CMP Channel Network | Partners: Microsoft’s Small Business Strategy Needs Clarity

By Kevin McLaughlin, CMP Channel

More than two years after Microsoft launched its Small Business Specialist Community, the vendor says it has seen a steady stream of solution providers come on board. But some partners feel that from a channel standpoint, the program to date has been heavy on form, and light on substance.

Last weekend at the SMB Nation 2007 conference in Redmond, Wash., Microsoft touted the fact that more than 5,000 partners have joined the SBSC program and said licensing sales for SBSC partners is growing four times as fast as that of the vendor’s non-SBSC partners.

At the event, Microsoft, which defines small business as companies with 50 or fewer employees, also launched the We’ve Gotta Guy marketing campaign, which highlights how IT shops often position their technical experts, as a way of emphasizing the specialized skills that SBSC partners bring to the table.

However, some Microsoft partners told CRN the value proposition around SBSC is still murky, and wasn’t clarified to any great extent by the recent announcements. Instead of a marketing blitzkrieg, they’d prefer to see Microsoft respond to their concerns about certain features of the SBSC program.

For example, some partners are still fuming over changes Microsoft made earlier this year to its SBSC partner locator tool, which is designed to allow partners to find other small business specialists in their area in order to collaborate on deals.

In the past, Microsoft structured the locator in such a way as to reward partners who were more active in the program — and who have higher levels of expertise — with higher rankings in the search results. But in June, Microsoft switched to a geographical emphasis, returning results based on a partner’s primary physical zip code, according to solution providers.

“Now, because it’s linked to the zip code, if someone searches on primary zip, they won’t hit me directly,” said Chris Rue, CEO of Black Warrior Technology, a Northport, Ala.-based Small Business Specialist.

“There are a ton of companies that don’t do anything in the Microsoft partner program, but are ranked above me in the search results. The fact that Microsoft doesn’t rank based on expertise and activity within the program bothers me as a partner,” said Rue.

Microsoft says its research in the small business segment has revealed that small businesses prefer to search for other partners based on geographical location, says Eric Ligman, Microsoft’s senior manager of community engagement for small business in the U.S.

“Small businesses like working with someone [located] close to them who’s competent,” said Ligman.

Other partners suggest that barrier to entry for the SBSC program is too low, and are nonplussed by Microsoft’s oft-repeated proclamations about the rapid growth of the SBSC community.

“You have to look at how easily they’re letting in new members. When a program like this gets too big, the value of saying Small Business Specialist gets smaller and smaller, because the partners aren’t differentiated,” said Jennifer Mazzanti, president of eMazzanti Technologies, Hoboken, N.J.

“I’ve noticed that a lot more people are using the SBSC designation, and from a marketing perspective, the more there are, the less impact the designation has,” added Mazzanti.

Other partners disagree with the notion that the SBSC could eventually become an area of channel conflict. Matt Makowicz, president of Endeavor Technologies, a Somerset, N.J.-based solution provider, says the small business market is large enough that SBSC partners won’t end up competing with each other anytime soon.

“There are so many businesses out there, you could have 50,000 small business specialists and the market still wouldn’t be saturated,” said Makowicz. “Having SBSC status is certainly isn’t the only way partners can differentiate themselves. It will get to the point where it will be a requirement to do business with a small business customer.”

Jeff Middleton, a small business consultant and founder of SBSMigration.com, says that in addition to giving partners an opportunity for better engagement with Microsoft’s outbound team, the SBSC program allows partners that haven’t achieved Certified or Gold status to be recognized as something more than a reseller.

However, Middleton adds that the SBS program doesn’t necessarily drive skill sets or high value return, because Microsoft hasn’t invested the same resources in SBSC as it has in Gold and Certified partners.

Black Warrior’s Rue agrees that Microsoft needs to boost its investment in the SBSC, because unlike the vendor’s other designations and certifications, there’s a general lack of awareness of what SBSC solution providers can bring, even in the channel.

“People know what Gold and Certified means, but SBSC doesn’t carry the same cachet. The value proposition of the SBSC logo needs a bump from Microsoft, both in the marketplace and with consumers,” Rue said.

That’s part of the plan, says Ligman, noting that Microsoft will spend $2 billion in FY2008 on partner training and support, a healthy portion of which will trickle down to the SBSC program.

Vlad Mazek, a Microsoft Exchange MVP and Small Business Specialist based in Orlando, Fla., says Microsoft’s efforts to raise the profile of the SBSC designation are paying off in the form of higher levels of expertise in the other levels of its channel program.

“I think the progression will be that successful SBSC members will emerge into the higher levels of the program. The long term picture is that SBSC establishes a baseline from which you can grow even if you’re a one-person shop,” said Mazek.