Moving to an offering model with more repeatable IP


 

By Kajal Mukherjee, Cloud Solutions Architect and Chris Kahrs, Technology Solutions Professional

System Integrators make up a large part of the Microsoft partner community. These companies focus on various services that involve Microsoft products and technologies to build solutions that meet customer needs. System Integrators with technical expertise in the Microsoft product suite have primarily focused on technology related services. These companies have excelled with their strong technical team capabilities – their technical specialists are experts in many Microsoft and other technology solutions.

Traditionally, this has been an excellent business model for partners and has provided exceptional value to customers. The extended technical team supports specific project needs with the value of the partner being determined primarily by the strength of their technical team and project delivery costs. These partners don’t focus on building repeatable IP. Every project is a new delivery opportunity starting from scratch. It is, however, difficult for partners to differentiate their value to customers following this business model. The customer also assumes the entire risk of project failure as the partner is only responsible for technical expertise of the resources.

Drivers for change

Successful cost management through efficient project delivery has helped many partners build a strong business model. But a partner’s business growth through cost reduction alone can’t continue indefinitely. Partners need to provide business value to customers by offering solutions that help customers increase their revenues.

This business model offers strong growth opportunities. There is a clear difference between a partner solution offering and a software product. A solution offering is not necessarily a fully baked product. The strength of a systems integrator is its ability to build customer specific solutions. However, it does not always mean starting from scratch.

Often, a partner builds vast knowledge about an industry or specific business process through solution delivery to many customers. An offering is a quasi-built service for a vertical industry or a horizontal business process where the partner has gained knowledge through the delivery of these solutions. An offering consists of various assets including presentation and marketing materials, technical assets (data model, code snippets, ETL mapping, scripts, etc.), high-level design documents, and more. Assets must be copyrighted and owned by the partner and may not contain any material or data that may be considered customer assets. Microsoft does not assume any liability for solution offerings built by the partner community.

An offering can help an IT services focused partner on having a conversation with business stakeholders based on the value of the offering. There are many Microsoft partners who have expertise in various technologies, such as Microsoft Dynamics 365, Microsoft Power BI, and extract, transform, load process (ETL). It is not easy for a partner to differentiate their value with technical expertise alone. However, it is relatively easy for the same partner to have a conversation with business users regarding call center analytics offerings built using Dynamics 365, ETL, and Power BI. The partner value proposition is considered on top line revenue terms instead of IT bottom line cost reduction alone.

How to get started

Successful partners crossing this divide often combine these strategies:

  1. Continue doing Time and Material work. Solution offerings are a process, and continuing on a high growth path helps fund the transition to a more vertical approach.
  2. Rely on the expertise they have in house to build their first few offerings. If they have done projects that require similar expertise as solution offerings they are looking to build, they gain valuable experience and knowledge of the offering and vertical.

Offerings are also very appealing to customers as they provide the opportunity to engage with partners who have experience in building solutions focused on growth. It significantly reduces the risk associated with project delivery and shortens the overall project delivery timeline. Also, offerings help partners engage Microsoft sales teams to reach customers outside of their own sales territory.

Some of the offerings developed by Microsoft system integration partners have been successful in various industries like Retail/CPG, Manufacturing, Life Science, and Financial Services. Many of these offerings are available through AppSource. If you’re interested in offering centric solutions using Microsoft Azure data and analytics capabilities, consider additional services such as hosting solutions on Azure on behalf of customers through the Cloud Solution Provider program.

Engage your local partner teams and work with them to learn more about how solution offerings can help grow your business for many years to come.

Data Platform, Intelligence, and Analytics Partner Community

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