Microsoft’s message

Microsoft pulled out all the stops for its recent Gulf channel summit held in Dubai. Orlando Ayala, senior VP, small and midmarket solution partners at Microsoft, jetted in to address the hundreds of members of the vendor’s partner community that showed up.

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By  Stuart Wilson Published  February 21, 2006

Microsoft pulled out all the stops for its recent Gulf channel summit held in Dubai. Orlando Ayala, senior VP, small and midmarket solution partners at Microsoft jetted in to address the hundreds of members of the vendor’s partner community that showed up.

Microsoft is ramping up its channel engagement in the region as it looks to partners to develop new skill sets and open up new business opportunities, and the recent summit provided the perfect opportunity for a spot of tub-thumping.

“The Microsoft partner programme is a real journey,” said Ayala. “We are two years into a programme that centres on partner specialisation. In every country we are making an assessment of the opportunity that exists against the skills in place. We don’t want too many skills in one area because that can create too much competition, and at the same time we don’t want gaps in other areas.”

According to Ayala, Microsoft measures the success of its channel programmes on the number of renewals to the scheme it receives. On that basis, the Middle East is performing well. While Microsoft has undoubtedly made progress with the rollout of its channel programme there is still some way to go. This means making sure that partners are focused on building up the competencies that Microsoft believes it needs to develop in the region and linking this into its efforts to increase channel breadth.

“I do think we need more channel breadth in the region,” continued Ayala. “I think there will be more customer scenarios that we want to have more partners skilled up for. That does not necessarily mean more partners, but it means partners with more than one competency.”

While Microsoft is clear about its desire to improve the skills base that exists in the VAR, integrator and reseller community, it is also committed to dealing with issues affecting its distribution set-up in the Middle East. Zaid Abunuwar, solutions and partners group director at Microsoft Gulf identifies three principles driving the vendor’s distribution strategy in the region.

“It is all about local in-country distribution presence so that small resellers can purchase in their local market,” he said. “It is also about a healthy level of competition and finally it is about partner profitability. We need to get all three principles in place.”

During the partner summit, Ayala met with major regional distributors to discuss some of the pertinent issues they faced. “I think it is too early to say we are over distributed,” said Ayala. “The priority is to make sure that we readjust. Maybe we need a more tuned distribution set up with fewer distributors but it is too early to say we will take that step.”

“Some distributors want more rebates,” he added. “Some say less rebates and more training and access to skilled Microsoft staff. The whole tone of the conversation was not all about over distribution. There are other important factors such as how we can help them reduce their cost of sales. The dialogue with the distributors was very healthy.”

While Microsoft admits that there are still issues in the distributor engagement model, senior management believe it is important to look at the situation from a number of perspectives. Speaking recently, Ali Faramawy, VP Microsoft Middle East and Africa, commented: “I acknowledge that in some parts of our business that issue about pricing and debate about margins and so on is an issue. At the same time there are three or four other things [so] that if we look objectively at the subject then we get different views.”

Despite the continued presence of channel engagement issues the vital point to remember is that Microsoft remains committed to an indirect sales model in the Middle East. “We don’t sell direct and have no plans to sell direct,” concluded Ayala. “We are not IBM, SAP or Oracle — they have their own sales forces. All of our revenue goes through partners.”

As the Middle East channel matures, Microsoft is not alone in its efforts to drive up levels of channel education. Resellers of all shapes and sizes need to move on from selling product-based point solutions towards the meatier margins of solution sales and services delivery. Participating in the channel programmes operated by major vendors is one way to achieve this goal.

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