Microsoft’s FY18 commercial sales strategy
I have to make sure my team understands the Microsoft strategy and organizational changes. So I am currently going through all of the Inspire sessions and material to get organized and as I have to educate my team I might as well document my thoughts here. I will do this in a piecemeal fashion. On my last article, analysis of the Microsoft reorganization from a Microsoft partner point of view, I got an overwhelming amount of views (>18K of which more then 5K from Microsoft Employees). I attribute this to a mix of knowledge of Microsoft as an organization, the right timing and some common sense conclusions. Thank you to all people that have read the article and shared comments.
This article is based on a session by Chris Weber- CVP of the Commercial (growth) organization and is on Microsoft´s general sales model. The partner specific changes I will describe in a separate article.
Chris started to describe the case for change based on feedback from some of Microsoft´s largest customers. What was their feedback? (in italic in this article quotes from Weber)
1. Stop selling us licensing and focus on making us successful through consumption, usage and deployment (help us be successful)
2. Be more industry relevant. Know our business
3. We are committed to your cloud but help us get there, for that we need your people to have deeper technical expertise
4. You are way too complex to do business with, we want more simplicity, less complexity
I guess this could be the feedback of any customer or partner that has worked with Microsoft over the last couple of years. Chris then goes on describing some of the areas of change represented in this picture

(Account) Segmentation
MSFT´s segmentation was not focused on the highest growth accounts, but was based on outdated KPI´s like pc count and employee count. Furthermore it was always strange that a part of the enterprise sales motion was hosted in the Small and medium business group (SMS&P). So basically you had an enterprise motion in EPG and a mini enterprise motion plus a scale motion in SMS&P. Microsoft is now cleaning this up by moving the CAM-s segment (more or less) into EPG. Also MSFT covered too many accounts from a field resource perspective.
Scale engines.
I don´t know about you but any modern (SaaS) solution I try I can try for free and then I have immediately somebody on email or the phone offering me help to use the software. This motion is very engrained with SaaS companies. MSFT is not very good at this and that is why they are now putting a lot of money into scale engines (global demand marketing, inside sales). This is not supposed to be a direct sales motion and will be a lead generation engine for partners according to Weber. Let´s wait and see.
Increase consumption and usage
I think the major milestone is Microsoft openly recognizing that it is impossible for partners to compete through the CSP program (Cloud Solution Provider) when there is an EA (Enterprise Agreement) in place. What Weber hinted at is that this will be fixed and that there is a roadmap for this to be done over the next 12 months. Also anybody on a compensation plan in Microsoft is now paid on Azure consumed revenue, not billed.
Another change that MSFT has made is separating the consumer efforts from the commercial efforts. In Webers´ words when they were mixed it wasn´t good for either. It slowed us down on the consumer side and added complexity on the commercial side. The consumer side will report directly from the field into Chris Caposella´s organization. Both organizations can now run on a rythm relevant to that business.

Customer success team
In Weber´s words this team will be extremely partner centric. Think of MSFT building the foundation, the assets, the tools and the automation that we can provide to all of you to drive usage and consumption
One Commercial Partner
Microsoft always had partner teams in multiple orgs, that is now changing with the One Commercial Partner organization. Also MSFT always labelled partners into a specific box like ISV, SI, Disti, LSP. These boxes make less and less sense as the partner business models are blurring. Now MSFT has a single partner org that thinks about capabilities you have versus putting labels on you.
Customer Segmentation
MSFT is moving from 6 segments to 4 creating an enterprise sales motion in Enterprise and a scale sales motion in SMC

Enterprise commercial model

As I outlined in my previous article the STU (Specialist Team Unit) is being elevated and a new CSU, customer success unit is being created reporting into the country manager. Most of the Account Team Units (ATU´s) will be industry aligned (understand the customers’ business, talk in their language and bring solutions to market that are relevant to that business)
The Specialist team Unit and the and Customer Success Unit will be aligned to the 4 solution areas, Modern workplace, Business applications, Apps and infrastructure and Data and AI. These solution areas are more aligned to the way a customer buys. Account sales reps, STU and CSU compensation is aligned along these solution areas. Also MSFT has reduced the number of role types in the STU to get more clarity and has gone deeper on the TSP role. MSFT is investing in a more targeted and deeper technical skill.

Commercial software engineering is new name for developer efforts in the field (former DX and before that the DPE organization).
MSFT is focusing on six industries initially. Manufacturing & Resources, Financial Services, Retail , Government, Health & Education. That was one of my questions. Now Weber is answering this. It doesn´t mean that if there is an industry that is not listed here it is not important. MSFT is sticking its´ toes in the water. These are the industries we go big on. There is agreement from the engineering teams to build some ´light weight´ IP around this. There is a set of emerging industries we will continue to look at.
SMC commercial model
Global demand center. Filling up the funnel with leads for all of us to take advantage of (us is MSFT and Partners)
Inside sales
This is the biggest single investment MSFT is making. There will be two engines within inside sales: 1. targeted sales coverage (corporate segment with account and territory ownership plus investment in solution specialist and technical specialists). 2. A demand response engine that will be connecting leads that come from global demand center to partners.
Marketing and Operations and field sales locally for the largest opportunities in corporate accounts.
The most critical asset here is one commercial partner. One common denominator between enterprise and SMC is the one commercial partner org.
As a partner. If there is anything you take away from today is how do you get aligned with these solution areas and connecting with the key roles
Business Priorities
These are the 7 business priorities for MSFT in FY18. Weber commented that within the O365 priority the single biggest opportunity is the corporate and SMB space. We are super low penetrated. We have not made the progress we need. There will be special incentives around new O365 customers and seats in that segment.

Finally, Weber closed with some advice for partners. Build unique IP, have more industry relevance and inspire our customers and field.
