Analysis of the Microsoft reorganization from a Microsoft partner point of view

Michiel van Vliet
Jul 24, 2017 · 3 min read

Microsoft basically had a sales model which has been very successful but which was 10 years old and built for a world were business customers buy large enterprise agreements based on PC installed base count. A sales person worked towards selling and renewing a 3 year license and then disappeared. Over the years Microsoft has retuned the model by adding Specialist sales roles for new technologies bolting this on to the existing organization with the result that the Specialist team unit outgrew the Account Team unit by a factor 2. Also Microsoft has changed incentives to get the existing sales people to sell more cloud services.

Additional anomalies where: enterprise accounts split between two orgs (EPG & SMS&P). A partner organization split between SMS&P, EPG, DX, and some other partner roles in BG´s and marketing.

However in a cloud world buyers buy more online directly. So the overall buying experience, marketing, onboarding support and continuous support to help drive usage are important. A lot of the current Microsoft salesforce is relationship based with limited technical skills. In this new world all sellers need to be technical.

Basically at the country level the reorg comes down to:

· The corporate account segment (CAM-S) from within Small and Medium business (SMS&P) will move into EPG creating a one enterprise commercial team.

· The Specialist Team Unit will be elevated to management board level reporting directly to the Country GM

· A new unit called Customer Success will be created with a direct reporting line to the GM (my guess is MSFT will be recruiting from Salesforce and other Saas companies for this role)

· Industry focus within commercial EPG (only 3 industries: manufacturing, retail. financial services) and no change in the public sector verticals. Creation of first party (MSFT owned) vertical IP.

· Integration of all separate partner orgs into one One Commercial Partner org.

· Organizing all the field horizontal sales and consulting org into 4 workloads: Modern Workplace, Business Applications, Apps and Infrastructure, Data and AI (mostly seems logical to me except for seeing apps and infra in one bucket)

· Locally the Developer Experience org and the Consumer orgs will be without leadership. On the consumer side this indicates a change in strategy with even less focus on consumer. The DX org seems to be dismantled at a corporate level. You can read more here.

Model wise I see a bit of Oracle with a bit of Salesforce. (which is understandable because Althoff comes from Oracle and Ron Huddleston who leads the partner org is ex- Salesforce and ex Oracle).

Oracle like: removing local SMB sellers centralizing in an area level telesales function and starting to build (or buy?) first party IP for specific verticals.

Salesforce like: adding a dedicated customer success team (this is the only investment area I see. All the other changes are efficiency changes)

So how is this different from what was there?. The Microsoft country manager will be more hands on and focused on enterprise and not on consumer. The EPG lead will be losing a large part of his/her org with the STU moving out. The STU will be focused on enterprise and they will be the hunters and the Customer success unit will be the farmers. What used to be SMS&P does no longer exist. The CAM-S segment moves into EPG. But the new partner org absorbs EPG partner and DX partner resources. What is not clear to me is the execution in SMB. Apparently the direction is set by marketing locally but the execution?

Some remaining questions I have

What happens to the industry teams that were not mentioned as key verticals? Will they disappear or will they just be less important?

The engagement on the field level with what used to be Developer Experience is unclear

On July 5th 2017, MSFT announced 3000 job cuts. This is a lot less then what I expected. So on the one hand I am happy for my ex collegues but on the other hand it makes me wonder if the changes will be profound enough).

What does this reorg mean for a Microsoft partner? I guess this depends on what type of partner you are. I can tell you from my point of view as a partner who is focused on enterprise, providing services to larger customers. Largely this is a positive change for us as it makes it much clearer on how to engage with Microsoft. Less interlocutors. The downside will be to see who remains of the people we have built relationships with for years.

Michiel van Vliet

Written by

#TechCEO driving #DigitalTransformation through people. Interested in and shareholder of the global scale platforms #MSFT, #Google, #AWS, #Facebook.

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