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Exit Interview: A Q&A with outgoing U.S. Partner VP Margo Day.

This month, Margo Day and Robert Deshaies swap responsibilities. Day, who has run the U.S. Partner Group for five years, will become a regional vice president for the Small and Midmarket Soluti ons & Partners (SMS&P) organization in the United States. Stepping into Day's job is Deshaies, who has been a regional vice president for SMS&P. Both will continue to report to the same boss.

Redmond Channel Partner spoke with Day, who will now assume a more customer-facing role, about her long run as the public face of the U.S. channel and her view of the future for partners.

[Note: Questions marked with an asterisk were not included in the print version of this Q&A. The double asterisk indicates a longer response than the answer printed in the magazine.]

Could you describe what your main duties were as the VP in charge of the U.S. Partner Group? *
My job was, and is...yeah, I'm not gone yet. My job is two-fold. One is to set the overall U.S. partner strategy. The second is then to execute both the Microsoft partner program in the U.S. market, augment as necessary, and then manage our largest reselling partners and ISVs at the same time.

I think a lot of people might have been surprised to learn that you reported directly to sales rather than to Allison Watson. Is there a U.S. counterpart within Allison Watson's group, or a dotted line to your position? *
I have peers throughout the world. My peers report into the subisdiaries and the sales and marketing regions of which they're a part. That's the straight-line relationship. Then we do have a dotted line relationship with Allison, we're part of the team. So as I described my role in setting the U.S. partner strategy, it's in definite collaboration with Allison and her organization. She's setting the overall Microsoft Partner Program construct, and all the services that go along with that.

Did you have a sales role in reporting to Michael Park? *
Half of my job essentially was to manage our largest reselling and ISV relationships. I'm responsible for our finished good distributors -- Ingram Micro, TechData. (D&H, Synix and the like). Our direct market resellers and our outbound resellers, so think CDW, Dell, Insight, ASAP Software, Software Spectrum, that class of partner and there's 18 of those. The largest ISVs that we've got, we manage about 400 ISVs very directly out of my organization. Then we also manage 100 of the top national systems integrators. And those systems integrators also tend to resell our product.

If you think about Microsoft and the fact that 96 percent of our revenue flows through channels, the multibillion dollar business that Microsoft U.S. is, that's all transacted through the channels that I directly manage.


[Click on image for larger view.]
The SMS&P Org Chart Shuffle Microsoft recently rearranged top executives in its Small & Midmarket Solutions & Partners Group as a career development move to give executives, especially Margo Day and Robert Deshaies, experience in different roles. The changes are effective July 1.

What will you be doing in your new job? *
If you think about today's job, today's job is very partner facing. I get a sense of the market and what's going on with small business customers and mid-market customers or enterprise customers through the lens of the partner, because I have a very partner-facing job. Tomorrow's job will be very small and medium-business customer segment focused, driving solutions and revenues through those customers, but with partners. What I'll be able to do is interact very directly with the actual end using customer of our technology.

I'll be accountable for the sales and marketing organizations that reach the small and medium business marketing space in the West region.

Tell us a little about what led up to the switch and why you were eager to make it? **
I've been itching for about the last year to become more customer facing. As I think about the amount of technology innovation that we have in the market today, and will have over the next 12-18 months, it's unprecedented in my 22-year career in the software business. I've never seen a technology lineup like what we've got coming out of our labs now.

Vista and Office are going to absolutely reset the technology platform for our customers. [And with the rich integration now of our desktop and server products,] the kinds of solutions and applications and the uptake of our technology platform will be tremendous. I wanted to be out on the front lines talking with customers with partners on what this wave of technology innovations are really all about and what the direct business benefit will be to a customers' business.

I've loved working with partners over the last five years. The last five years, for me, over the 22 years that I've been in the technology business. This has been the pinnacle of my career so far. I didn't think it possible because I've had a lot of other great career experiences, but this one, by and large, has been the top of the top.

That said, when I think about the amount of innovation, I am so excited to get out in the marketplace working and talking with customers and really breaking through and innovating on how we shorten up their technology adoption get them to realize the full benefits of this integrated platform that we've got -- the "People Ready" business platform that we've been talking about.

That, to me, was so appealing, that I started discussions with the management team here at Microsoft on my next role and why I wanted it to be in field sales and customer facing.

Set the stage for us a little about what the state of the partner program was when you started in this job? (GM in spring 2001, v.p. in May 2003) **
Our partner satisfaction was eroding. I think that partners had lost their connection with Microsoft. They didn't feel like they were part, necessarily, of Microsoft. I would say that partners felt like we had become very enterprise-customer focused, and in that regard, very direct selling focused. They felt like they had lost their connection. That's the scenario essentially that I walked into about five years ago.

