by Seth Fineberg

Redmond, Wash. - Depending on their position in the market, Microsoft Business Solutions resellers in the U.S. are either elated or frustrated over news of a new volume-licensing program for selling the relatively new customer relationship management product.

Specifically, resellers are concerned about whether everyone in the company’s certified partner organizations worldwide will be allowed to sell it.

In August, barely six months after launching MS CRM version 1.0, MBS, based in Fargo, N.D., announced that it is adopting a “broader channel distribution” of MS CRM and “aligning the product with Microsoft’s volume licensing program” - one that the company has had in place for other, non-MBS products.

Microsoft also claimed that “the opportunity for CRM solutions is underserved” and that these changes “will deliver broad and more-consistent service, which will enable customers to acquire Microsoft CRM with their other volume licensing agreements, and thereby increase opportunities for partners.”

Reseller interpretation of the news, however, was varied at best, and will likely be pondered for some time to come. Some are debating whether they will even carry the nascent CRM product at all.

Lisa Kianoff, president of Birmingham, Ala.-based reseller and consultant L. Kianoff & Associates, is one of many who earned certification on MS CRM early in order to offer her clients a choice. Her firm also sells and implements the competing CRM product SalesLogix, from Best Software, and she now questions the advantages of carrying both in light of Microsoft’s move.

“My interpretation of this new plan is that our margins will go down based on the way compensation will work.

There are more hoops to jump through and, in the end, we may get our money later in the process,” Kianoff said. “You need a win-win situation between publisher and reseller, but the win is getting out of kilter with Microsoft, with not enough on our side.”

Kianoff also noted that her firm hasn’t sold MS CRM very much, though she admitted that interest remains high and she does not regret getting certified early. But, like many MBS product resellers, Kianoff is not entirely familiar with volume licensing and is concerned about the negative impact that it could have on her business.

“It just forces us to spend time learning something that is not of value to us or the client,” she said. “Now we have to figure it out just to sell MS CRM, and I’m not sure how it’s all going to play out.”

Another concern was the sheer number of resellers who will be able to sell the product, taking away any sort of exclusivity that resellers may have felt they had by earning certification early on to sell MS CRM.

According to Microsoft figures, there are 6,000 MBS partners worldwide. Microsoft has 810,000 partners worldwide; 28,712 are Microsoft certified partner organizations, which means that they are independent companies officially certified by Microsoft to develop IT services and products based on Microsoft technology. They are also now able to sell MS CRM.

One Northeast-based MS CRM and SalesLogix reseller, who wished to remain anonymous, felt that the move could be detrimental to CRM, overall.

“CRM has already gotten a bad rap and if this plan floods the market with people using MS CRM, it then becomes the same old problem of people paying a lot of money to not use it right,” the reseller said. “I’ve been around for 20 years as a VAR and, to me, this move indicates Microsoft is running scared about what to do with this product. And bringing in volume licensing is just a slap in the face to people who spent a lot of money early to get certified on it and promote it.”

Microsoft doesn’t see it that way. While the company admits that the volume-licensing portion of the deal will be an adjustment for some, it claims that the long-term affects of the move will be positive overall.

“A big part of our decision is about opening up choices for customers,” said Holly Holt, group production manager for CRM strategies at MBS. “Volume licensing is a good move. Millions of people can now buy MS CRM, while partners can ultimately shorten their sales cycles and get a bigger piece of the CRM pie.”

While Holt was not specific about the benefits to partners who bought into MS CRM early, she believes that they are at an advantage because “they are the ones who now have real customers, and people are going to want to buy more from those who have expertise and experience with it.”

In simple terms, volume licensing can work in three ways: an open agreement, where there are no quotas to meet and discounts are based on a particular order; a select agreement, where special pricing is offered to a customer based on a contractual purchase obligation; and enterprise agreements, typically for large companies that spend millions on software products every year. They get deep discounts, but have steeper purchase obligations.

Microsoft also said that this new strategy will not include Great Plains, Solomon, Navision and Axapta or FRx products, though there are reseller concerns that it eventually will.

Resellers like Sacramento, Calif.-based Altara, see no problem with the new arrangements and are excited about the prospect of more small to midsized businesses becoming aware of CRM. “This really opens up the door for us,” said Altara president Helene Cole. “Instead of five MS CRM opportunities a month there will be 50.”

She said that her firm has already closed more MS CRM deals in three months than in the entire three years in which it handled Siebel Systems, another “front office” software application that has been marketed with MBS’s Great Plains accounting software line.

Cole admits that Microsoft’s new strategy is not for everyone but, in the end, she still sees the upside for those who run their businesses well.

“The channel will be divided, there is no question of that. But if you have a solid business and a lot to offer, you will see the upside to this,” she said. “Sure, it’s more of a commodity-sell now. If you were differentiating [your business] already, you will be happy.”

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access