What’s Microsoft Partner Network membership worth?

 What’s Microsoft Partner Network membership worth?
What’s Microsoft Partner Network membership worth? Microsoft itself was curious, so hired IDC to do a white paper to find out. The net dollar figure — $320,000 for a 50 person Microsoft partner — might seem high to some, but IDC thinks that figure is actually quite conservative.”Microsoft wanted to understand how much the partners can get out of the MPN relationship,” said Mira V Perry, Senior Analyst, IDC Software Channels, and one of the IDC analysts who put the white paper together. “They recognized how much partners put into it, and they wanted a better understanding if, since they are being asked to jump through this many hoops, are they getting enough return on that investment?”

IDC’s answer appears to be a resounding yes. Their analysis concluded that there is $320,000 in value directly attributable to partner use of the benefits Microsoft provides through MPN. That number is based on a 50 person organization, with approximately $5-10 million in revenue, and two to five competencies.

That number is also probably low, Perry said.

“We do think the $320,000 number is conservative,” Perry said. “We think there is significantly more partners can get out of it, and that this number could be a drop in the bucket for some partners.” Some items of value were not included in the calculations at all.

“For instance, we did not track the value of leads provided,” Perry said. “Leads are important to partners, and they have value, but they are too variable and too speculative to quantify properly.”

Perry said the IDC study authors began by talking with the Microsoft execs who supervised each of the benefit areas, to get a good idea of what the benefit was about.

“This let us really drill down with the partners when we talked to them,” Perry said. “Then we did desk research, comparative costing, to find what it would cost to do things on their own. For example, what would the cost be if Microsoft didn’t provide a PAM (Personal Account Manager).

“We also determined if benefits would pass a ‘Partner Sniff Test’ — if they would do them at all if Microsoft didn’t provide them,” Perry added. “While we came up with very high potential values for some areas, like training, we found the partner wouldn’t spend that much money on their own, and we took that into account. The training programs provide six figures of potential value, but a partner wouldn’t invest that much on their own in training.”

The most valuable single MPN benefit was Internal-Use-Rights (IUR) Software, in which MPN members with a subscription or a Microsoft competency have access to a suite of Microsoft software licenses for running their businesses, development and testing, demos and internal employee training. For a typical 50 person organization, IDC estimated the value of the IUR software to be at least $125,000.

“It was the most utilized and the most valued by the partners of all the benefits,” Perry said.

Microsoft’s PAMs were also highly valued, with IDC calculating the value solely on the proportionate cost to Microsoft of $15,000 per PAM per partner.

“We could easily have doubled that value, because partners told us that just having a PAM at the table with a customer could close a deal, but we didn’t attach a value to that,” Perry said. “A partner simply can’t replicate the value of that resource.”

IDC calculated the value of Microsoft Developer Network (MSDN) licenses at $83,000 for that 50 person firm, although partners who are also ISVs and Web Developers might see that value rise to the high hundreds of thousands of dollars.

“The MSDN licenses are broadly used and very well regarded,” Perry said. “We were speaking to people on the business side and it was the technical folks who really used them, but the business side people knew the value they represented to their organization.”

Another partner enablement resource, the Partner Learning Center, which provides free and low-cost technical, marketing and business training, IDC valued at $37,500. Perry acknowledged that calculating value here was tricky.

“We looked at alternatives to this, including courses by other organizations, but also recognized that partners could just buy a book to learn the content,” she said.

The Pinpoint Online Marketplace, a replacement for the old Solution Finder, is one resource that IDC thought definitely could be utilized more than it is.

“There’s a lot of potential in that,” Perry said. “We did some research on other vendors’ marketplaces last year, and we found the value partners were getting from those was astronomical. With Pinpoint, some of the partners set up profiles and then forgot about them. Some invested a significant amount of time to develop complete solution profiles, reflecting the fact that it’s a marketing tool and needs to be used.”

Perry said that on the Microsoft side, there are still some glitches with Pinpoint the partners are seeing that Microsoft needs to address, but on the whole, IDC thinks this is an area where partners can see considerably more success.

IDC valued the Partner Marketing Center, and its collections of marketing tools, resources and campaigns, at $11,000 for casual users.

“While some larger partners found it useful, others think it’s for smaller partners with no marketing department — but there are still hidden resources in there they could be tapping,” Perry said. “There are tremendous resources in there. Understanding what competitors are doing when you talk to a competitor is huge. The challenge with it for more specialized partners who are targeting a particular industry is that less of that type of more specialized content is available.”

Microsoft offers many programs to help partners sell, including Business Investment Funds (BIF), the Demo Showcase, the Solution Incentives Program (SIP), Online Incentives and Marketing Development Funds. But they were hard to quantify for the study.

“The challenge in determining value is that they are all over the map for partners,” Perry said. “Microsoft doesn’t cap many of them, so there is great range in what partners in interviews told us they were receiving. They are also the hardest to compare against competitive vendor offerings, because they change so quickly, like with a new product launch, but Microsoft is around the top of vendors that we looked at it in terms of these programs.”

Perry said that awareness of these programs was not the problem that IDC thought it might be.

“The biggest takeaway here was simply time available,” she said. “The issue was whether it was worth the partner’s time to apply for some of these benefits, and the easier Microsoft can make it to take advantage of benefits, the better. That’s why it’s also important for the partner to put someone on the Microsoft relationship with time to look for hidden gems, who has the bandwidth to do this — and that means not the CEO, which is what many partners do.”

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