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Can you Out-Niche Microsoft?

Two industry veterans advise partners on how to team with the giant from Redmond, Wash.

(The following is an excerpt from “Partnering With Microsoft: How To Make Money In Trusted Partnership With The Global Software Powerhouse” by CMP Books)

Microsoft has a staggering list of product offerings for end-consumers and corporations of all varieties. The list is growing, too, into other sectors previously unclaimed by Microsoft.

Consider Microsoft’s growth from its two main product lines: the Windows operating system and its Office Suite, each of which comes in end-consumer, professional, developer and small business editions.

Microsoft’s products now include a multitude of other consumer and professional products: from Encarta to MapPoint, Visio to Great Plains, Xbox to SmartPhone (Windows Mobile-based) mobile devices, as well as enterprise-scale products: Exchange for e-mail services, Internet Information Server for Internet services, SharePoint Portal Server for intranet/Internet portals, SQL Server for databases and a host of Windows server-based management offerings for high availability, performance and enhanced security.

In addition, Microsoft is investing more heavily in security software and has released a new edition of its product in the network-security space (Internet Security and Acceleration Server) to compete with other firewalls, including such industry-leading firewall appliances as Cisco’s PIX and Nokia’s CheckPoint. It also intends to launch new anti-virus and anti-spyware products and services in the 2005-2006 timeframe.

Microsoft is a global marketing machine that drives its products into all geographical areas and every market sector irrespective of size or industry. One of Microsoft’s strongest attributes is its ability to respond adeptly and speedily to competitive threats, to catch up to and then surpass its rivals. Microsoft has also branched into Internet-delivered content, from MSN to HotMail, customer relationship management and enterprise applications, and has developed a search engine intended to rival Google-all on a similarly global scale. Finding a niche unclaimed by Microsoft is a tough thing to do these days. Unless your firm manufactures hardware or unique software, or provides services around open-source or “big iron” technologies, it is safe to say that Microsoft has staked a claim in almost every known IT software sector. History suggests that when Microsoft stakes a claim where it never had a presence, and then focuses on winning the space, it will. This fact may not be appealing to software firms that have nurtured a profitable niche, but it is valuable for the entire partner ecosystem that is aligned with Microsoft.

Partner with Microsoft

If competing against Microsoft is not an option and working in a niche unclaimed by the software giant is increasingly unfeasible, the only other option for high-technology firms is to partner with Microsoft. But what are the overall benefits of partnering with Microsoft?

Successful Microsoft partners agree that the following benefits are compelling. Leveraged branding and co-marketing.

With Microsoft’s global name recognition and market power, its partners gain credibility and market traction by partnering with Microsoft on product- and service-branding and marketing initiatives. Microsoft has significantly increased its investments to allow partners to leverage the Microsoft brand to sell their products and services. Referrals by Microsoft to new business opportunities.

With sales tentacles into every industry and geographical area, Microsoft opens doors to potential business for its partners more capably than most other global partners. Microsoft has thousands of account managers worldwide that oversee and represent thousands of partners. In 2004, Microsoft began featuring with each product advertisement a plug advising customers to avail themselves of services partners and a link to the Windows Resource Directory where services partners can be searched and the Windows Marketplace where software firms can list their products and services. Grants, industry recognition and awards. Microsoft routinely recognizes its best partners with grants-in cash or in kind-as well as collaborative projects that are the subject of industry articles and case studies, and widely publicized awards. Among Microsoft’s global channel of solution providers, Marketing Development Funds (MDFs) and Business Investment Funds (BIFs) continue to drive pilot projects and early adoption of new technologies. More recently, Microsoft has steered more funding to its “Make It Right” Fund to address customers’ security issues and pain points. All of these benefits serve as engines for technical and commercial opportunity development, with partners as key beneficiaries. Technical support, software, technical training and certification. Microsoft actively works with its partners to ensure that they are provisioned with resources, supported and trained, and that their employee and product certifications evidence Microsoft’s backing, which further helps in branding and co-marketing as well as in deployment of products and services. In recent years, Microsoft has begun sharing resources once reserved for its own field sales force, such as increased pre-sales technical support for its base of solution providers and extended support systems to partners who also need Microsoft resources when facing competitive proposals from Linux in the market. In summary, partnering with Microsoft extends your business and technical development opportunities into new accounts and new markets, potentially worldwide, with the globally powerful backing of the company.

How to Partner with Microsoft

What must a partner do to achieve these and other benefits? What are the characteristics of a successful partnership with Microsoft? How does your firm partner with Microsoft? How will your firm work with Microsoft? This book answers these questions in depth and with real-world detail. Generally, though, it is clear from all available evidence that by increasing and working your firm’s connections to Microsoft-at various levels and with different groups in the organization, playing to the company’s culture and strategy-you will expand the terrain of shared interests between your firm and Microsoft.

Doing so will help you enhance market traction and make more money in a trusted partnership through effective co-marketing, efficient channel relationships, assured referrals-joint success in selling your complementary products or services in the United States and, indeed, around the world.

This book demystifies Microsoft’s culture, global organization and strategic trajectory, and orients you to the tactics required to increase and leverage your firm’s connections to-and trusted partnership with-Microsoft. We intend to help you realize optimal success in your business by working with Microsoft.

Look out for more installments of Partnering with Microsoft later on this year in CDN This Week.