Microsoft is replacing channel chief Gavriella Schuster with Rodney Clark, who has led the company’s mixed reality and IoT sales. The change, announced Tuesday by corporate VP Nick Parker, will take effect on Thursday.

Microsoft’s Rodney Clark

The move comes as Microsoft continues to expand its routes to market. The company increasingly is signing non-transacting partners and last summer launched its new Microsoft Consulting Services business.

Schuster, who was Microsoft’s channel chief for nearly five years, was well regarded by the company’s partners. However, some missteps and major changes in technology and the channel led some observers to suspect an inevitable leadership change.

Amid discussions within Microsoft about the necessary steps needed to transform Microsoft’s partner organization, “we concluded that now is a good time to begin to transition my current Microsoft accountabilities and focus on thinking about how to engage in work that fuels my passions,” Schuster wrote on her LinkedIn page.

“The restrictions brought on by COVID-19 have given me time to reflect on and reconnect with my passions and to spark a new passion to drive a movement to shift the status quo and make an impact on inclusion and gender equity in the tech industry,” Schuster added.

The inspiration came when she prepared last year’s TEDx talk on how to achieve gender equality, she noted.

Parker lauded her run as Microsoft’s global channel chief.

“She has accomplished so much for Microsoft and our partner ecosystem in transforming the business,” he noted.

According to Parker, Schuster is “is ready to transition” and “refocus her efforts on other areas of leadership.”

Accomplishments and Missteps

Among her accomplishments are the formation of Microsoft’s One Commercial Partner team. Schuster also developed Microsoft’s cloud ecosystem, which now has 90,000 partners. Furthermore, she helped mature the Cloud Solution Provider (CSP) program, Microsoft Partner Network (MPN) center and helped advance partner co-sell efforts, according to Parker.

Queue Associates’ Jeffrey Goldstein

“From a public-facing standpoint, you know, she was great,” said Jeffrey Goldstein, managing director of Microsoft partner Queue Associates and a past president of the International Association of Microsoft Channel Partners (IAMCP). “She was very partner friendly.”

Schuster’s tenure as Microsoft’s channel chief exceeded the industry average in that role, said Forrester principal analyst Jay McBain.

“The industry average is 4.2 years for large company channel chiefs,” McBain said.

He added that during the last three quarters, the growth of Azure revenues was 50%, 48% and 47%, respectively.

Forrester’s Jay McBain

“Her ‘grass roots’ community coverage is also off the charts — best person at her level based on the size of program according to my measurements,” he said.

One notable misstep was the internal use rights debacle — one that insiders say angered top executives. On the eve of Microsoft’s Inspire partner conference in 2019, the company announced the elimination of internal use rights of its software by partners. The hastily announced plans to take away use of Microsoft Action Packs angered thousands of partners. The backlash was so strong that …

… Microsoft reversed the decision, and Schuster ended up apologizing to partners at Inspire.

New Leadership for Changing Channel Ecosystem

Nevertheless, Microsoft’s channel is undergoing a significant transformation and it requires a different type of leader, said Janet Schijns, president of JS Group.

JS Group’s Janet Schijns

“Gavriella is a known, respected channel influencer, who has done so much for the channel,” said Schijns. “But it’s the Microsoft channel strategy needs to evolve and requires, as every channel does, some new thinking.”

Schuster was, in fact, Channel Partners/Channel Futures’ Channel Influencer of the Year in 2018.

Clark, a 25-year Microsoft veteran, has spent the past several years leading IoT and mixed reality sales. He also spent two years leading Microsoft’s alliance with Samsung and held operational roles.

“In his 20-plus years at Microsoft, Rodney has been no stranger to the channel, maintaining proximity and spending a vast majority of time dedicated to growing partner value,” Parker said.

Changes in Tech, Business Models

Schijns said Microsoft needs someone with Clark’s understanding of changes in technology, and how businesses increasingly are acquiring it. Like many large players, Microsoft is signing on thousands of non-transacting partners – such as developers and referral partners – each month.

“Rodney is going to bring fresh expertise to the table and challenge the way the channel has always done business,” Schijns said. ”And he will find new routes to market where Microsoft can expand significantly. I’m sure that Gavriella will land somewhere meaningful, because she’s a trusted leader. And I’m sure based on Rodney’s reputation, that he’s going to bring some new policies to the channel, new approaches to the channel that will inspire the partners that they most need to be engaged.”

Lopez Research’s Maribel Lopez

Clark’s expertise in mixed reality and IoT will be a good fit as both will offer new growth opportunities, added industry analyst Maribel Lopez of Lopez Research.

“The really interesting thing about IoT and mixed reality sales business is it requires a lot of knowledge of different industries and different applications, so that might be really good for channel sales,” Lopez said. “It will give them a broader purview in terms of what types of partnerships they need.”