Wednesday, November 21, 2007

What are we worth to Microsoft?

The big opening presentation at SMB Nation included this announcement:

For the just-completed fiscal year, Microsoft license sales by, and as a result of SBSCs, reached $100,000,000.

One hundred million dollars (US).

Yeah. Cheers. Whoopeee.

Now, on the way to the conference center, you pass a building with a 50 foot tall banner hanging down -- an advertisement for Halo3.

Halo3 was released three days before the conference started. By the time we got on the airplane to fly home, Halo3 had sold $300,000,000 worth of product.

We always hear about how rabid the Apple users are. They're the most vocal 4% on earth.

But the truth is: A whole lot more people Love Microsoft, Love Windows, and Love Office.

And even though the media like to play up the whole "evil Microsoft" and "everybody hates Microsoft" crap, it's just not true.

Anyway, the point is: Lots of people love Microsoft products.

Perhaps Microsoft has finally decided that they have so much good will that they can simply alienate a segment of the population with no long-lasting ill effects.

The not-so-secret secret is that you can make a lot more money selling directly than you can through the channel. And, truth be told, a whole lot of people are eager to lay down the Visa card and buy direct.

Once the resolve to be a channel-only vendor is broken, things can never go back to what they were. But how does MS get the ball rolling?

They can't start by going direct-on with their most profitable Gold Certified partners. That would be stupid.

And they don't want to go against their nicely-profitable Certified Partners. That would be silly.

Those targets will come later.

So a quick dip into direct sales will have to be focused very clearly on Registered Partners.

Hence the deal with ComCast.


In the end: What are we worth to Microsoft?

We -- the SBSC community -- bring resources of good will, software recommendations, and the occasional channel sale.

But truth be told, we're a bunch of small business owners serving a bunch of small business owners. Small x small = small.

Very few of us can brag about one million in Microsoft licensing sales.

Let's see . . .

Halo = $300,000,000 in a week.
that's $ 42,857,142 per day
and $ 1,785,714 per hour
or $ 29,761 per minute

SBSC = $100,000,000 per year
which is $8,333,333 per month
or $1,923,076 per week.
that's $ 274,725 per day
and $ 11,446 per hour
or $ 190 per minute

Stop: How many dollars worth of Microsoft licenses did you sell in the last twelve months? One minute's worth? Two minutes' worth? Three minutes' worth?

On the Halo scale, my firm will finish the year in the range of 3 or 4 Halo sales minutes.

So I'm not confused about my value to Microsoft.

All of my value must therefore be tied up in good will and software recommendations, because it's not in channel sales.


Don't be sad.

This is neither a good thing nor a bad thing. It's just a thing.

I would venture to guess that almost everyone who reads this is a fan of Microsoft.

Somehow, somewhere along the way, Microsoft has earned massive amounts of good will in our community.

It's not just the SBSC program, which is so spectacular that it is actually irrational to not participate.

Microsoft has worked for years and years to develop great programs, great software, and great training geared toward our space.

So Microsoft's Bank of Good Will has many deposits.

When they make a mistake, there's a little withdrawal and the balance goes down. But they can survive some pratfalls based on current deposits of good will.

But let's not forget that Microsft is just another vendor.

They do things right. They do things wrong.

They do things that are in your best interest, and they do things in opposition to your best interest.

Where they are channel friendly, you should jump on board. Where they want you to lead your own clients to Live Office and Live Meeting, then you should walk away.

When they offer free training and resources, take it. When they want to sell training and resources, buy what brings value to you.


At the end of the day, the micro-consultant (SBSC, not Certified Partner, not Gold Partner) has one primary value to Microsoft:

- You are their goodwill ambassador. You are their "unpaid" sales force.

Microsoft pays you with free software and free training, with special programs here and there.

What are you worth to Microsoft?

You're worth the cost the PAM program and the SBSC program, plus the PAL program, a couple of the MVP programs, the training, and the go-to-market campaigns. Oh, plus hands-on-labs, TS2, Connections, MSDN events, the MAPs program, and the big orange/green truck.

I'm sure I'm forgetting some!

Microsoft is still making plenty of money on us. But they are also continuing to make deposits in that bank of good will.


Nothing has changed.

Run your business in a manner that makes money for you. Where your interests coincide with a vendor, use their resources. Where they don't, go do your own thing.

Microsoft is just another vendor doing their own thing.

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