DENVER – It is the day before the opening of the annual Microsoft Worldwide Partner Conference here and I may be way off base with this next comment, but I think Microsoft will announce either today or sometime during this conference that it wants to be a bank for its channel partners.
There are more than 7,000 people attending this conference and most of them are channel partners. You can see them walking around 16th Street, the main drag of the Mile High city. And, I will go out on a limb here, but probably 95 per cent of them need some kind of financing option other than their own bank.
Entering the hotel yesterday there were two clues to the notion that Microsoft wants to be a bank for its channel partners. My first clue was the room card. It had a photo of Ben Franklin on it with the tag line Smart Pay – The Smarter IT Solution. The card had a Web site, www.microsoftfinancing.com. The do not disturb door card also had a similar promotion.
Financing is risky for sure, but it can also be a win-win situation. Risk, of course, is if the partner defaults on the loan. But Microsoft is really serious about its CRM package and its Dynamics offerings.
And let’s face facts: the CRM package is relatively new to the market, and the Dynamics solutions are cobbled together programs from various companies Microsoft has acquired over the years. I know that was a bit too harsh, but it is nothing that the channel has not said before.
Financing, I believe, is a way to bridge the gap between customers and partners and it can also alleviate fears. It is Microsoft that is putting its money where its month is.With Smart Pay, Microsoft is willing to finance the entire deal with no hidden costs. This includes the hardware and the services. Microsoft will even pay the reseller first. They are promising to pay within 24 hours of the deal being closed.
There have been several channel studies over the years that state when a customer is offered financing the deal size increases dramatically and partner margins rise. Financing has helped partners improve cash flow, which has always been a major concern for smaller resellers in Canada.
There is also room for potential with Smart Pay because there’s a chance for resellers to shorten sales cycles, up sell and cross sell, build annuity streams with customers, create money making migration plans with customers, and reduce receivables.
Now this is not the first time Microsoft is offering financing, but what is new is Smart Pay may overcome spending objections and make channel partners potentially profitable with Microsoft CRM and Dynamics.
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