Microsoft Responds to Growth in Services Market with a Skills-Certification Program for Partners

Editors’ Update, May 23, 2006 – Microsoft has changed the working name of the project discussed in this article, referred to as “Athena” at time of original publication, to “skills-shortage project”.

REDMOND, Wash., May 15, 2006 – Regardless of which platform companies base their enterprise infrastructure on, the need for additional IT services is on the rise. Increasing numbers of mobile workers, mounting security demands and the need for more flexible platforms are driving predictions of dramatic growth in the worldwide IT services market. At the same time, IT service providers are experiencing a “pervasive talent crunch” when trying to hire high-quality professionals in areas that require deep industry or technical expertise, according to the IDC analyst report “Worldwide IT Consulting 2006-2010 Forecast” (No. 35049). The March 2006 report, authored by Bo DiMuccio, IDC Consulting Services program manager, says this talent crunch is creating aggressive competition among service providers to hire and retain consulting talent, making it difficult for them to grow their businesses.

Microsoft’s enterprise-focused groups, such as the Enterprise and Partner Group (EPG) and Microsoft Services, are taking a number of steps to help Microsoft’s partners address this issue and take advantage of the anticipated growth in the IT services market. The company today announced the skills-shortage project, in which it will invest over US$30 million to drive more than 45,000 incremental new partner certifications to meet the growing demand for skilled Microsoft services professionals.

PressPass spoke with Rick Devenuti, senior vice president for Microsoft Services and IT, and Allison Watson, vice president of the Partner Sales and Marketing group at Microsoft, to learn more about the company’s investment in partner certification.

PressPass: Why is Microsoft investing so heavily in the skills-shortage project for Microsoft industry partners?

Rick Devenuti, Senior Vice President, Microsoft Services & IT

Devenuti: Microsoft is well positioned to be the platform of choice for much of the growth we anticipate in the services market. We’ve achieved a $9 billion increase in Server & Tools revenue in the past 10 years, which means our products are increasingly expanding into data centers and mission-critical infrastructures. The launch of Microsoft SQL Server 2005 has been a tremendous success, raising SQL Server revenue over 30 percent in the third fiscal quarter of 2006. In the next 12 to 18 months we will release a wide array of additional new products and updates, such as Microsoft Windows Vista, SharePoint Services technology and the “Windows Server “Longhorn,” Exchange Server 2007 and the 2007 Microsoft Office system that will further solidify our momentum in the enterprise. This success has also helped grow a very large services business in the Microsoft ecosystem.

Our goal is to maintain and even increase this momentum, and to work with our partners to help customers accelerate successful and productive adoptions of Microsoft technology. The skills-shortage project we’re announcing today is one of the steps we’re taking to ensure this. Other steps include building stronger relationships with our customers and partners, and growing the Microsoft Services and IT group to seed the market for our products.

Watson: Our partnering vision is that any one partner of any type, by partnering with Microsoft, can extend their market reach, reduce costs, increase profitability and deliver innovative solutions that help customers realize their full business potential. So when our partners tell us one of the biggest challenges they face is finding qualified professionals who can help them design, deliver and maintain their customers’ increasingly complex infrastructures, we have to address it. Microsoft is investing over $30 million in the skills-building certification program and intends to increase the base of services professionals who are certified in Microsoft technology by more than 45,000 certifications. It’s also important to note that this is not just a one-time investment. As the market continues to grow, we will continue to make investments accordingly to address the demand and position our partners to take advantage of the opportunity. This program represents significantly more investment and effort on Microsoft’s part – —a 100-percent increase over the company’s investment in partner technical certifications in the last year – to address the skills shortage and mobilize the industry so that Microsoft and our partners can deliver the very best for our mutual customers around the world.

PressPass: Will the program fund a particular type of certification, or certification on all levels?

Watson: The Channel Ready program will subsidize training across certification levels, including Technology Specialist, IT Professional and Professional Developer and Architect. In addition, we will expand the program over time to build a new level of certification to develop and validate skills for the most experienced business IT professionals. Our partners require a changing mix of skills to support new and rapidly evolving business models, and this in turn requires IT professionals to continually evolve their skills. To meet these needs we will ensure our partners have the right learning tools and certifications at every point in the product lifecycle. Microsoft is primarily targeting the entry-level and highest impact roles – we aim to certify over 45,000 new accreditations through this program.

PressPass: Besides having access to an increased number of skilled professionals, how will Microsoft partners benefit from the skills-shortage project?

Watson: The funding for the program centers primarily on subsidizing training and certification, so not only will it be easier for our partners worldwide to obtain technically skilled people who are professionally trained to deliver value to customers, but they’ll also be able to usher their employees through training and get them certified at a much lower cost.

As I mentioned earlier, this is a multi-year investment and, as the market grows, we will continue to make an investment to address the demand and position our partners to take advantage of the opportunity, so we strongly encourage our partners to take advantage of this opportunity – to engage in the additional training that’s available and get more of their employees certified.

