Growth plan
As Microsoft Dynamics has continued to ring in changes to its channel programmes, Karim Talhouk, MBS lead, Gulf, wants channel partners to follow his blueprint for growth in the Gulf region.
Published Sunday, 22 July 2012
By Manda Banda
Microsoft Dynamics has continued to cement its channel programmes and operations in the Gulf region. Over the last three years, the business applications division of Microsoft has sharpened its channel focus, enhanced its business applications portfolio and revamped its partner programmes all in an effort to grow its business in the Gulf.
Karim Talhouk, MBS lead Microsoft Dynamics in the Gulf region (excluding Saudi Arabia), wants channel partners in the region to follow his plan, one in which the channel is the centre of all MBS products, services and cloud offerings.
Although Talhouk can’t predict the future, what he does know is that resellers, VARs, system integration and solution provider partners are key to Microsoft Dynamics’ success going forward.
The Microsoft Dynamics of 2012 is no longer just about developing ERP and CRM solutions, and supplying these applications using a generalist horizontal approach to market, but it’s about industry focus, domain expertise, certifications and specialisations, he says.
Getting this strategy right is not easy but Talhouk knows that the company’s next big gambit will be getting its partners in the region to fully embrace these initiatives and vertical industry focus if it is to continue making inroads in the SMB and enterprise segment of the market.
“Our strategy in the Gulf region is to work with all our channel partners and help them to focus on industries rather than have a generalist approach to market. This is something that our end-user clients are already appreciating, as there is no longer a holistic approach, where partners are offering everything,” he said.
He said the business and industry vertical focus is something that Microsoft Dynamics is taking very seriously and the company has indentified five main industries namely retail, manufacturing, wholesale and distribution, professional services and public sector, where it would like solution providers, VARs and system integrators to specialise in and develop domain expertise.
New strategy
Using his sales operations know-how and management muscle, Talhouk has charted a new course in the hope of providing that better experience for Microsoft Dynamics partners in the Gulf region. “The industry focus comes with the launch of our new product Microsoft Dynamics AX 2012 that was unveiled in 2011. Microsoft has for a long time been known as a major player in the SMB market. Today, we have more than 2,000 customers in the Gulf region excluding the KSA market and it’s a big number and growing,” he said.
Talhouk said in the past two years with AX 2012 and Microsoft Dynamics CRM offerings, the company has been aggressively playing in the enterprise sector. In fact, he attributes the positive response from the market to the focus Microsoft Dynamics has entrenched on verticals as this strategy is yielding dividends for the company and channel partners. “Today, with AX 2012, we are competing in every deal in the Gulf with our rivals mainly SAP and Oracle. With Microsoft Dynamics CRM, I wouldn’t say we are competing, but rather winning each and every deal that our partners bid. It is a strong offering backed by a solid partner ecosystem that supports the product. The challenge with CRM products in the past has been that it’s not easy to use and benefit from it,” he said.
Talhouk emphasised that AX 2012 is not just the next release of a product, it is in fact, a generational shift in business software, delivering new levels of capability, unmatched agility, and a compelling and empowering user experience. “AX 2012 sets a new standard for simplicity in the ERP space,” he noted.
He pointed out that most ERP systems have never moved beyond managing the administrative dimension of the business, tracking general ledger, payroll and HR, while the real operation of the business is managed elsewhere.
Talhouk said AX 2012 is different as it covers both the administrative and operational requirements. “By delivering this capability, AX 2012 gives businesses more value faster and establishes a strong platform for ISVs to more efficiently deliver the specialised vertical functionality unique to verticals within those industries that we target. The stronger base functionality and a broad portfolio of specialised vertical solutions means a better fit for the needs of business, more value and more rapid time to value,” he said.
Talhouk said the managed channel partners’ revenues in the Gulf region grew by double digits in 2011 versus the previous year, which is a solid performance in a market that was growing by a single digit according to IDC. “This year we are planning to avail more than 6,000 man-hours of training to support our channel partners with their growth and specialisations plans,” he said. This, added Talhouk, is on top of the online trainings that are delivered through the partner portal, a multimillion dollar investment and that keeps on increasing the number of courses that are available for partners.
He said the whole investment and innovation that the company has brought from a Microsoft Dynamics perspective in terms of products, is to make sure that they are the easiest solutions to be adopted by the business users and can run in a public cloud, private cloud or on-premise. “We are the only vendor in the market at the moment that offers all three options with the Microsoft Dynamics CRM offering,” he said.
Channel structure
With the channel changes now in place, Microsoft Dynamics has no secret about its intentions to aggressively train, certify and get partners to specialise in key industries in the Gulf region.
Talhouk explained that because the majority of Microsoft Dynamics channel partners had been Microsoft resellers way before the company ventured into the ERP and business applications space, it was easier for them to make the transition into the business software segment. “Some of the partners were already selling Great Plains and already entrenched in the business apps market even before Microsoft acquired Navision Software. When we acquired Great Plains after the Navision merger, we developed programmes to forcefully recruit partners. This was vital as we wanted to continue the legacy of working through channel partners even with our business apps solutions,” he said.
