The Stack

Uneasy wait for MSPs as Microsoft goes quiet on partner changes

“A lot of my colleagues in the Microsoft Partner Network are saying ‘we’re just not going to worry about being a Microsoft partner network member anymore. We’ll pay our licences, we’ll do what we need to do. But actually, maybe we even shift to Google’.”

Kelvin Kirby is concerned, and he’s not alone. As CEO of Technology Associates (TA), a Microsoft partner for more than 30 years, he’s been involved in a lot of the changes to Redmond’s partner programmes – including as a former board member and treasurer of the International Association of Microsoft Channel Partners, as well as being a Microsoft MVP for more than 11 years.

Kirby is now the UK regional lead for the Microsoft MVP Reconnect alumni programme and a member of the programme’s Advisory Board. He has served as the EMEA regional director for the Microsoft PPM User Group since 2014.

But now, two months on from the bombshell announcement from Microsoft that it was scrapping its existing partner programme and introducing the Microsoft Cloud Partner Program from October, his firm may lose its current status.

“There is no direct mapping that would allow us even to qualify as a solution provider under the new programme. So we would go from Gold to actually not being a qualified partner at all. And that’s a huge concern to me,” Kirby tells The Stack.

While TA doesn’t have active plans to move to another vendor, the fact Kirby has heard several of his peers talking about such a move “is slightly worrying, obviously, from Microsoft’s perspective”.

When Microsoft announced the changes – which would see partners needing to score 70 points across six different “solutions partner” categories, including some sales requirements, in order to attain Solutions Partner status – the response from many in the channel was strongly negative.

One anonymous Australian reseller set up a petition, calling to “Disapprove October 2022 Microsoft Partner Network Changes” – at time of writing, the petition has reached 793 signatures. And reactions on the highly active r/msp subreddit included many references to Microsoft making a cash-grab and “Satya needs another jet”.

‘I’m glad some of those partners are going’

But not all partners are unhappy.

“I’m generally fairly pleased with the changes – you know, a few concerns, and we would like more clarity on a few things. But generally I think it’s a good move by Microsoft,” says Gordon McKenna, CTO of public cloud at Ensono.

He was previously CTO of UK cloud provider Inframon, which was acquired by Ensono in 2017. Based primarily in the US and UK, Ensono is a $800 million business according to McKenna, with more than 2,000 staff.

McKenna has been an MVP since 2005, and has also part of the Microsoft Partner Advisory Council. He describes the current Microsoft Partner Network as “a stale old programme” that was “due some changes”, and says he saw the latest shift coming.

“If you’re concerned right now about losing Gold and Silver competencies, then I would say that you have not been making the right steps over the last three or four years as a Microsoft partner. Because you’ve been caught out. And if you’ve been caught out, then you’ve not been understanding what’s going on,” McKenna tells The Stack.

“And for me, selfishly, I’m glad that some of those partners are going to fall by the wayside because they haven’t been putting the same amount of effort that I have as a partner. And I applaud Microsoft for that,” he adds.

Kirby agrees, at least partly: “I think it is a culling of the number of Microsoft partners. I mean, I can’t argue with the fact that that was probably needed. And I think most partners that are active in the in the partner programme will accept that that is, you know, a valid thing to do.”

Peter Sweetbaum, CEO of MSP Content+Cloud, told The Stack in an emailed statement: “The changes have been a long time coming and are, overall, a positive shakeup for the partner ecosystem. They allow customers to better understand the real capabilities of partners.

“Under the old programme, competencies were becoming less clear as more partners achieved Gold and Silver accreditations, diluting their impact as a recognisable industry distinction.”

But Ensono’s McKenna does acknowledge some concerns – such as the emphasis on sales. Ensono typically brings in four or five new clients to Microsoft a year which typically have $1 million-plus of Azure revenue according to McKenna – but which may not represent the kind of licence volumes Microsoft appears to be favouring.

“My concerns are, if Microsoft lean too much into the number of new logos then I may struggle with that,” he says.

Kirby has a similar issue with sales: “We deal a lot with enterprise customers and those enterprise customers already have an existing relationship in terms of how they acquire their licences. So although we might be in a position where we influence a lot of licences, we’re not in a position where we’re actually selling a lot of those licences.

“And nor do we actually want to, because we don’t want the overhead of having to manage the licence sales. The commission is so small that it’s not worth us dedicating resources to do that.”

‘That’s just not feasible for us’

McKenna also notes the Microsoft audits for specialisations are challenging, and says even as a big company they “struggled” with completing four competency specialisations a year. McKenna agrees this may be difficult for smaller partners.

“Whenever you’ve got people having to study or people having to take time out to, to do audits and things like that, it takes people away. So I’ll be interested to see how Microsoft come up with helping the smaller businesses with that. Generally Microsoft have been pretty good at supporting smaller businesses,” he says.

For Kirby and TA, though, that support is not evident: “I actually did an analysis, I looked at the new requirements. For us to qualify for the new solution provider status, I would have to retrain a lot of my staff, at a cost of about £90,000 before 3rd of October, in order to qualify for the new programme, and that’s just not tenable. I mean, that’s just not feasible for us to do that.

“It kind of implies that we have resources just sitting around not doing anything. That is clearly not the case, we have a very busy pipeline of work through the next 12 months plus – I don’t have the capacity just to take people out to do revision on new exams.”

Kirby notes TA has spent “hundreds of thousands of pounds, if not millions” on training and development of its staff over the years.

