by Seth Fineberg

Redmond, Wash. — As Microsoft enters its new fiscal year it has made clear its commitment to Microsoft Business Solutions through significant managerial shifts at that business unit — changes that, for the most part, are being well received by its channel partners.

In June, MBS announced that senior vice president Doug Burgum will report directly to Microsoft chief executive Steve Ballmer, while the group’s sales and marketing arm and its leader — Orlando Ayala — were folded into MBS.

Last March, Ballmer personally appointed Ayala to head up Microsoft’s 8,000-person Small and Mid-market Solutions and Partners Group, giving the needed sales and marketing muscle for MBS.

But, after much discussion, Microsoft placed Orlando Ayala and his division under Burgum’s purview.

Ayala now serves as chief operating officer of MBS and is charged with driving sales, services, marketing and operations strategy for the business groups. He reports directly to Burgum.

Prior to the shuffle, both Burgum and Ayala reported to Jeff Raikes, vice president of Microsoft’s Information Worker Business group — one of Microsoft’s seven divisions.

Those in the industry, particularly most MBS resellers, see the move as a clear indication of Microsoft’s commitment to the success of the MBS division and its products.

“Doug’s involvement with long-time MBS partners and being higher up the chain at Microsoft means a voice of reason goes directly to the top. He wrote the book on how to treat partners, customers and team members,” said Lisa Kianoff, president and founder of Great Plains and Small Business Manager reseller L. Kianoff & Associates Inc. “With the Great Plains acquisition by Microsoft [in late 2000], a lot of the ‘heart’ of it has been dwindling away. I hope with Doug’s position adjustment, some positive changes in the MBS arena will follow.”

There are also those who believe that, while the move is positive for MBS, there is now increased pressure for the division to succeed or at least show progress over the next year. Terry Petrzelka, president of Tempe, Ariz.-based MBS reseller and Microsoft Inner Circle member Tectura, is one of them.

 “The people who understand ERP are now in charge and SMS&P will have to pay attention to the MBS product line, more than they have in the past,” Peterzelka said. “MBS now has a year to make significant things happen, otherwise there will be an issue of them asking, ‘Do we have the right management team?’”

Petrzelka and others also noted that, even before the recent changes were enacted, overall communication between resellers and MBS had improved and that “clearly, they have been listening to us.”

MBS executives also recognized some of the issues that resellers have had with the company, and are pleased that many in their channel are finally seeing a turnaround. There had been numerous instances of MBS resellers simply not feeling that they had proper communication lines within the corporation, but in recent history much of that has been cured.

With the recent internal reorganization, MBS has even further opportunity to improve communication with its partners, according to Tami Reller, corporate vice president of marketing and strategy for MBS. She admitted that the internal moves were largely due to some “hard lessons learned” over the past year and with an eye towards the future of MBS and its products.

“We realize it has been hard for those who had prior relationships [with certain MBS personnel] and now we want to make sure they are further supported by MBS specialists in the field,” Reller said. “As we look at 2005, there will be a number of specialist roles for CRM and ERP and additional resources placed on MBS. It’s very material and it’s not just about top-line leadership.”

Reller also said that, regardless of the fact that they were part of separate organizations, Burgum and Ayala had been able to work together very closely over the past year. And now that SMS&P and MBS are one, Reller said that it is “an even stronger organizational model,” as well as “further validation of the group’s importance,” Ballmer’s faith in Burgum, and Microsoft’s commitment to business applications.

Reller’s marketing group has also gone through changes.

Jeff Young, who was vice president of customer relationship management and retail at MBS, is now general manager of the division’s Great Plains and Solomon accounting products.

Yet even with all of the managerial adjustments at Microsoft’s business application division, there are still long-time resellers who, while positive about the moves, do not feel that they will affect their own business.

“We have seen positive things happening in our space despite what goes on at Microsoft. It’s still going to be work,” said John Peace, managing director of New York-based Great Plains and Solomon reseller AccountNet. “I feel pain when sales cycles take longer. We are finally seeing them shorter. A lot has to do with the people. Some want to live with what they have, though it may not be that great, others change their minds.”

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