Microsoft's Selective Partner Resale Strategy For Surface: Short-term Benefits, Longer-term Challenges

Microsoft (MSFT) recently announced plans to sell Surface tablets to enterprise customers, including educational institutions, through a two-tier partner program called Microsoft Devices Program (MDP). The program authorizes distributors to sell Surface to a newly designated group of device-authorized large account resellers (LARs). Per the announcement, in the US, Surface will be resold through three authorized distributors (Ingram Micro Inc., SYNNEX Corporation, and Tech Data Corporation) and 10 high volume LARs. MDP is likely to be expanded to select partners in 28 other countries by the end of September 2013. As part of the initial go-to-market model, Microsoft is not including its solution providers in the program.  

Based on recent media reports, Microsoft’s US partners -- solution providers in particular -- have expressed dissatisfaction with Microsoft’s selective approach towards partnering for Surface. Solution providers feel Microsoft is ignoring the opportunity to deliver “wrap-around services” around Surface, which they could have delivered.

I believe that in the near term, Microsoft is correct in limiting access; but, in the longer term, it will need to open up to other partners, including solution providers that can help Microsoft deliver Surface-based solutions as a means to ensure differentiation in the tablet market and drive margins. Microsoft needs to follow some key guidelines as part of Surface’s go-to-market strategy if it wants to stand above the crowd:

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Are You Doing Enough Customer Research? Yes, But . . .

Peter O'Neill here: I attended a meeting of our FLB Sales Enablement Council earlier this month in San Francisco. The Council meeting included sales operations and content marketing executives from B2B companies Avaya, Cisco Systems, Haworth, HP, IBM, and Polycom. While the meeting is a facilitated discussion among peers, as per our standard FLB model, it is also more than that. It actively helps us analysts create new IP for our clients — we get their point of view and we test our own hypothesis before publishing reports. This meeting focused on the very important topic of defining the audience for our message (i.e., content and conversations) and messenger (i.e., the content channels, including sales). In an introductory exercise, the attendees listed all the groups and initiatives that they know are doing research with their customers. If you look at this photo, I think you’ll agree with what the Council attendees said after this exercise: “It’s absolutely frightening and quite chaotic!”  This photo shows the list of people or departments - the list next to it is by "initiative" and it is just as long.

I am reporting this because Forrester has just published my latest report for B2B marketers on content marketing, Establish Your Content Marketing Life Cycle; in it, I discuss some critical success factors around content marketing. One of the most important is doing enough of the right research about your buyers in the first place. However, the research I describe in the report isn’t even on these lists!

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Why Growing the Sales Force May Not Be Your Best Investment Strategy for Revenue Growth

In a recent post, I introduced on a common scenario that sales leaders encounter whereby the CEO asks the chief sales officer to substantially add salespeople to the sales force to grow the bottom line. We see this strategy repeated over and over again and, unfortunately, it very frequently leads to deeply disappointing results for the CEO, investors, the board of directors, and the sales leader. Growing the sales force to grow the bottom line seems to make common sense, right?  Well not exactly. Here’s why.

 

What is the desired impact of adding salespeople?

First, let’s look at what impact the stakeholders envision with the “add salespeople” strategy.   Driving increased revenue and bottom line growth is anticipated from more salespeople acquiring more new customers.  These representatives may be deployed in new geography to broaden the company’s footprint, or they may be added within the existing footprint where, with more salespeople, the company can reduce the number of accounts per salesperson with the expectation that those reps will invest more time with each buying customer to sell more offerings (cross-selling) per company.  

 

Why doesn't adding salespeople produce increased revenue and bottom line growth?

There are really three factors for why significantly increasing the number of salespeople often doesn't result in expected financial growth.  These are:

  • Unrealistic timelines associated with the expected results 
  • Unanticipated expenses with adding and supporting salespeople 
  • Unanticipated risks
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Cisco Sets A Positive Course For Partners - Notes From Boston

I attended my fifth Cisco Worldwide Partner Summit in Boston the first week of June. As always, the first day’s keynote presentation by John Chambers was impressive and covered market transitions, opportunities, future big bets, and how Cisco can work better with its partners. John also stressed the need for partners to embrace change and move to a new business model.

Building on this presentation, Cisco made three key announcements at its partner summit, which I’m highlighting below because I believe they are especially important for partners that operate in Asia Pacific (AP) markets:   

  • Cisco has committed to doubling its investment in the mid-market space globally from US$75 million to US$150 million in FY2014: Typically perceived as a large enterprise-focused company by partners and mid-sized businesses alike, Cisco’s announcement that it would double its investment in demand generation activities, building its mid-market portfolio through new products (e.g., the  low-cost router developed in India) and through acquisitions (e.g., Meraki), and  incentivizing sales people is very timely.  With a large mid-sized business population in Asia Pacific, proactive efforts toward creating a mid-market brand will help establish Cisco more firmly in the space.
  • Cisco dCloud, a cloud-based demonstration service for partners, is now available:  One of the major challenges for AP-based partners is their inability to invest in costly demo equipment or visit vendor demo solution centers. The availability of Cisco dCloud will not only help partners increase their chances of winning a deal, but also potentially help them reduce the sales cycle, making it a profitable deal.
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