Managed IT Service Providers React To Microsoft Partner Program Changes

Microsoft will be resetting its partner program (Microsoft Partner Network) and changing it significantly. Beginning in October 2022, Microsoft will have six solution areas that partners can specialize in, and the partner program will be renamed the Microsoft Cloud Partner Program, Microsoft channel chief and head of channel sales, Rodney Clark, revealed on March 16. "This change better reflects the enormous and ongoing transition of business operations to the cloud, and how Microsoft intends to support partners in the future," said Clark.

"Microsoft is shaking up all areas of their cloud offerings both on the customer side as well as for their partners. Products, pricing, and partner requirements are all experiencing a forceful evolution. As a partner, if you choose to remain on board, you must help paddle. This seems to be the general message. Microsoft's partner programs have changed little over the years and a shakeup might be a good thing", said Joe Cannata, owner of Techsperts, LLC in New Jersey.

Expansion Is a Surefire Way for Companies To Increase Their Growth Opportunities

"I think it has the chance to motivate partners to expand their knowledge and thought processes when recommending Microsoft products to their clients. My confidence remains strong in Microsoft products and their pipeline. I, as a partner, will do what needs to be done to remain current and valuable", added Cannata.

The new program will go into effect on October 3, 2022, but Microsoft will give partners 1 additional year to sign up for the program. September 30th, 2022, will be the last day for a partner to renew their existing membership in the previous Microsoft Partner Network.

"Although the announcements seem to be for a quick turnaround, there are 18 months for partners to convert over. The focus of Microsoft to go and push its partners to the cloud is not surprising, so they are changing the partner program to push partners to do this. As an MSP and Microsoft partner for over 20 years, this is not the first change that we go through with them", said Ilan Sredni, CEO and President of Palindrome Consulting, Inc. in Florida.

Sredni continued, "I welcome the change as we have been an organization that has focused on evolving with the times and has focused on continuous training of our staff. We have always managed to stay on the leading edge of technology to assess the tools and properly consult with our clients in order to give them the right solutions that they need and use. From the end-user perspective, I would wish that they would pay more attention to the different levels of markers of partnership or expertise. Hopefully, this change will make it clear for anyone assessing an MSP to determine who is a better fit for them."

Driving Microsoft's Cloud Value

Microsoft is opening up a channel for more resellers, systems integrators, and providers of services to have access to different tools. Microsoft's new program will be mainly focused on several different areas: Azure data and AI, Azure infrastructure, Azure digital and app innovation, business applications, modern work, and security.

"The recent changes to the Microsoft Partner Network, now known as the Microsoft Cloud Partner Program, provide a much-needed change to Microsoft's longstanding partner program. As Microsoft continues to invest its resources in their growing Azure cloud offerings, they are updating their partner program to reflect their cloud-first approach looking into the future", said Kenny Riley, Technical Director at Velocity IT in Texas.

"The current Microsoft Partner program primarily focuses on the sales of Microsoft 365 services at the Silver level, with an added exam requirement to reach the Gold partner level. The new Microsoft Cloud Partner Program will introduce three levels of competence designated by Microsoft to their partners who demonstrate expertise in the various Azure offerings to solidify their authority in the marketplace as Microsoft experts", Riley added.

"As the industry continues to shift operations to the Cloud, Microsoft Partners and IT professionals, in general, need to be knowledgeable in the various Azure offerings and how to deploy them properly and securely in their environments. We plan to adjust to these new requirements by Microsoft to maintain our partner status. We will ensure we meet the competency requirements by continuing to ensure that both our leadership and technicians are knowledgeable in Microsoft's latest product offerings and their growing Azure platform", said Riley.

Ashu Bhoot, CEO of Orion Networks in Virginia, believes this partnership change has been in the works for a while. Said Bhoot, "This has been in a long making as part of Microsoft's strategic initiative to convert all of its businesses and segments to be cloud-first. There was a reason Microsoft had discontinued its MCSA and MCSE certification programs that have been a hallmark of the industry since its nascent stages."

"They replaced it entirely with Azure-centric certification modules, converted their Office Suite entirely to be more cloud-native, and they are now converting their partnership business to align to it. Also, this will give a lot tougher competition to AWS where the partnership network exists but is not as strong as Microsoft has built it with its incentives and much deeper engagements built over decades. It will help Microsoft capture the cloud battle much faster, especially if Microsoft is able to manage this transition without putting off its strong partner network", Bhoot added.

What Does the Change Mean for Partners?

