From signing up and advising our first clients, to setting up interesting partnerships, it has already been an great time. This is the type of energy you want to have during these otherwise troubling times.
Writing this now, while enjoying some time off, I was reflecting on the past period, and why I started doing what I am doing now. This started when I got hit by a sense of wanting more, of being able to do more. I felt stuck in my role at Microsoft, I wanted to venture out and have a bigger impact, but not knowing how to get there. Microsoft is a very generous company and a great employer, but I was feeling stuck. I dreaded doing the same thing day in and day out, the same repitition for years. At the same time I was hesitant of leaving my comfortable life, thanks to a great employer (with great benefits). But then someone close to me told me I should take a chance on myself. This feeling would not pass unless you take action. So I did. And here we are.
In my first months I have talked to an amazing amount of people tbrough the network of Erik and myself. Our conversations started with us discussing the world of Microsoft, and why we wanted to leave and venture out. Often, they would ask further insights into Microsoft, and what some of the top tips and tricks are that I could share as a former Microsoft negotiator. Now, in my reflection, I think I should share some of this with the world. So below, I will share my view of the current mindset of Microsoft, and the transformation that Microsoft as a company went through. This is very important to understand, as you can leverage this to your benefit towards the future.
Past to present to future:
We all know the Microsoft from back in the day. Microsoft’s mission was to put a computer in every home, and started creating revolutionary software to support this vision. Everyone has seen its fair share of Windows and Office versions (good and bad), and this was a trend that Microsoft was continuing. They were, however, quite a closed company. Focus was on shipping boxes of their software, not focusing (that much) on the ecosystem around it. Additional revenue was made from auditing customers to bring in more revenue from settlements, instead of actually helping them deploy the technology correctly. But this was about to change rapidly a few years after I joined Microsoft.
With the change in senior leadership, through Steve Ballmer and Kevin Turner leaving and Satya Nadella taking over, a change in mindset happened. Microsoft became more transparent, more open to different perspectives, more of a team player, and quite ready to form new partnerships with other companies to bring their dream of becoming a giant cloud services provider to fruition (remember Oracle licenses in Azure, anyone?). This was a very key turning point for Microsoft, and it was quite impressive to watch this change from within the company.
As a side effect to this change, the sales teams were in need of an overhaul as well. This was quite difficult to bring to life within the sales (and sales management) of Microsoft. The people selling the products had a large disconnect with the new vision that Microsoft had for the world, and this led to some funny moments, where you are trying to sell a cloud service like it is a piece of software. Many struggled, lost interest, and left. This was not leading to the desired results of the senior leadership, so something had to change…
The future vision of Microsoft, one that is taking form over the past years, is focusing more and more on partnerships. Every customer, every partner, every vendor that works with Microsoft are being asked the same question: how can Microsoft make the difference within your organization? Sales teams are being actively and contiously trained on one thing only: finding that Digital Transformation journey of the organizations they work with, and try to insert the Microsoft technology stack into this. Are the sales teams there yet? I don’t think so, but there is a push from high up in the company to work this angle, and leadership in the areas within Microsoft are being trained and coached to adopt this mindset. With them, the sales teams need to adjust, or they need to make room for people willing to take on this new challenge.
How does this work in practice?
Microsoft started implementing this around 2 to 3 years ago, when it had undergone a large transformation in their sales division (this is when Microsoft started with Inside Sales offices as well). The idea was to go “fewer deeper”, meaning less customers in the enterprise and corporate segment, and a larger salesforce to service these customers. As said before, sales managers were extensively trained to challenge their teams on where they would actually be able to make the difference in the customers' core business. What are digital transformation topics that are top of mind for these customers, and where will you put your focus? This was quickly translated by higher management into this: “how can we do larger Azure/Dynamics/Modern Workplace deals?”
At the same time, Software Asset Management teams were trained to move from their old methods (counting licenses) towards value added offerings. This brought to live Cybersecurity Assessments, Server Optimizations and many other offerings. Offerings the partner ecosystem was not ready for at all, though they were forced to move with Microsoft in doing such assessments. Lately, SAM Engagement managers in the area of Microsoft that I was working in (Western Europe), were all moved to other positions (or fired), meaning Microsoft has next to no ability to do SAM Engagements or audits in these countries. Talk about a change in mentality!
