Microsoft‘s David Willis is an anomaly. While he’s been at the company for more than a quarter century, most recently as corporate vice president for Microsoft’s U.S. One Commercial Partner (OCP) group, he retains a sense of humility. He also has a clear vision that partners are key to the company’s success and readily admits that it’s only with their help that Microsoft can achieve its stated mission: “to empower every person, every organization on the planet to achieve more.”

Willis says Microsoft has done three distinct things to help itself and its partners capture their share of what he says is a $1.7 trillion digital transformation opportunity.

Microsoft’s David Willis

That includes the 200-person team to enable partners technically, the marketing team it’s put in place to help partners drive business at scale, and the way it’s changed compensation for its own sales team to encourage co-selling with partners.

Willis is referring to the new co-selling “Channel as a Service” program in which Microsoft compensates its own field sales personnel for helping close sales of partners’ services. It seems illogical for Microsoft to compensate its salespeople when there’s no additional revenue for Microsoft itself. The motivation can be found in the fact that the program started with a community of about 3,000 independent software vendors (ISVs) to compensate them for driving applications that run on its Azure cloud computing platform.

Quid Pro Quo

Clearly, while Microsoft continues to report sales of tens of thousands of Azure subscriptions monthly, this program indicates that Azure is yet to reach its consumption targets. Since Azure uses consumption-based billing, no revenue is realized until services are consumed. This remarkable program, as well as the other significant programs Willis describes, indicates they still have a long way to go. Perhaps a very long way, given the extreme measures they’re employing to drive increased Azure consumption.

The takeaway for partners is, as always, to never be naïve when managing their Microsoft relationship.

Don’t forget that Microsoft is a business that is in business to make money. While executives like Willis are sent out to evangelize the great things Microsoft is doing for partners, it’s important for partners to keep in mind that this is a quid pro quo. The more you find ways to benefit Microsoft, the more ways it will work with you.

The most successful Microsoft partners have always been those who understood the two-way nature of the relationship. They remained mindful of the big bets, Steve Ballmer’s term for the company’s current major focus, which has been Azure consumption for a few years now. They bring Microsoft field people into accounts to earn the same coming back from them. They give so they can get.

Redefining ‘Solution’

Willis is encouraging partners to join him in becoming customer-obsessed and taking conversations beyond technology to focus on developing a thorough understanding of each customer’s business and the challenges they face so they can empower each customer to do more.

Slogans aside, the shift from on-prem to cloud didn’t precipitate the focus on selling solutions. Those joining the original Microsoft Partner Program (MSPP) and its successor, the Microsoft Partner Network (MPN), have always been referred to as solution providers. Back in 2011, a Microsoft executive acknowledged that many partners define solution as …

… just more infrastructure. The shift to cloud has created the need for a redefinition, an evolution of solution. Today’s solutions must be relevant to customers’ business. This is what Willis, remaining consistently on message, refers to as simply do more.

The Critical Need to Differentiate

With customer-obsession being the first priority, the second is around partners differentiating their business.

Acknowledging that the differentiation strategy most discussed has been the development of salable intellectual property (IP), he recognizes that not all partners will become software developers.

“And we don’t need them to be,” explains Willis. “There’s a lot of other value that we need from partners as well — could be expertise, could be an industry level. We’re seeing partners focus on specific industries again. They can really do that well and do it better than anyone else.”

This observation goes back to the original reasons the IT partner channel was created. The first large manufacturer to recognize the need for a channel was IBM. Despite its policy that “nobody can sell IBM except IBM,” the company realized it couldn’t build a field force large enough to reach the enormous market of customers for personal computers. This drove them to create the reseller channel in August 1981. Microsoft, too, has always recognized the value of the channel.

Managed service providers (MSPs) should take especial note of the importance of differentiation. The ascent of cloud computing has created a mass movement of resellers and VARs to become MSPs, to the point where there are an overwhelming number of channel partners now calling themselves such. Their definitions and their competence vary widely, resulting in customer confusion and concern. Once burnt, customers become painfully careful in selecting their next MSP, significantly delaying the sales motion.

This simply means that today’s MSPs must carefully consider how to differentiate their business. For many, the answer is to find their niche and focus on being a specialist rather than the generalist they have always been.

Willis points out the resources that Microsoft offers to partners in this regard. Recognizing the emphasis Microsoft and many other manufacturers place on specialization or competencies, Willis encourages partners to “take advantage of our ecosystem. This is where I’m seeing more breakthrough than ever before. I think it’s because our partners are becoming more specialized, that they’re able to connect better.” While acknowledging the reduced areas of overlap between specialized practices, Willis emphasizes that also means that partner-to-partner partnering is now becoming the only strategy for capturing broader, larger projects.

“One of the most successful programs we’ve launched over the past couple of years is our cloud solution provider (CSP) program, especially when you look at the take-up,” Willis said.

CSP is a two-tiered program in which smaller partners can join with larger partners who have greater billing and technology support resources.

“It’s definitely one of the most successful programs we’ve had that really drives alignment, too. CSP drives both new customer additions and cloud consumption, which makes for …

… the kind of profitable business venture partners would like to see.”

Willis continues to focus on the many opportunities available to partners, from cloud computing to data analytics, AI, machine learning, and so much more. His advice to partners: clearly focus on specific technology solutions upon which you can build your reputation.

Don’t Be All Things to All People

His discussion of the CSP program emphasizes what is becoming more obvious in the channel today: the key to success is to focus on what you do best, and perhaps convert it into your own IP for resale.

Such focus requires that you phase out other, more commoditized services and obtain them for your customer from a partner. In the many roles Willis has played at Microsoft, from Eastern Region vice president to Dynamics VP, to Small and Midmarket Solutions & Partners (SMS&P) VP, he has always been a champion of partner-to-partner partnering, providing constant support to organizations such as the International Association of Microsoft Channel Partners (IAMCP), especially since the introduction of the Microsoft Partner Network, which raised the bar to get partners to focus and specialize in specific competencies.

If there’s any lesson the channel has learned it’s that you really cannot be all things to all people, unless your company is huge. Better to achieve quality and differentiation through focus, and partner for all the fundamental, commoditized services outside your scope.