Revenue: Partners that are generating significant revenue under today’s model and are considered leaders in their industry. Strategic Initiative: A given subsidiary may have a key strategic initiative (such as new recruits, competitive initiative, etc.) that it will be looking to execute with specific partners that demonstrate high potential, but aren’t yet the high revenue generating partners because they are new to the business. Marketing Capability/Commitment: Microsoft is focused on working with partners who demonstrate a commitment to marketing and are prioritizing their resources accordingly. The following are examples of qualities that might be considered to determine the level of a given partner’s marketing capability: Marketing Investment – The Partner is prioritizing marketing and is willing to make the necessary investments Resource Commitment – The Partner has a dedicated marketing resource in place Nurturing Strategy – The Partner has a nurturing strategy in place Pipeline Management – The Partner is doing due diligence to track, report, and effectively manage leads Successful Campaigns – The Partner has a track record of successful campaign execution

2. 3. 4.

5.

For those partners who do not yet have a developed marketing expertise and/or resources, the Marketing Training Courses of the Dynamics Partner Academy may be utilized to help partners increase their marketing capabilities.

How will Microsoft support its high value partners?
After going through the prioritization exercise above, Microsoft will be in a better position to focus marketing investments and support on its top partners. Microsoft will be making partner investments from a marketing perspective in 3 different areas: co-funding; strategic engagement and planning, and marketing campaign support. • • • Co-funding: The highest levels of co-funding will be made available for those partners that are deemed most strategic according to the criteria described above. Strategic Engagement: Microsoft will be seeking to engage in in-depth, strategic marketing planning with its highest value partners. Marketing Support: Highly customized vertical campaigns will be available to high value partners, and will be invitation only. Pre-packaged customizable vertical campaigns will be made available to partners at the managed level, and some level of co-funding will be made available. And online self-service tools will be available for all partners, providing basic campaign templates and self-help guides.

[Important: Keep in mind that these will be locally made decisions, and so will vary depending on region.]

How will these changes benefit our top partners?
We expect there to be a number of important benefits to partners that will result from this new marketing strategy. The primary benefits for top partners include: More effective marketing campaigns resulting in higher quality leads Deeper engagement and a higher level of support from Microsoft Greater alignment and synergy between partners and Microsoft at the strategic Level Exclusive co-funding and joint marketing opportunities More cost-effective approach to marketing First and foremost, the result of leveraging the power of the Microsoft brand, the marketing expertise of the Marketing Service Bureau, and the vertical expertise of partners, will be more effective marketing campaigns which result in higher quality leads and opportunities for our partners. Furthermore, by prioritizing partners and targeting marketing resources, Microsoft will engage more deeply with and provide greater marketing support to its top partners. As a result of the deeper engagement and joint planning activities, we believe there will be greater alignment and synergy between partners and Microsoft at the strategic level, a key ingredient to any successful marketing strategy. And by identifying and working more closely with the high value partners, Microsoft will be able to ensure that they receive a greater level of marketing support in the form of co-funding, strategic engagement, and customization of campaigns. The Marketing Service Bureau model and the self service tools are designed to make it easier for partners to build and execute marketing campaigns with Microsoft. We anticipate that this will result in time and cost savings for our partners.

What will be expected of me as a partner?
The benefits also come with commitments from Partners. In order to effectively execute on this new strategy, Microsoft will look to partners to do the following: 1) Re-evaluate your marketing strategy - in light of these proposed changes. One of the key characteristics that define our high value partners or “Go-To” partners is vertical alignment. Partners that are uniquely positioned to target specific verticals and customer segments are critical to Microsoft’s vertical marketing strategy. 2) Make necessary changes/investments - to align with the new marketing strategy. Microsoft is looking to work with partners who demonstrate a commitment to marketing and are prioritizing their resources accordingly. 3) Engage with local subsidiary - to drive vertical marketing campaigns. Work with your Partner Account Manager (PAM) and Microsoft Audience Account Manager (AMM) to conduct joint planning activities and build the marketing plan. We believe that this is critical to the success of the vertical marketing strategy.

When will these changes be implemented, and which subsidiaries will be impacted?
The changes described in this section are part of the long term vision that Microsoft has for its subsidiaries. Since the actual operational elements of the strategy will be owned at the local level, the implementation of the strategy will vary from sub to sub depending on the conditions and maturity of the marketing in question. It will be up to partners to engage with their local account representative to better understand how and when these changes will implemented in their area.