From Steve Ballmer and Bill Gates on down, they explicitly say, which is true, that Microsoft is the company that we are today because of our partners. Our company was built in collaboration with partners. For us to lose some of that muscle, they wanted to reinvest very significantly because partners need to be part of the overall fabric of the way that Microsoft does business.

And so we began a series of very significant series of investments over the last five years.

Now when you fast forward, across the board, if you look at our registered partners, if you look at our reselling partners, the certified partners, the ISV partners, across the board, our partner satisfaction is at its highest level ever. In most partner cases, we either lead the world in overall partner satisfaction in the U.S. subsidiary or we're No. 2 by a very small margin.

So it's been a very rewarding ride.

And partners feel like we're real. We're making a big difference in their business. We're selling together. We're marketing together. We are making investments in their business to train them technically. More recently we've been making more investments in training on how to run their businesses more effectively and better.

All of these things have really proven beyond a shadow of a doubt that

  1. Partners are interwoven into the fabric of the way that we do business.
  2. Partners will remain a critical success factor for Microsoft, now and for the future as far as I can see it.
  3. We want to make sure that our programs and our offerings are world-class and by far industry leading, because
  4. They add a tremendous amount of value to the partner's business themselves, and the partner can grow and be profitable whether they're very, very small or very, very big or anywhere in between.

What are you personally proudest of from your time in this job? Is it the partner satisfaction increase? **
Yes. I'll tell you what I'm also very humbled by. I'm incredibly humbled by the trust that the partners have expressed. They will say, I trust Margo. For me, trust is one of those things that...it doesn't get any better than that. (laughs). What it says is people view you as having a tremendous amount of integrity. You do what you say what you say you're going to do. You listen and you engage. Trust is hard-earned but when you earn it, it's something obviously that you need to regard as incredibly precious. And in that respect, that's what humbles me the most.

So partner satisfaction is just a measure of the fact that partners feel like they are part of Microsoft. They feel like they're part of the way that we do business. I describe it sometimes as partners, at Microsoft, when we think about partners and going to market, it's just part of the way we breathe. It's just what we do. The fact that the partners feel that in very real terms in their business, with respect to their sales growth, their profitability growth and their own customer satisfaction, man, that's fantastic.

One of the challenges when you were taking over was the integration of the Microsoft Business Solutions partners? How would you rate the integration of the partner program, and how that's going now? *
I think it's great. I think we had a number of obstacles (chuckles) to overcome over the last 2 1/2 years or so that we've been at this. But now, when you take a look at the products themselves and how richly integrated they are with Office, with SharePoint, with SQL Server, using our development tools, Visual Studio 2005, what partners are now seeing in very real terms are the huge benefits of the integration work both from a business and a product perspective that we've been doing over the last three years or so.

Now, in that context, the program itself, because the product offerings are so rich, makes a whole lot of sense for them to think beyond just the ERP application and to extend the business to things like portal, to drive things like business intelligence, build the underlying database and structures that are required. And, if they don't have the particular skills or capacity to do that work, because they're part of the bigger, Microsoft partner program they can partner with partners that have those skills. All of that wasn't available to them three years ago. It clearly is available to them now. So I feel like our Dynamics business, at minimum in the U.S. and I'm sure this is happening worldwide as well, will thrive because we've got both the product and the programs now synchronized.

You'll be stepping away from the pure partner role, but your position gives you a good view into the future. What are the biggest challenges you see for partners and for the next person in your shoes -- Robert? **
The biggest challenge is how we help partners, and then subsequently customers, consume the amount of innovation we're putting in the marketplace. If you think about the customer adoption lifecycle for just a second, there are hundreds of thousands of customers still on Office 98. There are more customers than you could shake a stick at that are on Windows 2000, Office 2000, SQL Server 2000, Exchange 2000 or Exchange 5.5. I think the biggest challenge is why this refresh from a technology platform perspective makes such sense for everybody's business. And to be able to talk about that in a construct that's not just product and feature and function related. More importantly in a discussion that drives business value.

And I think that's the whole underpinning of our "People Ready" business vision that we have in the marketplace. It says, "People are at the center and the core of what makes businesses either wildly successful, moderately successful or frankly, something less than that. Software plays a very significant role in enabling people to coalesce around the goals that they have in their professional life in order to wildly exceed those goals. And to be able then to describe what the role of software actually plays. For example, developing very big deep insight into what's really happening in the business so that you can make great decisions going forward. Is that a product? No, it actually isn't. It's understanding the level of business insight that a small business customer might need, which is probably a little bit different than what Boeing might need. How do we teach the partners, and how do we talk to the customers in a way that says, hey, with this collection of products or this set of technology solutions you will get the rich business insight that you're looking for - you will be empowered to do that.