At the heart of the issue is Microsoft’s apparent shift in focus, away from specialism like Project Portfolio Management (PPM) and towards areas such as Teams. “If you’re… focusing on Teams, then there are about seven or eight different Teams specialisations that you could qualify for,” says Kirby.

“When you look at the advanced specialisation, there isn’t one for Project Portfolio Management, for example. Now I’m using that as an example, because that’s very close to home. But when I look right across the board, there are many, many gaps. Not just in PPM, but in many other areas as well,” he adds.

Hanlon’s Razor

It’s easy to attribute these changes to a shift in priorities by Microsoft. But one long-standing Microsoft channel partner, who requested anonymity, raises the prospect that some of the difficulties in the new Microsoft Clout Partner Program may be more down to incompetence than deliberate strategy.

The partner said of the new programme there are “lots of areas where it’s not been properly thought through. And I guess that’s what happens when somebody gets locked away during lockdown for 12 months, without having an opportunity to speak to somebody.”

They claim Microsoft has form for half-baked partner projects: “The partner centre that was introduced nearly two and a half years ago, that has been broken from day one. In the in the month after that was released, we had I think it was 32 different support issues now purely around the partner centre not working properly. And that’s been continuous – we’ve had at least, I would say four or five of those continuously through to today.”

The MSP executive also describes Microsoft’s approach to its partner network as “almost like Big Brother – breathing down your neck, watching what you’re doing”.

“What we’re seeing is Microsoft continuing to impose more restrictions on how partners communicate and deal with their customers. Almost you might call it interfering with the customer relationship. Because Microsoft is close to being obsessed with managing that relationship,” they told The Stack.

At the same time, they claim Microsoft can’t get basics such as licence renewal right. They describe an issue with a tenant where, thanks to an issue applying the firm’s Internal Use Rights to the tenant, it has been offline for almost three months.

“I have a regular call now, every three days probably, with a Microsoft support person to try and get that fixed. And it’s just bizarre, we can’t even purchase a licence on that tenant. And it’s nothing to do with validation of credit cards, we tried four different payment methods, etcetera, etcetera. It’s just, it just fails. And I think basically, Microsoft don’t know what the problem is,” the MSP executive says.

Once the tenant reaches 90 days offline, it will expire and be wiped – taking with it all the IP and work the MSP has on there. And while they do have a backup, that is dependent on being restored to the same tenant – so now the MSP is faced with many days of extra work to rebuild it, because of a billing issue.

“At the end of the day, you know, my view is Microsoft should be able to fix this. I mean, yes, it wouldn’t seem insurmountable given that we are not the only ones that have had this problem,” they say.

The move to the One Commercial Partner model in 2017 also comes in for criticism from the anonymous executive. They say this has forced MSPs to have conversations with a range of different contacts for each customer, instead of just a single point of contact.

“Even just arranging a meeting has been like herding cats, everybody’s busy trying to find a slot in somebody’s calendar, meant that chances are you were looking at three weeks’ time, to organise a meeting. So… well, we stopped. We stopped doing any of that liaison, to be honest. And we just did the liaison ourselves with the customer,” they say.

A little bit more consultation, please

“I often describe our relationship with Microsoft as a bit like a marriage, you have your ups and downs. You have your arguments, you have your disagreements, you sort of break up and make up. And it can often be a sort of love-hate relationship. But I think at the moment… It’s a rocky patch,” says TA’s Kirby.

“I’ve been around long enough to know that through all of the 30-odd years I’ve been working with Microsoft, there are always ups and downs, and Microsoft is trying things out. But I just wish that they would be a little bit more consultative in their approach, and a little bit more open to listening to partners and making changes.”

He notes Microsoft has a habit in recent years of presenting changes as “take it or leave it” with the approach of taking feedback for 12 months and then tweaking after the fact.

“Well, the problem with that is 12 months’ time is too long away, you’ve got to start listening to what partners are telling you now, so that you can make these changes before it goes to formal release,” Kirby says.

“So I would hope that Microsoft is sensible enough to kind of take that on board. You know, they’re all intelligent people there. Of course they are. But I just think that little bit more, as I say, liaison consultation would help to smooth the waters.”

While more supportive of the changes, Ensono’s McKenna agrees: “It needs more clarity, I think. Microsoft will definitely have to do some work.”

He agrees the partner ecosystem needs to keep smaller players to stay healthy: “The problem with just keeping all of the big ones in, you [end up] having a stagnant market when those big ones tend to drop off, or flip to a competitor – you’ve not got the smaller ones coming up into the space.”

Content+Cloud’s Sweetbaum also acknowledges help is needed: “For smaller partners, the changes are more difficult to accommodate, which may be recognised by Microsoft in some way.”

The anonymous MSP executive says changes could be coming: “My suspicion is that they’ve seen some of the feedback already, they’re probably going back and looking at it again. And you won’t hear from Microsoft again, until they’ve made a further announcement about probably additional changes in the programme.

“We always know, when Microsoft go quiet for a period of time, it’s because they’re beavering away doing something in the background, but not prepared to talk about it. So maybe the there are changes afoot? Who knows.”

The Stack approached Microsoft for comment, but did not receive a response by time of publication.

Until any changes are announced, the future for Microsoft partners such as Kirby remains unclear: “We’re kind of sitting on it at the moment and waiting to see, because it’s too short a timeframe anyway for us to plan.

“I think we’re going to get to a point where come third of October, we will just not be a solution provider in the new programme, and that’s disappointing and it’s sad. I think it’s very sad.”

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