PressPass: What other strategies is Microsoft using to ensure it creates opportunity for its partners?

Devenuti: Microsoft’s Enterprise Sales, Partner and Services groups are working together on implementing a number of strategies, which include building stronger relationships with our enterprise customers, fostering closer relationships with our partners, and investing in the Services and IT group as a catalyst for accelerating adoption and productive use of the Microsoft platform.

To strengthen our relationships with our enterprise customers, we’re focused on establishing a deep understanding of the uniqueness of each customer’s experience – their market, the industries they operate within and the business issues that drive their demand for IT products and services – so that Microsoft and our partners can deliver the right product offerings, solutions and services that best satisfy their needs. For example our account-planning process for enterprise customers will be led by the Enterprise Sales group and will include partners, through Partner Solutions Plans and Microsoft Services.

In addition, we are emphasizing two highly valuable offerings through Microsoft Services to build closer relationships with enterprise customers. Enterprise Strategy Consulting is a service in which a highly qualified individual leverages a broad set of proven tools, and acts as a member of the CIO’s extended team, accelerating adoption of Microsoft solutions by assessing business needs and operations to connect business strategy and IT directions. And Technical Account Managers, a role that comes with Premier Support, help optimize and manage existing installations. Their work can lead to new projects optimizing or operating the IT environment.

As the market for Enterprise services tied to the Microsoft platform grows, Microsoft Services and IT will continue to meet market demand and to seed the market with additional success stories that continue to build confidence, trust and loyalty for our platform.

PressPass: How will Microsoft’s involvement with customers in this way benefit partners?

Watson: The Enterprise Strategy Consulting and Premier Support offerings from Microsoft Services are distinctly different from the services provided for specific projects, so they will not be competitive with partner offerings. Instead, they will enhance and create added opportunity for partners. For example, the work done through Enterprise Strategy Consulting often leads to new projects for partners who are deploying technology in innovative ways. And the work done by Technical Account Managers can lead to new projects that involve partners optimizing or operating the IT environment.

When we talk with partners about these roles, they see the relationship between our building closer ties to customers and increasing customer satisfaction. Building stronger relationships in this way will help our customers develop more confidence, in Microsoft, the Microsoft platform and our partner ecosystem, which in turn means more business for our partners.

PressPass: How will Microsoft Services and IT act as a catalyst for accelerating adoption of the Microsoft platform?

Devenuti: In addition to providing the Premier and Enterprise Strategy Consulting offerings, Microsoft Services will engage in a limited number of deployments that target high-leverage deals – early adopters and companies making big bets on our platform – to create highly visible success stories. Microsoft Services is in the first year of a three-year plan to execute this strategy, and we’re committed to ensuring our ability to meet these goals.

Microsoft Services approach has always been a partner-led strategy – the vast majority of services opportunities for the Microsoft platform are delivered and will continue to be delivered by our partners, with Microsoft Services playing a catalyst role in offering “proof of concept” with new technology and big-bet implementations that leverage more opportunities for partners to serve our mutual customers. It’s important that partners are prepared to staff this increased demand for Microsoft-related services.

PressPass: How will Microsoft Services build closer relationships with partners?

Devenuti: It almost goes without saying that Microsoft partners play a super-critical role in Microsoft’s success. Almost all of our license revenue and the revenue our customers dedicate to services filters through our partners. They drive the scale, deployment and adoption of our products and innovate on top of Microsoft’s offerings.

As we drill deeper to learn more about our customers’ unique experiences, we also listen to what our partners want and need. In talking with partners and from information gleaned from Microsoft’s partner surveys, we know partners value growth and profitability for their businesses, a Microsoft that is trustworthy and predictable, and a services organization that is committed to co-engagement and partner readiness.

We are taking many steps to continue to increase the level of satisfaction our partners experience in having these needs met: We’re investing in systems to help drive tighter integration between partners and Microsoft. We are driving tighter alignment of our partner solution plans into our account plans. We are investing in increasing our partner account management resources. And we are putting rigorous controls in place to ensure our service delivery is predictable and of value to our partners and customers.

Watson: The skills-shortage project is just one example of how Microsoft is extending itself to partners so that together we can help customers accelerate successful adoptions of Microsoft technology. We want to help make it easier for our partners to find qualified professionals, who can help them design, deliver and maintain their customers’ infrastructures, as well as make it more affordable for them to help their employees get certified.

By working to grow opportunities for the partner ecosystem, seed the market by accelerating adoption of Microsoft products, and create opportunities for co-engagement and sharing of intellectual capital and best practices, Microsoft Services is working hard to satisfy our partners.

The potential to drive growth in the enterprise has never been better, so Microsoft and its partners have a tremendous opportunity ahead. Our success is dependent on our ability to all work together to deliver the best services and programs possible to our mutual customers.

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