To be able to put our products in that construct and then be able to talk to millions of customers about that, I think is a very big challenge.

What are the biggest opportunities?
I also think [the innovation wave is] a very significant opportunity. So many of our partners still are in the 1990s way of doing business, which is speeds, feeds, reselling of products. They're not in the rich business solutions that can be talked to about customers. That takes a change in business model, it takes a change in the people that you hire that are the sellers, it takes a change in the consultants that you have. I do believe that theVAR channel is going through that evolution right now -- it's a bit painful. So it's a very significant challenge for us to become very involved in helping those partners evolve their buisness models, and then at the same time, give them the skills and the toolings to be able to talk to their customers in a "People Ready" construct. Getting great compliance. Being able to empower a mobile workforce. Empowering workers with great business insight. And then subsequently what are the product technology and what are the technology underpinnings that all of that takes. That's going to be big. Can we do it? Yup.

Microsoft is making some moves into software as a service. Any advice to partners on how they can steer close to Microsoft without getting in trouble with any potential changes in the business approach?
Software as a service, managed services, it means a lot of different things to a lot of different people. I think the first thing that we're working on is to provide a better degree of clarity and definition on what all that means to Microsoft. And we'll be talking about some of that at our Worldwide Partner Conference, so that people know at a more detailed level, what that means definitionally to Microsoft. We want to be very transparent with our partner channel on where we're going and then subsequently where their areas of opportunity are.

So the way that they stay close with us would be in things like attending the Worldwide Partner Conference. To leverage the Microsoft.com/partner portal because we use that as a communication mechanism. If they attend quarterly partner briefings that we have in our field. This will be one the topics that we'll address once we have our strategy laid out so that we're very transparent with the partners on where we're going.

That strategy lay out, is that going to be kind of done by the Partner Conference or is it going to be an early model? *
I think it's an early model at this stage. I think that just as importantly, we'll give partners a sense of the definitional constructs that we're thinking about.
Let me give you a few examples. These aren't the official terms yet, but it just gives you a sense of how broad this is.

Some people think that Software as a Service is the same thing as a managed service, which therefore means things like remote networking and monitoring. Right? Instead of sending a technician out to see how the network is performing, it's now remotely networked and managed.

Or things like patch management, as an example, where it used to be that you'd have to go on site. You know, patch management or virus scrubs, you now can do all that remotely.

Some people when they hear the term, they actually think about hosted products, whether it's hosted mail and messaging. Whether it's hosted database applications, you know we've got a hosted version of SQL, as an example. You can now host CRM, so some people think we're going to go down the path of like a Salesforce.com. I think that what we need to do is reconcile all of these different models where people think about services over the Web that affect the software platform. Have us put the construct in place on the way that we're thinking about it, and have us say, hey look, here's the kind of business models we have and where you can extend. Like if you think about CRM, just as an example, let's call it sales force automation, just to be even straighter about that, right?

The amount of customization actually that a customer would need or want to really automate their sales force, will be incredibly important as people begin to shift their purchasing patterns and have some of the things that they do in a hosted kind of environment, and then have some of the things that they do in an on-premise environment. So Sales Force Automation, CRM, for pharmaceutical, retail, different derivations of manufacturing, financial services, all of those implementations are incredibly different. As we come out with the core platform, we need to make sure that we have is extensible for our partners so that they can go in and actually customize the application for the particular needs of the business.

There will always be opportunities for partners as we begin to roll out our constructs and share with everybody where we're going, there will be tremendous opportunities for partners to customize and extend what we're doing if the customer wants to use a service from Microsoft, but many won't. They may want to use a service from one of the VARs. Great. We've got technology for that. They may want to use instead, their own IT infrastructure. Great. We have licensing for that. So what we need to do is just demystify this for partners. We're beginning that path and going down that road at the Worldwide Partner Conference.

Anything else you'd like to tell our partner readers?
Thank you. I'm very, very genuine about that, and thank you for asking. I have wanted to express my appreciation to them for the investments that they have made in their businesses around the Microsoft practice. For being so open with us and collaborative with us so we really could partner together to make the businesses that we're doing together great, and to continue to do that going forward, and giving Robert, as the guy who is now going to assume this chair, the same measure of trust and respect, and maybe even more so, than they've given me. I really, I'm so humbled and honored by the trust and respect that the partners have given me.

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