Three Channel Implications of the New Microsoft

On Thursday, Microsoft announced a huge reorganization and shift in mission. This article covering the announcement is a long read, but well worth it to gain some insight into what Microsoft thinks is important in a technology landscape that has been transformed since the PC-centric era that Microsoft helped usher in and maintain over the past 20 years. There are several interesting aspects of the re-alignment, especially for channel partners who base a great deal of business on Microsoft systems.

The primary theme for the new direction is “devices and services.” Microsoft CEO Steve Ballmer introduced this vision a year ago and now Microsoft is organized to execute on that vision. At first glance, it may seem strange to leave software out of that theme, but it’s actually a savvy move. Fantastic software can exist without the devices and services being fantastic, but it doesn’t work the other way around. Microsoft won’t lose focus on software, so by directing effort to areas that have not been traditional strengths, there’s a better chance of building out a robust ecosystem.

These are the guiding principles Microsoft says it will use as it moves forward:

• A business model based on partner and first-party devices with both consumer and enterprise services: It’s important to note that Microsoft does not plan on separating strategies into consumer and enterprise arenas.
  
  
• Optimization for activities people value most: Microsoft plans to capitalize on its knowledge of day-to-day digital activities, but it will need to prove that it can translate that knowledge from a PC world to cloud and mobile.
  
  
• A family of devices powered by a service-enabled shell: Windows 8 had a promising vision, even if the execution fell short. A consistent and familiar experience from device to device is a good goal, but there’s more work to do in matching experience to form factor.
  
  
• Design for enterprise extensibility and needs: This is Microsoft’s best card as they play ecosystem poker with Apple and Google. Neither of the other companies comes close to matching Microsoft’s enterprise install base or the know-how it has built up.

There’s a lot more that could be said on Microsoft’s strategy and how it is positioned in various areas to move forward, but I’ll wrap up by focusing on the implications for the channel. Microsoft’s channel partner program is another one of its strengths, since neither Google nor Apple has a program of such magnitude. Some may question Microsoft’s channel behavior based on recent moves, but it would be shortsighted to assume that Microsoft isn’t planning to use the channel heavily going forward.

There are three main takeaways for channel firms as they digest the changes coming out of Redmond:

1. Familiarity with Microsoft’s entire portfolio is critical. Microsoft plans on building services that are all connected and providing a seamless experience for end-users. Customers who are looking at one Microsoft offering may be enticed to choose an additional one based on increased ease of use. Channel firms will need to know how everything works together and when they have an opportunity to suggest a whole package where the customer may be thinking of a point product.
   
   
2. Familiarity with the other ecosystems is just as important. Microsoft, Apple, and Google all have a vision of end-users who go all in on a single environment. The reality is that most people will split time between two or all three. Each company is making sure that it can cross-pollinate in the other systems. For example, Microsoft recently released an iOS app for Office 365 customers. As BYOD and other factors create diverse work environments, solution providers must be able to build optimal solutions across platforms.
   
   
3. Cloud and mobile have changed everything. One of the largest technology companies in the world is undertaking a serious transformation because they see the technology world has shifted. Though the changes are drastic, they are still rooted in the company’s assets. Channel firms that haven’t already integrated emerging technologies should probably move quickly. (Tip: CompTIA education can be a big help with this).

If you’ll be at ChannelCon, I’d love to hear your thoughts on the new Microsoft. Look me up in the member center or reach out on Twitter to set up a time.