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Dynamics Channel Changes: Adapting & Staying Profitable in the One Commercial Partner Era

Until recently, Microsoft’s channel-facing organization had been relatively stable for years. Lately, the channel has seen major changes to Microsoft’s partnering model, creating hurdles for some partners, but these changes have been necessary for Microsoft to keep pace with competitors and meet new market demands. As the push to be at the leading edge of 3rd platform technology, DX and remain relevant becomes more competitive, Microsoft is refocusing more resources than ever around its cloud solutions. Recent changes like the announcement of the One Commercial Partner Program have reshaped the Microsoft Partner Channel, especially in the Dynamics space. Checkout our whitepaper “Demystifying Microsoft’s Cloud Service Provider Program for Dynamics Partners” to learn how CSP can enable partners to move to modern with minimal shock to their business.

Dynamics Channel Changes

Just as the development teams and product groups out of Redmond were consolidated under the leadership of people grounded in cloud, the partner teams have been similarly reorganized.  Since the launch of the One Commercial Partner program last year, the channel has experienced:

  • The Elimination of a separate Dynamics field organization
  • The early retirement of many long-time Dynamics leaders
  • And the former Cloud/Platform leadership put in charge of the entire SMB space

Microsoft has been reorganized around supporting the One Commercial Partner model and partners who want to continue working with Microsoft and capture new revenue in this time of booming opportunity will need to be able to sell and support Microsoft cloud infrastructure as well as productivity and business solutions.

Leveraging the Cloud Service Provider Program

The Cloud Service Porvider (CSP) program helps cloud and traditional vendors to adapt to a recurring revenue model at their own pace to sell and support Microsoft cloud with minimal shock to their businesses.

Making Margins Work in the Cloud

With shrinking margins and service revenue opportunities, cloud economics requires providers to deliver a greater share of customer IT portfolio, selling more subscriptions across their client base in order to stay profitable. To drive reasonable margins and deliver a better customer experience, partners can bundle solutions to create customer value, simplify pricing models and drive down internal costs.

New Challenges

Microsoft is significantly upping the requirements for the competencies associated with Dynamics 365 with the introduction the Cloud Business Applications competency for partners that specialize in deploying and managing Dynamics 365 solutions. This new competency combines the traditional Dynamics CRM and ERP apps into one competency and significantly increases the number of technicians that need to pass the certifications.

One Commercial Partner Era: 4 Fundamental Changes for Adapting to Change

It’s probably not news to you that Microsoft has been reorganized around supporting the One Commercial Partner (OCP) model. What does this new era mean for resellers and ISVs?  Partners will need to be able to sell and support Microsoft cloud infrastructure as well as productivity and business solutions to keep working with Microsoft  and capture new revenue in the cloud space. This blog explores the four big changes partners will have to make to continue to make money and maintain reasonable margins in the OCP Era. The Cloud Service Provider program has been created to help partners adapt to these changes. Checkout our whitepaper “Demystifying Microsoft’s Cloud Service Provider Program for Dynamics Partners” to learn how CSP can enable partners to move to modern with minimal shock to their business.

 

1. Adapting to the Recurring Revenue Model

The recurring revenue model of the cloud market enables solution and service providers to grow their revenue streams year after year, but there are challenges to this change. Vendors who are used to getting paid up front for software, services, sometimes hardware and some ongoing maintenance revenue need to start thinking about how they will migrate their business to a recurring revenue model. This includes creating ongoing customer engagement and an online marketplace for transacting, billing & collection and order provisioning.

2. Expand Solutions Portfolio

To compete effectively partners need to be conversant not only in regard to ERP, but in CRM, Office 365, PowerBI and Azure as well. Depending on the verticals in which you specialize you may need to add capabilities around the rest of the Dynamics 365 applications, so you’ll want to learn the new elements like PowerApps and Flow.  With new versions of D365 and new features being developed at an increasing pace, partners will need to continue learning to stay up to speed on product knowledge including extensions.

3. Differentiate

As with traditional business software implementations, cloud ERP vendors will need to offer vertical or functional domain expertise with custom IP to create customer value and differentiate from the much larger pool of competitors. With the proliferation of CSP Online Marketplaces, the ability to bundle solutions and the very transparent pricing model on the Microsoft’s website, vendors who cannot offer any value-add or can’t effectively communicate their value will be forced to compete purely on price. It will be very difficult for independent resellers to compete on price with large online resellers. The good news is business customers will pay a premium for the added value that a true software partner offers, so Dynamics partners need to leverage their industry specific knowledge, experience and vertical expertise to maintain reasonable revenue streams.

4. Market, Sell and Deliver Digitally

Because commercial software customers increasingly want to shop, compare pricing and transact online at a lower cost, service and solution providers must undergo some form of digital transformation.  Digital transformation will help reduce cost of delivery, reduce cost of sales, reduce the sales cycle length and drive more velocity in the pipeline so partners can close more business to maintain revenue.  A professionally built website and social media properties are now critical strategic assets to reach prospects and communicate with customers way beyond your geography.

Microsoft’s Cloud Service Provider program helps cloud and traditional vendors do  with minimal shock to their businesses. Learn More

One Commercial Partner Era – How to Stay Relavent

Watch this presentation to learn more about the One Commercial Partner (OCP) program and how it impacts Partner revenue.

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Industry experts and channel veterans Scott May and Dave Wallen evaluate the impact on Dynamics partner revenue and introduce a variety of ways partners can navigate this very disruptive period.

Learn more about how Microsoft’s Indirect Cloud Service Provider program can help your organization kick start new revenue with the rollout of the One Commercial Partner (OCP) program. Microsoft’s OCP program permanently severed the historic divide between Dynamics partners and the rest of the channel. The field staff of the OCP program are called Channel Managers and are, as described by Channel Chief Ron Huddleston, “100% dedicated to help you sell solutions built with Microsoft Azure, Microsoft Office, and Dynamics 365.