Readiness
Readiness questions cover 3 major areas:
1) The Dynamics Partner Academy for Training 2) An expanded set of packaged partner business systems, which are IT solutions to help run your business and better integrate with Microsoft 3) Partner Business Consulting to serve as an experienced advisor as you expand your business

1. Dynamics Partner Academy
What is the Dynamics Partner Academy?
Achieving high levels of profitable growth requires an increase in training and skills across the entire partner business. In order to better ensure success of Microsoft Partners, training curriculum is being ter greatly expanded. It’s called the Dynamics Partner Academy and there are 7 key partner employee roles . around which the trainings are structured. These include business leadership skills for the CEO, marketing, pre-sales, sales, project management and the two more technical roles of covering solution consulting sales, and implementation. Microsoft is going to provide subsidies for these trainings for qualified partners. Those partners that qualify for the higher levels in the New Microsoft Partner Network ERP and CRM Competencies will receive greater subsidies than those on the lower levels. Driving a Dynamics-focused Driving Dynamics curriculum means the greatest ROI and impact for our Partners, driving up win rates, profitable Partners, implementations and customer satisfaction.

The Dynamics Academy training looks great for new Partners, but what is the value for an existing and successful partner? ing
Every partner has areas in which they could be better. Our Economic Survey and other “best practices” best practices work we do points out areas for improvement in your firm, with the classes serving as “spot training” in spot training the specific areas. People also have turnover and new hires and we look at the Academy as the way to get eople new employees up and running and making a positive contribution to your bottom line more quickly.

If a Partner already has a great source of training can they claim the subsidy for training, su training outside the Dynamics Academy?
No. We do not have the resources to validate effectiveness for 3rd party training providers. We will make the commitment to deliver and monitor the best possible training through the Dynamics Academy. You

are free to use other training companies, but certifications in terms of sales, pre sales, methodology and re pre-sales, implementation will be based on the content of the Academy courses.

2. Partner Business Consulting

What is Partner Business Consulting?
Partner Business Consulting is a Microsoft Readiness initiative that provides business strategy and siness operations support to partners.

What services Partner Business Consulting offers?
Partner Business Consulting provides individualized, strategic business advice to our Partners. Whether it is hiring /investment options, organizati organizational structure or M&A strategies, Partners would greatly benefit from a consultation with someone who has been through the same challenges. Microsoft commits to the following: We will identify and qualify consultants who have successfully grown and run ERP and CRM VAR and ISV organizations. We will ensure that they are fully aware of Microsoft’s strategic direction and investment priorties, enabling them to ensure they are giving our partners the best advice on maximizing giving the business opportunity with Dynamics. In select situations, a local sub may decide to help co fund some initial engagements. co-fund

Whether or not co-funding is made available, we believe the availability of qualified consultants can make a significant difference, as we have already seen these relationships pay big benefits in pilot programs in the US and Europe.

Q: Will all top Partners be assigned a Consultant? What are the requirements for co-funding from Microsoft?
All partners will have access to the Consultants that we validate, with all business agreements and fees being a private matter between the two parties. Co-funding from Microsoft is a sub-by-sub decision depending on available budget and business goals.

3. Partner Business Systems
What is the Partner Business Systems initiative?
In order to manage all of these highly skilled people, projects and opportunities, as well as your connection back to Microsoft, we will also be releasing an expanded suite of partner business systems that will help scale and manage your business. They include verticalized ERP/CRM solutions, BI capabilities, Dynamics business specific KPIs and scorecards, customized reports, and built-in PSM integration and processes. Both the Microsoft Solution Selling Process as well as Sure Step Methodology will be integrated into the offerings. Many of you have cobbled some of capabilities together, but it is incredibly wasteful to have hundreds of partners creating one-off systems and customizations when all partners need it, so we will either build or partner with ISVs for the right code and provide the integration with critical Microsoft systems and tools out of the box. Once again, Microsoft is going to provide subsidies for these systems for qualified partners. Those partners that qualify for the higher levels in the New Microsoft Partner Network ERP and CRM Competencies will receive greater subsidies than those on the lower levels.

Q: Many Partners have built their own customizations and applications to run their business. Will utilization of the new systems be required?
Utilization of the systems will be entirely optional. We are just trying to keep all partners from writing and maintaining similar code and helping to ensure efficient and profitable operations. You may choose to implement all or just the parts that make sense for your business.