Again, a lot of training was happening to the sales teams of Microsoft. Mainly around value added services. How to sell ideas and values, understanding your customers' business better, and become leading industry experts within your given industry to have the right kind of discussions with your customers. All this was done with one single thought in mind: selling should move away from confrontational negotiations and discussions on price x quantity, and towards the value of the platform. However, what became apparent quite quickly, was that Microsoft’s customers were not interested to play this game with Microsoft. Of course there are some success stories, where a customer actually saw the value of the Azure platform for their entire business, or identified Dynamics 365 for Field Service as the next logical step to differentiate their business from the competition. Microsoft, however, thinks this approach helps in the negotiation. It does not. It is a one sided game, and as a customer, rightfully so, you should still try to leverage the vendor/customer relation, and not go along with the full strategic partnership discussion. You should, however, try to leverage this to your benefit!
The simple fact is, once every three years, Microsoft is going to come knocking on your door to renew your Enterprise Agreement. With this new mindset, they hope that a strategic partnership will lead to an easy Enterprise Agreement renewal, because they have sold the value in such a way, that pricing is no longer an issue. But the sales teams of Microsoft, though trying their best, fails more often than not to sell this value. This means, that in the end, it all still boils down to one thing: price. Strategic partnership is a nice word that is being thrown around, but it does not lead to the desired results as of yet. As a former Microsoft Commercial Executive, leading many negotiations for Microsoft, it too often happened that the end result was focused on discounts, and not of the value of the contract.
Now, I am not saying that the approach is not correct, because I do believe if you sell the value, the pricing becomes less important. But you need to be able to show what the customer is saving/gaining/optimizing in order for the value to be more important than the price. If you fail to show that, as the sales teams often do, it becomes easy to fall into old habits.
What does this mean for you?
Now, this has become a long story, probably too long, but here is the gist of it. Use the Microsoft approach to your advantage, there is a lot of things you can leverage in the approach of Microsoft. Here are my thoughts:
- Investigating the possibilities of a strategic partnership opens a lot of doors within Microsoft. Many high level execs will become available, as they have a great interest in talking to you and having these Digital Transformation discussions. Use this to your advantage at all times!
- The value is there, you just need to discover this together with Microsoft. They will be able to position resources to work with you, often free of charge. For instance, if you are interested in moving your datacenters to the Azure cloud, Microsoft will have resources that can work with you on doing an inventory. Use this with caution though, and be aware of what you are sharing with them. Even if it is a different part of Microsoft, the data might get into the hands of the sales teams.
- What Microsoft often fails to remember, and what you should use to your benefit, is that you are strategic partners in good times and in bad times. Meaning, if you are faced with a crisis (like the one we are in currently) you should be able to reach out for help. Microsoft is not often transparent on the options that are available, so just request (and keep requesting) what is top of mind for you. See if you can escalate answers that are not to your liking as well. Again, sales teams are there for a reason: making their mark/target.
- Enterprise Agreement Renewals are positioned as “something ugly we have to do”. Whereas for you, this might be one of your larger IT contracts and biggest IT spend. In any discussion, be sure to include all the challenges you see with your current EA, and leverage all people available to you to get the optimal result.
- Strategic partnership, in the eyes of Microsoft, often is translated into commitment. Yes, they will help you conquer the world, but first you should sign up to a new contract with everything and anything included, and then they will make this happen. This final point is the most crucial, and I hope you stuck around to read it.
As you can see, Microsoft is trying to show the world what an open and generous company it is. Don’t get me wrong, I agree with a lot of it, but you also should be cautious not to drink too much of their koolaid. Getting into a strategic partnership with Microsoft should help your company grow, but not at all cost.
LicenseQ is here for a reason. We are here to help your organization make the right decisions when it comes to Microsoft. In discussions with Microsoft around a strategic partnership? Great! Want to know how you can leverage these discussions in your favor? Please reach out to me directly (firstname.lastname@example.org). We are here to support you in anything Microsoft related.