"There are MSPs that push to be Gold and Silver Partners and there are others that just get registered, which work for both types. This effort will still reward those Gold partners for pushing what they already have in the Azure Cloud Services and other Microsoft product suites. I do not see a young MSP or an established one that does not have the Gold Partner status today being able to get ahead any differently with a new system that still relies on the same type of work being done", said Robert Giannini, the Chief Security Officer, and CEO of GiaSpace in Florida.

Investment in growth requires metrics to measure how well a company is growing. One way to measure growth is with an objective metric. Microsoft released a set of two rankings, one of which is based on the "capability score" that partners earn.

"The new Microsoft rating system is defined by "The partner capability score evaluates a partner based on their certifications, added customers, successful deployments and overall growth," which are activities already being performed by the Microsoft Gold Partners. The new program starts in October 2022 and most likely will be tweaked along the way. The current program has been in effect for the past 15 years, and each company that has achieved a certain partner-level has done so by following the same core principles for the rating system", said Giannini.

Anthony Buonaspina, BSEE, BSCS, CPACC, CEO and Founder of LI Tech Advisors in New York, agrees with Microsoft's decision to require partners to achieve a level of competency. Said Buonaspina, "Each partner will need to achieve a certain level of competency in order to qualify for these new designations. I totally agree with Microsoft's decision, since this will allow their partners to become more experienced and knowledgeable with their premier products, which in turn will help minimize Microsoft's need to continue to field low-level issues and allow their technical support team to focus on the larger issues at hand as well as improve their product offerings."

Buonaspina believes this would create a separation in the industry. Buonaspina added, "In one way, this will separate the "men from the boys" in regard to the over 400,000 existing partners that Microsoft currently has relationships with. Partners will need to shape up in order to meet these new requirements. Microsoft may have "raised the bar" on what partners need to achieve, but at the same time, they are making a significant investment to allow partners to gain advanced specialization and deep technical training across these solution areas and business applications."

When asked how this change by Microsoft would affect his firm, he said, "How this affects my firm, LI Tech Advisors, is that we will need to continue to grow with the Microsoft Partnership by having my staff enhance their training and certifications with Microsoft, especially in the areas of Microsoft's cloud environment. We have previously made a major commitment to Microsoft by "leaning into Microsoft" by committing to internally utilizing all of Microsoft's products within our own company. "You can't sell something that you don't utilize and embrace yourself." Each of my staff can first-hand explain to a client the benefits of each of the Microsoft products and how that product has helped our own company maximize efficiency and save money. "

David Carreiro, Owner and Chief Executive Officer of CEU Technologies in Chicago, also shared how this recent change will impact his business. "CEU Technologies is a big advocate for where Microsoft is going with Azure and cloud products. We believe that Microsoft sometimes forgets that Partners is what helps onboard clients and maintain these products", said Carreiro.

Moving Forward With the New Partner Program

There are many managed IT providers that are dependent on Microsoft and its solutions. What do managed IT providers expect to experience in the future after the change takes effect?

"Like many managed IT providers, GenIX is dependent on the Microsoft ecosystem. Microsoft continues to evolve its partner program and will be rolling out a new Microsoft Cloud Partner Program. These new changes will only benefit our organization because we already specialize in Azure and SharePoint. As an MSP, we will be able to differentiate ourselves from the competition by leaning into the opportunity. Our engineers will continue to train on the Microsoft ecosystem so that we can deliver best-in-class solutions to our clients", said Holden Watne, Director of Business Development at Generation IX in Los Angeles.

While there are many managed IT providers that are looking forward to the change, there are others who believe only time will tell what these changes will mean for the industry.

"When Microsoft Office 365 was released, Microsoft did try to cut the "middle man" out of the equation and not focus on their partners. Before cloud services, Microsoft partners were a significant revenue stream of physical Microsoft products like Office and Windows OS products. When products first became cloud-based, they tried to promote these products and expected end-users to jump on with little to no help. Microsoft soon found out that without a good partner migrating the data and showing end-users how to utilize the cloud products, they were losing a lot of potential new revenue. Microsoft, since then, has regrouped and refocused on Microsoft Partners. However, given the impact of Microsoft NCE and all these changes to the partnership, I hope that Microsoft doesn't lose sight of what a true partnership means. Only time will tell", said Carreiro.

"Time will only tell on how this program helps those not selling Microsoft Security and Business application sets already or those looking to diversify existing cloud service offerings. Most MSPs do not have the staff to take on more Vendor requirements to obtain additional business. If a potential client calls today for information on Microsoft Dynamics, a typical MSP is not going to have the programming experience to make the customizations needed. This is where the software development space fills that void. I am not against a new Microsoft program, and I applaud their efforts, but human nature will show this will benefit the same type of group that achieves these levels already. To conclude, no successful MSP should want to be a "jack of all trades," and specialization is what sets us apart from the herd," said Giannini.