With last week’s news of Steve Ballmer’s retirement within the next twelve months, his company’s stock rose 7 percent and analysts waxed poetic about the positive effects his departure would have on the organization. Even without a new CEO in place, several channel experts have already suggested that the management change would result in a philosophical shift at Microsoft that would reenergize its partner programs and rebuild reseller confidence. Though there was no hard evidence to back up those comments, the optimism coming from some of the top solution provider and channel executives seems encouraging.
While many speculate on what may or may not happen to Microsoft, VARs and MSPs will continue to forge ahead with their own unique business plans. Each organization will shape its own future and, with cloud and managed services in the mix, determine which of many platforms will provide the right balance of features and profitability for their operations. They, in turn, will support diverse organizations crossing a multitude of industries, from mom-and-pop grocery stores and local insurance agencies to large, regional hospitals and thriving manufacturing plants.
Some say that’s the point Ballmer lost sight of over the past few years; recognizing the importance of the channel within the SMB market, as well as the unique and varied needs of each VAR and MSP organization. When Microsoft built its cloud alternative to Google’s business tools, many solution providers felt like they were left out of the new business model – and the equation. Whether or not the company made the right decision with the reseller program for Office 365, the channel perception was not positive. That decision opened the door for other vendors to step in and recruit dissatisfied partners and, with Ballmer at the helm, he received the brunt of the blame. While the number of Microsoft partners may not have declined, the deal levels and numbers have surely taken a hit.
What lessons can solution providers, vendors and distributors learn from Ballmer’s tenure? Those who took fundamental management courses will likely remember the seven stages of the business lifecycle that includes the “seed, startup and growth” phases that Bill Gates handled so masterfully. Based on that philosophy, the handoff to Ballmer actually occurred early in the third period. Company revenue increased from $20 billion per year, when he assumed the role, to more than $70 billion last year, which by most measures of a CEO would classify his tenure as extremely successful. While no Bill Gates when it comes to inspiring the masses and getting positive press, his business savvy was instrumental in crafting and executing a solid corporate growth plan that worked well for most of company stakeholders.
When following the lifecycle model, the person selected to lead a company after the founder or innovator should be the consummate business professional. Where their predecessor designed products or assembled ideas, he or she should have strategic planning and management skills. While they may not be as popular to the press or the employees, they must have the ability to see the potential opportunities as well as the prospective challenges that lie ahead. Even if many criticize Microsoft and some of Ballmer’s decisions, he did provide the leadership and strategy the company needed at that point in time.
After Gates departure, the organization was in a situation similar to the period after Steve Jobs left Apple. The innovator was gone and many stockholders and industry observers wondered what was next. In Microsoft’s case, a business leader emerged who would stabilize the effects of losing the company’s long-time patriarch and lead the software-driven organization into the inevitable cloud revolution. Those who suggest stock prices during his thirteen-year watch were lackluster should look at other IT companies that made similar business model changes. Did they succeed at their mission and double their worth since 2000?
Ten years from now, Ballmer may continue to be the fall guy for channel angst, but if Microsoft continues to thrive, he’ll have done what stockholders asked him to do. The judgment over whether he was right or wrong in his approach to the partner program will continue to fuel many discussions between solution providers and other channel vendors for years to come.
While most industry experts suggest that Ballmer could have been more engaged at the VAR level, he has qualified employees who work closely with the reseller community and convey partner priorities to their executives. Of course every CEO should receive input from their valued constituents and consider that advice when making changes within their programs – especially those whose businesses are built around their products and services. If the management team loses sight of their needs, as well as those of their clients, the loyalty of its channel partners and the corresponding revenue will surely suffer.
Brian Sherman is founder of Tech Success Communications, specializing in editorial content and consulting for the IT channel. His previous roles include chief editor at Business Solutions magazine and senior director of industry alliances with Autotask. Contact Brian at Bsherman@techsuccesscommunications.com.