Engagement
How is the Microsoft Dynamics vision for engagement between Partners and its Field changing?
1) Implementation of an industry focused engagement model to provide a targeted relationship approach with high value partners

2) Evolution of the Partner Account Manager ( (PAM) role to allow for long-term relationships as a term relationship trusted business partner 3) Refocus of individual field roles to provide partners with increased support throughout the sales lifecycle 4) Implementation of an integrated engagement model to provide more efficient and effective support for partners 5) Availability of new systems and tools to enable Microsoft to better view and understand partner priorities

What does this mean for managed partners?
The Partner’s relationship with Microsoft starts with the PAM. Microsoft sees the PAM as the hub of our more integrated approach to managing partners. The PAM is at the center of the relationship with Partners, ensuring that the Partner gets the maximum business value from its relationship with Microsoft, as well as ensuring that Microsoft drives the needed business results through the Partners. Partners should view their PAM as a trusted business partner who will work in an integrated approach with PTA’s, SSP’s, IMDM’s, as well as the marketing and readiness teams to insure Partners are well positioned within MBS to achieve their goals.

Partners have complained about churn in their assigned PAMs and a lack of knowledge of the business applications market and the partner business model. How is Microsoft addressing this?
In terms of turn-over, there is always some level of churn, but we are driving the expectation of longer 4 – 5 year stints to allow time to build trust and knowledge of their managed partners. In terms of building knowledge and value, we have really focused on this role over the last 2-3 years with additional training investments designed to help drive true value to your business. We have also increased maximum job grades and target hiring levels as well as implementing business management and planning tools that provide a 360 degree view of our relationship with Partners. Through our Partner satisfaction surveys you are telling us that we have made great strides, but we are not done. Additional training investments are being made this year to drive additional skills. More tools are being built to drive efficiency and insight.

How is Microsoft staffing and training the field to help target specific industries?
1) Microsoft has created the role of Industry Principles – This is an HQ role staffed by people with a deep knowledge of the Industry as well as business applications. They set the long term strategy for Dynamics in the Industries and corresponding verticals, serve as our vertical PR and event spokespeople and drive our industry and vertical priorities out to the areas and subs. We have already hired a number of Industry Principles and will hire additional resources this year. 2) Microsoft has created the role of Industry Market Development Manager (IMDM) – This role is staffed by people with a deep level of experience in the industry, and their key role is to drive our success in key verticals by organizing a select set of ISVs and VARs, ensuring that the solutions are competitive, VARs are trained and we are executing marketing campaigns and events to drive demand. We have already hired these resources in the US and Europe and will continue to add more in the coming years. 3) Finally, Microsoft will increasingly require industry and vertical experience in our SSPs, the overlay sales force that supports and works with you in sales situations in larger deals.

Why did Microsoft decide to hire Industry Market Development Managers?
Microsoft has a lot of great, vertically focused VARs and ISVs, but we believe we can play a valuable role in organizing the partners, both in terms of readiness and training as well as marketing and sales with a specific focus on customer add and revenue attainment. Microsoft has said “go vertical” for years, but has never really had an internal resource that could both validate and build the partner’s vertical ability.

Where are the IMDMs located?
IMDMs are based in a time zone, crossing a number of countries or regions. This is valuable as it mirrors the requirement that our vertical VARs and ISVs drive a wider geographic footprint to capture the most opportunity with their vertical solutions. Today, they are in place in North America and Europe. We will add people to these time zones and intend to add additional Time Zones over the next few years.

How should a Partner engage with Microsoft?
Ensure you drive a higher level of business planning with your PAM. Ensure there are clear commitments on both sides. Ensure that the PAM has all the information about your abilities and investments to be your champion across other sales and marketing organizations at Microsoft. Ensure the IMDM knows of your specific vertical skills and investments.

Microsoft has talked about Auto-billing for the renewal of Business Ready Enhancement Plans (BREP). What does this do for the Partner?
Both the partners and Microsoft spend a lot of time and money ensuring we capture this critical revenue stream. Auto-billing will allow us to jointly focus on those customers truly at risk of going off the plan while letting the vast majority of those that intend to re-purchase transact automatically.

Is the move towards auto-billing a move to a direct Microsoft relationship with the customer?
No. Microsoft is still billing on behalf of the Partner. We are merely taking an operation like billing that scales very well at a very low incremental cost and trying to make an investment that will bring down the selling and operations costs of all Partners. This is still your customer, and you still get 65 days after the end of the month in which the plan is sold to pay Microsoft.

How will partner support & services change?
Partner Support & Services will evolve from a reactive support program to a proactive services program covering the entire services life cycle: Helping our partners to SELL products using Microsoft technologies, DEPLOY Dynamics Solutions on time, on budget, on spec and SOLVE their customers’ issues quickly.

