Creating a collaborative channel

Phil Goldie - Director of Partner Development, Microsoft

Usually at large-scale vendor conferences, when the channel masses converge to take over an entire North American city, the focus lies with one leading visionary.

Generally, it’s the charismatic CEO issuing a much needed rallying cry, or perhaps the boisterous second in command cutting the competition down to size.

Yet in Toronto, at the 2016 Microsoft Worldwide Partner Conference, the 16,000 partners in attendance fixated on those sats in the seats alongside, assessing ways in which to utilise an expanding and ever-changing ecosystem.

“As a vendor we’re always finding new ways to cultivate partner to partner connections,” said Goldie, speaking to ARN on the ground in Toronto, ahead of the vendor's 2016 Australia Partner Conference in Gold Coast on September 5.

“There’s an appetite for partners to find synergies between different businesses and areas of working together.”

With a digital agenda luring a new breed of partner to Microsoft’s flagship channel conference - including 40 percent first time attendees - the idea of working together now takes precedence over going it alone, as businesses forge mutually beneficial relationships to address changing customer demands.

Sense of urgency

“Collaboration has always been there in some capacity, and partners have always focused on trying to use certain aspects of the ecosystem in Australia,” Goldie observed.

But while Goldie accepts collaboration as a concept isn’t new to the local channel, the rate of innovation in technology is challenging partners to reassess go to market strategies.

“There’s much more of a heightened sense of urgency around collaborating now compared to the past few years,” he said.

“Through the rapid innovations in cloud, partners are more more open to partnering and finding new ways to build capabilities.”

As highlighted during three days of keynotes at WPC 2016, Microsoft is continuing to deliver on the potential of cloud, with core product lines crossing as new technologies hit the market.

During a string of Azure, Office 365, Windows 10 and Surface announcements, the tech giant displayed a sense of coherence in front of its sell-out channel crowd, as the traditional large product groups become interconnected.

Underpinned by Cloud, security, Power BI and analytics, the dovetailing of Microsoft technologies speaks to new players in an ageing game, luring Independent Software Vendors (ISV), born-in-the-Cloud partners, start-ups and Systems Integrators (SI) into the ecosystem.

With a different partner makeup for Microsoft forming, the traditional transactional resellers are losing ground at a rapid pace to the young guns and upstarts, yet generally speaking, remain bound by reservations around collaboration.

“It feels like that’s the case but it’s not always linked to the age of the business,” Goldie observed. “One of the key attributes of born-in-the-Cloud providers in particular is that they are very clear on what their value proposition is and what they’re trying to achieve for the customer.

“They are very laser focused on the profile of the customer they’re trying to work with. They are very clear in qualifying their sales pipeline and ensuring they focus on what’s core to their business and capabilities.

“It’s goes back to being very clear on what you do, and what you don’t do, which is a key trait of this type of partner and makes them more open to collaboration.

“It makes it easier to think about areas they can partner in to build skills and expertise.”

Office 365

Citing the Microsoft product offering as a key example, Goldie questioned what it means to be an Office 365 partner in 2016?

“In truth, it doesn’t mean anything,” he acknowledged. “Because partners must assess which elements of that portfolio they have strong capabilities in.

Broad by its definition, Office 365 covers anything from business intelligence (BI) and analytics, security, voice, collaboration tools, email, storage and countless more technical and business specialisations across the product.

“Are you a specialist infrastructure identity migration partner?” Goldie questioned. “Are you better at empowering organisations through Yammer and Skype?

“Or do you hold expertise in helping businesses unlock the potential of data through BI and Analytics?

“It’s highly unlikely that you can find one partner that can do everything, so there’s a need to become better at working together to unlock the value of the entire portfolio.”

Collaborative environment

Specific to Microsoft, Goldie said the vendor has matured as an organisation in terms of how it engages with its channel, creating a collaborative environment for partners to share ideas and work together in new ways.

With some of the channel’s largest M&A activity of the past few years taking place inside the meeting rooms and networking stands of Microsoft’s flagship channel conferences - in WPC and APC - the power of partnership is being recognised across all aspects of the industry.

But while partner-to-partner appears to be the new motto of the channel, the art of acquisition differs from desire to collaborate.

During the past two years alone, streams of Microsoft partners have preferred to buy rather than partner, snapping up multiple companies to bolster in-house capabilities.

Locally speaking, Telstra has closed deals to acquire top-performing Microsoft partners Kloud and Readify, alongside enterprise mobility solutions provider, MSC Mobility.

In addition, 2016 Microsoft Country Partner of the Year MOQdigital recently completed a double acquisition, taking control of managed IT services and professional services company Tetran and software-as-a-service solutions provider Skoolbag in March.

Backed up by Empired creating one of the largest Microsoft service providers in Australasia, through its acquisition of New Zealand’s leading IT services firm Intergen in 2014, coupled with Dimension Data bolstering its ranks by on boarding consulting services company Oakton, and the direction of travel is clear.

“If you look at the recent M&A activity in Australia, that approach is definitely true,” Goldie observed.

“Clearly for some companies, acquisition is the preferred path in terms of building that capability.”

For Goldie, partners see this as absolutely core to ensuring day to day existence as a business, yet despite the trend, M&A is not without its risks.

“It’s not a trivial thing to acquire an organisation and to properly integrate that business to fully realise the value of what you’ve paid for,” he explained. “At the larger end of town, this is happening more.

“But below that level of partners, there’s a much higher need to partner together because the collaboration is much more straight forward and allows them to keep focusing on their core business.”

Challenges

Yet at the smaller end of town, concerns of exposing the customer remain, as partners remain wary of engaging competition across the country.

“Through cloud, customers naturally have lots of freedom and choice anyways,” Goldie added. “While the days of multi-year, outsourced and managed service contract are not coming to an end, they are being challenged by a more nimble go to market model.”

As explained by Goldie, Microsoft’s Cloud Solution Provider (CSP) programme is a good example of this.

“There’s no reason why customers can’t move between partners very quickly if they think they can find better value elsewhere,” he added. “The nature of technology today makes it easier to move.

“The result is that organisations are being forced to rethink how they deliver a customer lifetime value and how they can make that customer sticky.

“The process is now focused on how do I add more value everyday versus how do I reduce the competitive surface area of my customer by not introducing other players.”

For end-user organisations, Goldie said there’s an expectation that partners lead the engagement and that one throat to choke rule still applies.

“But behind the scenes,” he added, “there’s now an exception to bring different skills and specialisations to the table and customers expect partners to manage this as part of the network of relationships they have.”

Looking ahead, Goldie emphasised the need to build a specific set of capabilities, a move which is “starting to play out” at on the local stage.

But the questions now centres around what does it mean to be a technology provider when these cloud capabilities are becoming so diverse?

For Goldie, and his changing ecosystem of partners, creating a collaborative channel will remain critical to ongoing survival.

This article was originally published in the August issue of ARN magazine - to subscribe, please click here