(The following continues excerpts from “Partnering With Microsoft: How To Make Money In Trusted Partnership With The Global Software Powerhouse” by CMP Books)
As indicated, Microsoft has more than 841,000 partners. They are organized and their interactions with the company are structured in the “Microsoft Partner Ecosystem,” which is the focus of Chapter Two. Generally, though, Microsoft’s partners fall into the categories outlined below.
Discounting the myths above about partnering with Microsoft, partners in each of these three categories have succeeded in doing so.
According to Microsoft’s tally at the end of FY04, there were roughly 330,000 services partners worldwide. Of these, 334 were Global Systems Integrators (GSIs), such as Capgemini, HP, EDS, Unisys, Wipro and Accenture. These are typically very large firms with global reach in the systems-integration business.
Of less geographically sweeping scope, Regional Systems Integrators (RSIs) were roughly 200 in number. RSIs have a presence in one or more of Microsoft’s global regions, but do not extend globally.
By far the largest set of SPs is the Local Systems Integrators (LSIs), which amount to nearly 328,000 systems-integration firms spread around the world. These are generally smaller firms with presence in one or more distinct local markets, but not inter-regionally and certainly not globally.
Clearly, there are many successful systems-integration firms that are Microsoft partners. A few of the largest are named above, but there are far more of them in the RSI and LSI ranks-such as Intellinet, Interlink Group, BORN and Tectura. Rounding out the list of SPs are the Microsoft Certified Partners For Learning Solutions (MCPLSs)-Microsoft’s channel of technical training partners, formerly known as Certified Technical Education Centers (CTECs)-that amount to approximately 1,250 around the world.
New Horizons, a US-based publicly traded company, is the largest of the MCPLSs, with operations in 54 countries.
Microsoft counted 449,000 software-reseller partners in FY04. These firms are of varying size and market focus. For example, there were 582 Large Account Resellers, or LARs, worldwide (only about 20 of them were in the US) that are authorized to sell Microsoft software to corporate accounts; these firms-such as ASAP Software- deal in large volumes of software sales. They are also authorized to sell Enterprise Agreement (EA) licensing in countries where EAs are not directly billed to customers. Direct Market Resellers (DMRs), such as CDW, focus on selling Microsoft software to specific market verticals not necessarily including those served by LARs.
Additionally, there were more than 282,000 Value-Added Resellers (VARs) that provide integration and other services for Microsoft software that they sell to smaller businesses and organizations.
Microsoft listed 370 distributors, which are firms that sell its software as intermediaries to smaller resellers. However, Microsoft has narrowed the number of global distributors significantly in recent years.
Among the reseller ranks are retailers, such as CompUSA and BestBuy, which number 14,690 and sell Microsoft software to consumers and small businesses.
Original Equipment Manufacturers (OEMs) are the other major class of partners that resell Microsoft software, which comes bundled with their hardware solutions, and they develop integrated PC and server systems in collaboration with Microsoft. These number 482 in total and include such well-known firms as Intel, HP (and Compaq) and Dell. And there were nearly 150,000 Systems Builders-“whitebox” manufacturers who bundle Microsoft software with their own manufactured hardware solutions-in Microsoft’s list of FY04 partners. Of these 449,000 firms, one can readily identify more than 50 companies that are widely known to be eminently successful as a result of their partnership with Microsoft.
Microsoft listed 63,000 software development partners in FY04, referred to as Independent Software Vendors, or ISVs. Of these, 213 were classified as global ISVs with distinct product sets that are sold worldwide, such as Citrix, Veritas and Executive Software-while 58,802 were denominated as “breadth” ISV-partners.
Breadth ISVs have software products that fall into and among various functional categories- such as office automation, server utility, and the like-but lack the global selling characteristics of the larger ISV partners, whose wares are more tightly packaged around a set of complementary functions of more universal appeal.
Finally, Microsoft listed 4,364 “Account Managed” ISVs, software developers whose products- whether shrink-wrapped or custom-developed-are more integrated with Microsoft products and whose leveraged selling accentuates the sale of their complementary Microsoft products.
Microsoft works most closely with this category of ISV in defining and delivering products, as well as in selling them with wrap-around services. Successful ISV-partners include those mentioned above in addition to those that were acquired by Microsoft, such as Visio and Great Plains Software.
Again, there are countless success stories among all three categories of Microsoft partner that either refute or qualify the myths mentioned above about partnering with Microsoft. Their success has entailed staying close to Microsoft and collaborating with the company for their mutual benefit.
There is another list of companies that met their demise as a consequence of not partnering with Microsoft. One need only consider Banyan, Viant, WordPerfect. Such companies opted to distance themselves from Microsoft, inevitably to their own peril. And there is a short list of companies that selectively partner with Microsoft while maintaining a competitive stance where appropriate. Consider Sun Microsystems, one of Microsoft’s fiercest competitors, which is now a beneficiary of and de facto as well as de jure partner with Microsoft for Java development even as it continues selling Solaris servers and other Microsoft-competitive software, including Linux on Intel platforms.
And IBM-the longest-standing Microsoft competitor- routinely partners with Microsoft to set global technical standards-for, eg, the Web services stack, and networking protocols and services-while it sells Linux software, hardware and services that compete with Microsoft technologies. Even HP and Dell fall into this category by selling both Windows and Linux server offerings.
In brief, the biggest and most successful high-technology firms in the world have come to terms with Microsoft’s worldwide stature in the IT industry, and all partner with Microsoft to some extent. Those that do not tend not to survive or at least to thrive as do Microsoft and its closest partners.
Watcj for more installments of Partnering with Microsoft later this year in CDN This Week.