MPN Alignment
How will the program changes align to the redesigned MPN?
1) The existing “MBS” Competency will become two Competencies - ERP and CRM, with a corresponding change in branding. A Partner can either qualify for the Competency or go further and reach the “Advanced” level. Beyond the naming, the critical change is that the point system is being retired, and a partner must meet all the specific requirements to reach “Advanced” or “Competent” inside the ERP or CRM Competency. This allows prospects to know that the partner is specifically qualified to sell and implement the ERP or CRM solution they are seeking.

2) The requirements are going up. We are implementing minimum sales levels, higher certification levels, levels, more customer references, customer satisfaction surveying and minimum enhancement contract renewal rates. 3) Although we have not finalized a “cross Microsoft” approach to this, we will be adding additional, specific recogni recognition at the Industry level for our Dynamics Partners. You can add this recognition to your ERP or CRM Competency to get a higher level of differentiation and endorsement from Microsoft in the market. 4) Some of these new requirements are extended to the entry SPA and CSA agreements, where try agreements we will be adding a minimum sales requirement, a methodology certification requirement, and an increased number of certified individuals Failing to meet any of these requirements means individuals. an inability to renew the SPA or CSA agreement. We are also adding a fee for the SPA and CSA CSA agreements in exchange for unlimited access to the e Learning courses required to meet the e-Learning certification requirements. 5) Finally, for those partners that may not want to meet all of these requirements but still may requirements find opportunities, we are launching a Lead Referral Program that allows any legal entity to provide a lead, for which they will get a referral fee currently estimated at 5% if the opportunity closes. This opportunity covers both current Dynamics partners that choose not to current invest to reach the minimum SPA and CSA requirements as well as other Partners in the Microsoft ecosystem, external associations, and anybody willing to meet minimal requirements. requirements

Why are you adding more certification requirements for Partners? These add costs and are not recognized by prospects as a significant differentiator.
Certifications and references are the only way that Microsoft can actually validate Partner skill levels and provide a truly differentiated brand. The branding we have provided in the past has not added value because too many people had it. “Gold” is not really “Gold” when 70% of transacting Partners have achieved it, and it can be acquired with a minimum of training and references. It is critical to our mutual win rate that we make these brands mean something in terms of skill and ensure that prospects are directed to the partners at the top tiers of our channel.

Why are you requiring the use an Implementation Methodology to reach the Competency? Do the Partners have to use Sure Step?
The utilization of an industry-standard implementation methodology has proven to increase customer satisfaction as well as the quality, timeliness and profitability of the Partner’s implementation. The Microsoft Dynamics team has made significant investments in the Sure Step methodology to ensure that partners do not have to replicate this expense. Sure Step is available to Partners at no cost, but the use of Sure Step Methodology is not required. A Partner can use their own proprietary Implementation Methodology. The testing and certification ensure usage and knowledge of an industry standard implementation methodology, with no specific requirements for Sure Step usage or knowledge.

Why is Microsoft so focused on License Revenue Growth? Growing License Revenue at 20%+ Y/Y is very difficult – Partners generally have swings in annual revenue.
Microsoft cares about scale and market share. License revenue is the leading indicator of the health of the business and the prime measurement for share gain. In terms of the swings from one year to the next, the training we provide combined with a consistent focus on marketing, dedicated pre-sales engineers and a professional selling approach will help Partners drive a more consistent level of growth. Microsoft needs a consistent, achievable level of growth from all of it partners to achieve our growth goals.

Is there enough business opportunity to reach the growth goals?
Absolutely. We can drive a significant increase in our business merely by driving up the win rate in the deals we are already in! We also have lots of competitors with poor, outdated technology and large installed bases of customers. Finally, we have a significant number of potential prospects that have not yet even invested in truly integrated ERP and CRM applications.

Rollout
When will these changes occur?
These programs will take time to roll out and develop over the next 2 years. Generally, here is guidance and specific actions you can take in the next 12 months:

Partner Actions

Meet with your Microsoft contact to discuss the details of the Microsoft Partner Network (MPN) Partner with your Microsoft contact in aligning your Business Plan with your targeted level and Industry focus in the MPN For a new or expanded vertical focus, work with your Microsoft contact on local Vertical Solution Priorities and available CfMD solutions Connect with your Microsoft Audience Marketing Manager on local marketing resources and the status of marketing services available from the Marketing Services Bureau Ensure your sales, pre-sales and project management people are signed up for the Dynamics Academy - Available starting in January (depending on your area and sub) Ensure compliance with the requirement for an approved Implementation Methodology – Sure Step is available at no charge If you are an ISV, obtain Certified for Microsoft Dynamics (CfMD) status

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