Sales & Services Partners Transformation

Hello! If you are an IT company, this article applies to you, regardless if you are a Microsoft Partner or not, the IT environment has evolved and how we do business is evolving as well. Customer Centricity has a stronger meaning today, changing from IT companies being good resellers, finding better prices, driving proper software lifecycle management to avoid mis-licensing, to now becoming an integral part of the Customer's Digital Transformation, bringing IT solutions tailored to their industries, helping them to embrace and manage Cloud, saving costs, and more!

What's the future of IT companies and why this is happening?

Let's look together into some of the main changes happening in the IT ecosystem, switching from Resellers to Services Partners, becoming Sales & Services Providers. First, I suggest you watching the video below, which will give a better view of how Microsoft goes to market and the different roles our Partners are playing today, with us and as a community.

Resellers & Services Partners

The major change happening is how Services Partners are becoming more and more relevant in our ecosystem. As licensing gets automated into one single transactional platform, the sales activities are now related to showcasing Business Solutions, delivering Workshops, designing Cloud Environments, and being able to Deliver!

• GSI Partners, like Accenture and KPMG, are now big players in our partnership, specially in the Enterprise customers, where complex environments need different experts and a larger delivery team.
• Specialization is not an option anymore. Local SI (System Integrators) and MSP (Managed Services Providers) have to think, design and create solutions tailored to each Customers and/or Industries they work with. Having the right tech team skills is important to fulfill the demand for Delivery.
• Large or Small Resellers still play an important role, but they succeed now when partnering with Services Partners (GSI, SI, MSP), becoming or building a Services arm, or relying on ISV IPs to build bundle offers.

Pre-Sales & Post-Sales Activities

Our traditional sales activities usually follow a deal flow, from 10% to 100%, where 100% means the deal was closed, the contract signed and the revenue recognized. Well, in the new era it does not work like that anymore. Closing a deal is just the beginning, and Delivery is probably a more critical step, making sure Customers are using what they are paying for, deploying the solutions and having someone to manage the environments for them.

• Pre-Sales still reflects the traditional 10% to 100% sales cycle. Resellers and Services Partners play a critical role here, together in P2P motions, or even evolving to become the Sales & Services Provider as one single entity.
• Post-Sales activities are actually the ones fully connected with Services capabilities a Partner bring to the table, from deployment of the technology and delivering the proposed business solution, to managing the Cloud environment for scalability, security, elasticity and business continuity.

The combination of those 2 is what Microsoft now calls "Microsoft Customer Engagement Methodology", representing 5 major steps: Listen & Consult, Inspire & Design, Empower & Achieve, Realize Value, Manage & Optimize. Partners are integral part of this, in every stage!

Hunters & Farmers Behaviors

I frequently use this comparison, which explains pretty well the type of Partners we have today and how they play a critical role in our ecosystem. These Partners can work alone, what I don't recommend, or in partnership with others to fulfil a specific gap in what they can offer.

• Hunters have focus on having strong sales and pre-sales team, who can deliver workshops, demo environments, and always focused on acquiring new Customers via packaged offers, plug and play industry solutions.
• Farmers are those with focus on having a tech team with architects, driving implementation of Cloud solutions, good on understanding how each Customer is unique on its business, connecting with the overall Digital Transformation journey of their Customers, experts of managing IT environments and always looking for areas of optimization.

When Hunters and Farmers come together, it is an amazing combination of two different behaviors, having the right people and the right focus, bringing together the power of Pre-Sales and Post-Sales. Also, these two Partners together, are able to maximize return on investments, with Hunters managing and optimizing licensing while Farmers are making sure Customers are using what they are paying for.

And in case you are curious... yes, it is possible to be a Hunter and a Farmer at the same time, you just need to make sure both sides, sales and tech, are strong enough and working in sync internally.

Incentives & Margins Profitability

Last, but not least, the profitability part is also changing, and this is where I still see most of the Partners not looking into the new model, struggling to make the change and risking themselves on getting behind competition.

The days of selling Software and making good money out of it, are gone, the same way people don't sell much cameras today and photo films at all anymore, since smartphones can take amazing pictures, fit into your pocket and carry millions of photos with a good Cloud backup. Now Cloud is what you pay for, the new end-user hardware is just the accessory you need to get the image you want and host it in the Cloud, the same way Software became a commodity but a tool for different meanings.

• Incentives today, are used to cover operational costs, including investments in automation and tier 1 support. They are not how Partners make the big bulk of money anymore. I frequently recommend Partners to use that to revert 100% back into the automation and tools they need to Manage and Secure the Cloud, or even invest on skilling their pre-sales and tech team.
• Margins today come from Intellectual Properties, usually divided in two forms:

1. The most attractive one is creating your own Cloud Solution, like an ISV, with SaaS offers. This model needs a good team of developers and constant upgrades in your solution!
2. The other model is having a strong tech team of architects, infrastructure experts and analysts. Managed Services, for long term and frequent management of the customer's environment, gives good profitability in a recurrent model (my favorite!). Professional Services, for short term deployment and implementation, is a good way to acquire new Customers in a defined scope and cost for their project.

________________________________________________________________

At the end of the day, Partners who can influence Customer's decision will become more critical for Digital Transformation's sales cycle. Influencers are Partners with strong value proposition, Services Practices, and Industry expertise, regardless of their ability for transacting the deal (cloud/software).

Are you ready for this change? Have you went through it already? What do you offer as Services Provider?

PS: This article is not an official Microsoft post.