In March 2022, Microsoft announced comprehensive changes to the Microsoft Partner Network (MPN). Initially, I viewed these changes with some apprehension. However, looking at the holistic partner value proposition I do believe that these changes will drive significant growth in the eco-system and assist partners to build their businesses with Microsoft at (and on) their side.
Out with the Gold
The market has become accustomed to the Microsoft Gold Partner model. Identifying as a Microsoft Gold Partner Status has become the industry standard to prove a partner’s commitment to excellence in evolving Microsoft technologies and maximizing the benefits that clients receive when implementing Microsoft solutions and as a validation of their Microsoft Competence.
Effective October 2022, Microsoft will move away from Silver and Gold to new qualifying designations of Solutions Partner and Specialized / Expert. As partners attain the new designations, they will have the choice to move to updated benefits or retain their legacy benefits.
To attain the new solutions partner designation, partners will need to demonstrate their organization’s capability in:
3) customer success (as measured by partner capability score)
Microsoft Commercial Marketplace
Likely the biggest announcement Microsoft made in the last FY was that transaction fees on the Microsoft Commercial Marketplace were reduced from 20% to 3%. A bold and significant statement to enable partners’ transactions via the New Commerce Experience (NCE) to significantly increase their profitability with IaaS and SaaS solutions alike.
Now, more than ever before, partners can transact their offerings on the commercial marketplace at a significantly higher rate of profitability. Why did Microsoft go down this track? My view is that Microsoft is enticing partners to accelerate their journey to utilize the commercial marketplace for growth, to enable business sustainability and give us a slice of the bigger annuity revenue streams emulating from this approach.
The trade-off? Adding 17% to the bottom line comes at a price or rather a partner investment required.
The Microsoft Cloud Partner Program (MCPP) has been designed to ensure partners have a growth mindset and are continuously adding value and scale to their business and the Microsoft Eco System.
MCPP is now tracked under 6 Solution Partner Designations (SPD), namely Business Applications, Data & AI, Digital & App Innovation, Infrastructure, Modern Work and Security, which aligns to Microsoft`s core solution areas, and in turn, the solution areas can be further differentiated by way of granular advanced specializations, catering to niche partners to cover the entire ecosystem.
The performance metric is designed to measure the partner’s ability to grow both their business and that of Microsoft, whilst the skilling metric measures partners on both intermediate and advanced capabilities and the ability to keep growing in these areas over a Trailing Twelve Months period (TTM). The customer success metric measures a partner`s ability to ensure the client`s adoption of their deployed solutions and the continued growth of usage of these solutions or applications.
What’s in it for partners?
Traditional Indirect ISV partners will have some pain in the short term in this traditional cycle. However, over time, the investment into MCPP pays off with sustainable annuity revenue via the commercial marketplace. The solutions partner designation becomes the first opportunity for partners to set themselves apart from the competition by demonstrating their organization’s breadth of capabilities aligned to solution areas. That’s valuable for partners because it’s where we see customer demand, and where the opportunity is for partners to scale to meet customer needs.
If you bought into Microsoft, as it was, it’s time to make the head shift, stop growing in isolation, and ensure your Microsoft Partnership is aligned to MCPP and that you can articulate this partnership via the commercial marketplace channel.