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Convergence: Too Many Dynamics Partners?

Philippe Gaillard (who, it randomly turns out, was a neighbor and rugby opponent during your editor's days living in Paris) gets it. The president of Neocase, an ISV that provides support applications and integrates its wares with Dynamics CRM, explains very succinctly why Dynamics ERP and CRM are getting attention from so many companies:

"They look [at Dynamics] because they're sick of paying millions of dollars."

Et voila! There are a lot of reasons why companies of all sizes are looking at Dynamics, but none is more compelling than the potential for getting serious functionality without paying the exorbitant prices often associated with enterprise software. Combine that with Microsoft's integration message, and what could go wrong for partners selling Microsoft's applications?

Channel congestion, that's what. Yes, apparently some partners feel as though the Dynamics channel is too crowded -- and this at a time when Microsoft officials say that partner recruiting is going "very well." More partners competing for gigs can mean tighter margins, dangerous implementations and maybe even more sales for SAP and Oracle -- especially when those companies approach with their direct sales forces customers befuddled by a flotilla of Microsoft VARs.

Jeff Sampson, founder and CEO of Kineticsware, was one of the architects of Microsoft's industry builder initiative. He's seen what can happen when Dynamics partners fight for a place at a customer's table.

"We would very frequently get involved in customer situations where you had sometimes eight VARs," Sampson says. "You're a buyer -- you have Oracle, SAP and eight Dynamics VARs, with three of them pitching one product, two pitching another and so on. The customers says, 'Microsoft, can you tell me which one to work with?' and Microsoft says, 'No.'"

Microsoft has to say no. That much is obvious. But what can Microsoft do about channel congestion? Stop recruiting new Dynamics VARs, some partners say. But a more likely scenario is for Microsoft to choose the partners it invites to bids at a customer's request more carefully.

"Why should you invite smaller partners to global accounts?" asks Aliona Geckler, vice president of global marketing for Columbus IT , who calls the problem of competition within the channel "huge." "If the customer asks Microsoft, [Microsoft] shouldn't go with more than one partner, more than two partners. It should be very clear by industry and by size."

Those are all valid points, but there's nothing wrong with a little competition, right? Well, no. And channel crowding is, unfortunately, one of the disadvantages of the indirect sales model. To some extent, that's just the way it goes. At the same time, Microsoft should be careful not to submarine its strong Dynamics offering by overwhelming potential customers. Maybe carefully choosing partners to respond to customer requests is a good strategy -- not that Microsoft isn't trying to do that already, and not that that's easy to do for a vendor that's supposed to stay partner-neutral.

Perhaps, though, the best idea is for partners to police themselves. That's the message that Mark Jensen, general manager, Microsoft Dynamics market development, wants partners to get.

"Do some soul searching to find out who you really are," Jensen says. "Are you really a VAR, are you really a full-service implementation partner, are you really an ISV? We see too many examples where partner organizations might be struggling because they're trying to be what they're not. Find out who you really are and then don't fight it."

In other words (our words), don't jump into a job that you know you really can't do and ruin it for everybody. That's easier said than done, but it would be a shame to see a potentially massively successful concept like Dynamics struggle due to Microsoft's greatest asset -- its partners -- spending too much time and money fighting with each other when it's not really necessary to do so.

Posted by Lee Pender on 03/16/2007 at 1:20 PM


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