However, Talhouk said the company quickly realised that most of the partners were addressing the same business needs and had a horizontal approach to delivering solutions. He added that this prompted the need to change the channel strategy. “We realised that we had enough partners on the ground in the region, especially the Gulf, although there is still room to recruit more in Levant, Pakistan and the African continent. In the Gulf, we changed the incentive plan for partners in a way that we advocated more the vertical approach to engaging with them,” he said.
Talhouk explained that this is how the company has started to differentiate partners by creating multiple tiers and adding more competencies and exams to ensure they are up to the level and have the industry knowledge needed to compete and grow their businesses. “As an example, in the past, there was no competency requirement all that was needed was for partners to pass exams then they became a certified partner. Under the new changes, partners can now be certified as Gold ERP or Gold CRM partner in financial services or the manufacturing sector,” he said.
He added that: “We added these layers in order to differentiate our partners and to make sure that they add more value and relevance to the customers that we target in the Gulf region. I am glad to say the customers in the region have liked these changes as it has made it easier for them to narrow the search of solution providers they would like to work with on a given product offering and in a specific vertical market.”
Talhouk said with all these changes, it’s now more demanding for a partner to gain certifications and specialise. “By this, I don’t want to come across as though to say it’s difficult, but we have added a lot of check points to ensure that partners will competently deliver a successful implementation to a customer’s satisfaction. And, because the partner plays a pivotal role in all this, we want to make sure that through the certifications they attain, they will be able to be profitable in their business,” he said.
Aside from the stringent certification and specialisation criteria, Microsoft Dynamics says it has put in place more incentives for partners who will deliver the required growth, limiting in the process, small ‘opportunistic’ partners who are not investing in the partnership with it.
Talhouk reiterated that partners will need to focus on their core competencies and continue their investments in marketing, pre-sales, sales, and delivery skills. On the ERP front, we are segmenting the market into either SMB or enterprise offerings. The first is focused on customer acquisition and repetitive delivery for similar customer requirements, and the latter is focused on enterprise customers with sophisticated industry vertical requirements.
Gulf focus
At the heart of the new regional focus and growth plan is Talhouk’s belief that the channel should take centre stage in driving Microsoft Dynamics’ business growth in the Gulf. “My view about the channel and our growth strategy is very simple as we conduct our business 100% through partners. Our channel is very important because we do everything through them,” he said.
For example, said Talhouk, in marketing, Microsoft Dynamics delivers most of its events in cooperation with channel partners. “We work closely with our partners who are mapped to our focused industries and we support them to deliver state of the art solutions to our customers,” he said.
He explained that the UAE has been the centre of the whole Gulf and Middle East regional operations. “Our structure by having Microsoft Gulf based in Dubai has helped us to reach out to all countries in the region. Although for the past two years the UAE hasn’t been the fastest growing market, it continues to be a vital region for us because it is the technology hub for the Middle East,” he remarked. That said, Talhouk pointed out that business has been growing quite fast overall in the Gulf and, Qatar is a ‘big’ market focus for Microsoft Dynamics in 2012 and beyond. “Kuwait and Bahrain are doing equally well, while Oman is progressing okay although the business there is slower as sales cycles are longer than anywhere else in the Gulf region,” he said. “We still have to develop the Levant region, Pakistan and Africa markets, as there is huge potential for our offerings in these largely unexploited geographies.”
Cloud journey
With cloud computing garnering speed in the Middle East, Microsoft Dynamics is aware that the cloud is a fundamental shift in culture, as it is a shift in the delivery and approach to IT. “It is a shift in mindset led by a strong desire for all of us to have access to the information we want when we need it most, anytime and anywhere. Our customers are pressuring Microsoft and our partner ecosystem to transform the way we bring value, and the speed we are availing it,” said Talhouk.
He pointed out that Microsoft Dynamics partners that want to increase profits need to develop a better business model that will be sustainable in the long-term. “Through the channel changes that we have made over the last two years, we have put together an extensive profitability guide that directs our partners towards the cloud journey. This guide is helping channel partners to understand the key success factors for their transition to the cloud, in particular, when they are selling or delivering business application services and solutions,” he said.
Talhouk acknowledged that every partner’s journey will be unique but Microsoft Dynamics’ goal is to provide some of the most relevant tools to develop a solid business plan. “We are very excited about Dynamics AX 2012 with a new and modern architecture, and more than 1,000 new features specially designed for the large enterprises,” he enthused. “We believe that Dynamics AX 2012 will be more relevant to the Middle East enterprise segment, and the group of companies who are geographically dispersed. We have enhanced the industry capabilities to deeply cover all the five vertical focus segments. We are equally excited by the Windows Azure-based cloud services.”
As for the channel makeover and growth strategy for the Gulf, Talhouk said he is aware of the positive impact the changes that have been implemented over the last two years is having on the company’s overall performance, partner businesses and customers. “I would like to see our partners continuing on the path that we have taken because their unwavering support is what has made us to be a force to be reckoned with in the Middle East business applications segment,” he concluded.