Microsoft partners will be given a "score" under new program changes

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Microsoft partners will be given a "score" under new program changes

Microsoft plans to change the names of its partner program and internal use rights licenses while requiring solutions partners to score high enough in a new indicator that measures partner performance, skilling and customer success.

These are some of the biggest announcements coming out of US-based Microsoft’s state of the partner ecosystem event held virtually Wednesday.

Internal use rights licenses (IURs) are now known as product benefits, according to a blog post written by Rodney Clark, Microsoft’s corporate vice president of channel sales and channel chief.

The Microsoft Partner Network will change its name to the Microsoft Cloud Partner Program in October.

“This announcement is about more than a name; this change better reflects the enormous and ongoing transition of business operations to the cloud, and how Microsoft intends to support partners in the future,” Clark said. “It aligns our partners’ go-to-market motions with the way customers buy today.”

Microsoft reported in its latest earnings call in January that Azure was part of the push to a record quarter. Microsoft Cloud revenue reached US$22.1 billion for the quarter, up 32 percent year over year.

As for the new indicator, called the partner capability score (PCS), partners now have access to Partner Center dashboards that measure their PCS progress. The new scores take into account certifications, added customers, successful deployments and overall growth, according to the blog post.

To qualify as a “solutions partner” – one of two levels under the new Microsoft Cloud Partner Program – businesses need a partner capability score (PCS) of at least 70 points out of an available 100.

“Prior to October,” according to Clark’s post, partners will see “no impact to partners’ business or program status — including anniversary dates — and no reduction in benefits” if they aren’t above a score of 70.

Microsoft will update its benefits program to include the renewal of the benefits partners are currently using, while allowing new benefits packages to be customised to meet partners’ unique needs based on their business focus. Partners can keep using product benefits – the former IURs – including on-premises licenses, cloud service subscriptions and Azure credits.

No partner incentive eligibility will change in the 2023 investments and incentives program year, which runs from October 2022 to September 2023, according to Microsoft.

The changes come as Microsoft partners continue to adopt changes the tech giant launched under the “New Commerce Experience” banner. New Commerce Experience (NCE) has come with a premium on monthly payments for Microsoft 365 – the tech company’s popular package of applications including Word, Excel, Teams and SharePoint.

Customers can go with an annual contract to avoid the premium, but partners are on the hook if a customer purchases an annual commitment and no longer needs the license due to the business failing, acquisition or another reason. This leaves partners to pay the rest of the contract.

Microsoft has more than 400,000 organisations worldwide in its partner ecosystem.

The newly christened Microsoft Cloud Partner Program will have two qualifying levels, according to Clark’s post. “Solutions partners” meet specific requirements across a partner capability score for each service area. “Specializations” and “expert programs” give solutions partners ways to stand out from other organisations and demonstrate technical expertise.

“These two designations clearly and immediately validate a partner’s capability to meet specific and evolving customer requirements and give customers an easier way to identify partners with technical capabilities, knowledge, and a history of delivering innovative solutions in specific areas,” Clark said. “They also provide a roadmap for helping build partner capability and guiding the way we invest in partners.”

The new program is focused on six service areas with Microsoft Cloud, three of which are baked into Microsoft’s Azure cloud offering. Those three are data and artificial intelligence; infrastructure and digital and application innovation.

The other three service areas are business applications, modern work and security.

In his post, Clark said that Microsoft’s channel executives have three commitment areas for enabling partners. The three areas are strengthened digital capability, improved partner technical capabilities and streamline the engagement between Microsoft and its partners.

Microsoft plans to improve its digital capability with guidelines and resources for partners across commercial marketplace, Partner Center and other digital experiences to help partners build services more easily, improve go-to-market and sell with Microsoft.

Microsoft will help partners gain advanced specialisations and technical training in business applications, Azure and security, compliance and identity and other areas, Clark said. The company has committed to spend 250 percent more year over year on partner technical capabilities.

The tech giant is also looking for more ways to enhance the commercial marketplace and Partner Center. In July, Microsoft dropped marketplace transaction fees from 20 percent to 3 percent.

“Customer needs are constantly evolving, which is why we are announcing this evolution now and preparing for the changes it will bring,” Clark said. “We’re excited to take this next step in the evolution of our ecosystem — putting customer value at the center of our continued partner investment.”

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