Microsoft continues inching into ISV Turf

“Microsoft has always been a partner-led company, and we are committed to creating more opportunity for our partners across our businesses.” and “This ethos of being partner-led will be there in everything we do“. Satya Nadella has said these things, but I am wondering…

Lip Service?

One of the major factors that brought me to transition my company from a Salesforce Consultant, to a Microsoft Partner in 2011 was the “Partner Ecosystem” story. After almost 10 years with SFDC, during which their relationship with consultants was borderline antagonistic, I was fed up. Microsoft sounded like a breath of fresh air. But their “Partner Ecosystem”, particularly for ISVs, has been weighed on the balance… and found wanting.

No Bigger Advocate

You would be hard-pressed to find a bigger advocate for Microsoft’s ISV ambitions than myself over recent years. Having drank the Koolaid and creating I.P back in 2015, as we were all strongly encouraged to do, I had a vested interest in their effort. Many of my posts started out apologetic for my previous encouragement, but ended up positive and hopeful. But, I am starting to lose hope that Microsoft will get it right.

Was Saleforce Better?

There is no doubt that at the time I came over in 2011 Microsoft’s business applications were complete *** compared to SFDC. This was clearly demonstrated by their market share. I took it on as a personal challenge to seek out anyone at Microsoft who would listen, and press annoyingly for change. Over time, my incessant ranting made its way through the grapevines of Redmond, and I was invited to participate in many things. Multiple Partner Advisory Councils, more private phone calls and in-person meetings with Product Managers and leaders than I can count, and an MVP designation. I can honestly say that today, Microsoft has an undeniably better product than Salesforce on every measure other than market share.

Not Alone

Before I start sounding like some kind of narcissist, claiming to have single-handedly straightened up the leaning tower of Pisa, I was far from alone in this mission. While it is satisfying to see aspect of products or programs that I know I had a direct influence on, many others had similar influence over other critical aspects. Each of us “trouble-makers” have a vested interest in our mutual success.

My Biggest Disappointment?

Almost every aspect of the ISV effort for Business Applications ISVs has been found “wanting”. Up until last year, the various aspects of the ISV efforts have been led by lower level soldiers with little authority, no imagination and no understanding of the ISV business. “Hi, I’m Joe, I’m in charge of this important ISV facet, I just transferred from the MS Paint development team where I have been for the last 15 years. How can I help?” Sorry Joe, but you know less than my dog about this business.

Not Guggs Fault

After years of watching the revolving door of low-level solders step up to within two feet of their targets, raise their rifles and miss… a General showed up. Steven “Guggs” Guggenheimer, a long-time veteran of Microsoft and self-described “Fixer” was brought in. I first met Guggs at a Partner Advisory Council meeting with about 15 other ISV leaders. He struck me as a no-nonsense guy who planned to get things done. He also struck me as a guy who did not need, or want, our opinions.

ISV Connect

Guggs’ brainchild was ISV Connect. A program developed mostly in the dark, that basically seeks to take a share of ISV’s revenue, in exchange for some benefits. It is not optional, it is “Pay to Play”. The program was launched in lightening speed with agreements being sent out to ISVs almost immediately who were expected to sign or leave. The minimum tier is 10% of your revenue, in exchange for some benefits from Microsoft that in my opinion are mostly worthless, at least for existing ISVs. If you opt into, and are accepted into, the 20% tier, there was an additional promise of Co-Sell business, meaning Microsoft’s own sellers, would pimp your solutions. At a recent Inspire session Guggs, as well as in a few interviews I have done with him,  proclaimed the program has been wildly successful for ISVs. I have not met any of these ISVs, and Guggs just announced his eminent retirement. Now what?

Back to my post title

The Microsoft ISV landscape has become a risky place to be. In order to continue participating, we now have to find another 10% or 20% of margin. For those with paid resellers in particular, this is a huge challenge. If the program was producing 10% to 20% more business for ISVs that would be one thing, but that is not what I am experiencing, nor any other of the many ISVs I have talked to.

Another risk is Microsoft’s continued encroachment into first-party vertical solutions. If you were not lucky enough to be acquired, like Field One, Microsoft has caused problems for several ISVs as they entered their spaces. Project Management and Marketing are a couple of areas that Microsoft has moved to displace existing ISVs. I was also very suspicious of the entire Accelerators program. Their recent announcement of an Asset Leasing Accelerator sounds pretty damn vertical to me.

So what’s the play?

What is the message we are getting from Microsoft? “Come join our booming ISV ecosystem, where we will take a share of your revenue in exchange for basically nothing, and if you are wildly successful in spite of that, we might just knock you off!” I would like to believe that is not the intent, but as my ex-wife used to tell me, “Actions speak louder than words“.

Is there still reason for hope? Maybe for a lucky few, but I am not seeing any for the masses at the moment. Let’s see what Guggs’ successor can do.