One of the core building blocks of Microsoft’s success over the past decades has been its close relationship with partners. The Microsoft Partner Network (previously Partner Program) has helped Microsoft reach (via their partners) every conceivable sector of the myriad markets they service. And in return, Microsoft was known to be very loyal, supportive and even protective of its partners (there’s even books written on how to best work the relationship).
But that’s been changing over the last few years. Resellers are feeling the pain the most I expect, as Microsoft opens up its own retail stores, experiments with subscription models and grows its online sales channels (Microsoft Office for example makes a sizeable proportion of its revenue directly from consumers, especially those who download the 60-day trials and then buy an activation key). Hosted services are next in line, with Microsoft price-cutting its way to market dominance –> bad luck if you are a reseller trying to make a buck there.
ISVs aren’t immune and will increasingly have to look over their shoulders as their segments get taken over. Anti-virus is an example perhaps (financial software isn’t :-)) , but the real danger is if you are a partner ISV in the health or educational sectors – be very careful.
Microsoft based consulting companies should also be wary (unless you’re at the big end of town), as they find themselves competing more with Microsoft’s own consulting services and partnerships – entities that are continually scaling up.
Is this wrong?
Is any of this wrong? Or unexpected? Of course not. Microsoft is a business with demanding shareholders and strong competition from other vendors. It needs to push ahead.
So, this isn’t a note to criticise what Microsoft are doing – in fact, some would say it’s been too long coming.
But it is a wake up call to Microsoft Partners. Be wary of counting on continued loyalty from Microsoft in your particular market.