• Illustration: MCS Service Lines

Placing technical consultants with sales teams and creating prepackaged consulting offerings will align Microsoft Consulting Services (MCS) more closely with the company's field sales force. The changes will make better commercial use of knowledge gained from consulting efforts, but the consulting offerings could be a mixed blessing for partners—they could commoditize high-end consulting and integration on one hand, but could also expand consulting and integration opportunities to many more partners. In either case, partners will have a new opportunity to make their views known—for the first time, MCS will measure partner satisfaction with its consulting services.

MCS Priorities

Microsoft has been careful in defining the roles that MCS plays because the consulting unit has often been a lightning rod for complaints from partners who view it as competition to their own consulting efforts.

MCS has performed the following roles:

• Demonstrating how new technologies can help customers and "moving the market" with prominent wins intended to convince customers that Microsoft products are safe to employ and offer tangible business advantages
• Transferring technical skills and knowledge to partners, who can serve many more customers than Microsoft's force of about 3,000 consultants.
• Providing feedback to product groups based on MCS's experiences in developing solutions for customers
• Acting as prime consultants in projects when customers demand it.

New Focus on Sales

At the Worldwide Partner conference in July 2007, Microsoft signaled several significant changes that will align MCS more closely with Microsoft's sales efforts. The changes mark the influence of Maria Martinez, appointed corporate vice president for services in Jan. 2007, and also reflect the sales and metrics focus of her boss, Chief Operating Office Kevin Turner.

The standard metrics for a consulting organization, billable hours and utilization (the proportion of consultant hours that can be billed to customers), map poorly to Microsoft's main business, which is selling software. Two of the changes—rotating MCS software architects into the field sales force and developing new "service lines" that package the company's expertise into repeatable consulting and deployment engagements—will change that.

Architects in the Field

While Microsoft's field sales force has access to technical experts, many are product specialists who are brought into the sales process after the customer has indicated an interest in specific products or solutions that use them. MCS consultants and software architects can offer technical perspective and customer guidance at an earlier stage of the sales cycle, possibly leading to larger sales, but their high cost and their focus on billable hours made it difficult to employ them in presales efforts.

MCS will now begin to rotate up to 100 of its consultants into field offices for several months at a time to assist sales teams. Customer wins will replace billable hours as the main compensation metric of these consultants, and customers will not be charged for their guidance.

The consultants will focus on high-value engagements, complex opportunities, and accounts where Microsoft is facing competitive pressures. The field engagements will also give MCS consultants more exposure to the problems that the field sales force faces.

Service Line Offerings

In the past, Microsoft's services organization has focused on three primary IT areas:

• Architecture and planning
• Custom consulting
• Technical support and systems health.

Starting in Microsoft's 2008 fiscal year, which began July 1, 2007, it added delivery of prepackaged consulting services to the mix.

The prepackaged services are segmented into five new MCS service lines that are aligned closely with product groups and major sales initiatives, such as the company's Infrastructure Optimization (IO) model. (For a list of the service lines, see the illustration "MCS Service Lines".) For example, in the Business Productivity Infrastructure Optimization service line, specific offerings cover business intelligence, collaboration, enterprise content management, enterprise search, and unified communications.

The service line offerings are aimed at a common consulting problem: complex consulting engagements give consultants considerable insight into how to integrate products and optimize solutions, but only for the specific consultants involved.

By capturing and repackaging what its consultants have learned, MCS can offer consulting engagements that deliver more value for less money. In Martinez's words, MCS has traditionally "put [consultants] on the bench" to support customers reactively, but in the future it wants to be "more intentional and much more predictable."

Customers who purchase a service line offering get help from MCS in setting up a prototype that they can use as a test bed and training facility. One early offering, the Enterprise Search Decision Accelerator, includes the following services:

• Installation and configuration of SharePoint Server 2007 in a laboratory environment
• Deployment of major enterprise search features in SharePoint, such as setting up site collections, configuring authorization and authentication for users, indexing sites, creating a search site for users, and configuring search Web Parts
• Assistance in fine-tuning the relevance of search results
• Installation of additional protocol handlers and filters, which help SharePoint index more types of resources.

Partner Involvement

Martinez promised partners at the Worldwide Partner Conference that Microsoft would be a "key enabler" in helping partners take advantage of what the company sees as a growing market for services on the Microsoft platform. However, partner involvement in the new service line offerings will be limited to watching Microsoft deliver them for much of 2007 and 2008: few of the offerings are ready for market, and Microsoft wants to refine them before handing them over to partners.

Partners already benefit from co-engagements with MCS, where they can learn from MCS's experience, but Martinez admits that "we need to formalize this process a lot better." During its 2008 fiscal year Microsoft will run pilots with selected partners, but a formal program for transferring the skills required for delivering service line offerings to end customers will not be in place until the following year.

Liam Foley, who manages MCS's partner advisory council, says, "We want to be at the tip of the arrow, but once we've got something worth sharing and we've hardened it, we want to get it out to partners." Foley says partners will be required to meet specific requirements before they can deliver service line offerings, and although the offerings will not be free, neither does Microsoft intend to profit directly from the service line offerings. Instead, the company hopes that the availability of such offerings from both Microsoft and partners will aid sales of Microsoft products.

Although the service line offerings are a significant extension to what MCS currently offers, Foley sees them as the evolution of the company's long-term commitment to transfer knowledge to partners.

For partners, the service line offerings represent a mixed blessing. Gaining the benefits of MCS's expertise will be valuable and can reduce costs for partners and customers. At the same time, if the service line offerings turn some complex (and therefore profitable for the partners involved) consulting expertise into a commodity, the number of partners who are qualified for such engagements could multiply, creating more competition. Large consulting firms could take the biggest hit; smaller firms might benefit.

Microsoft explains that it expects the market for consulting and integration services on Microsoft platforms to expand significantly in coming years. Gartner estimates the total market for software services to rise from about US$326 billion in 2007 to US$389 billion in 2010, an increase of about 20%. Microsoft itself accounts for less than 2% of those revenues, leaving plenty of room for all classes of partners to grow.

Partners are also getting better tools for feedback to MCS, which could reduce the historical tension between partners and MCS. In addition to the partner advisory council that was started in 2007, Martinez told the partner conference (to much applause) that MCS's 2008 performance scorecard, on which bonuses and promotions are based, will include for the first time a partner satisfaction metric. Partners will be polled to determine their satisfaction with Microsoft, and if the right questions get asked, the answers could help Microsoft strike the appropriate balance between competing with partners for business and opening up new business opportunities for everyone.

Resources

Martinez's speech at the Worldwide Partner Conference is transcribed at www.microsoft.com/Presspass/exec/mariama/07122007WPCMariaMartinez.mspx.

A directory of available and planned service line offerings is at www.microsoft.com/services/Microsoftservices/srv_techconsulting.mspx.

A datasheet describing the Enterprise Search Decision Accelerator in detail can be downloaded from www.microsoft.com/DownLoads/details.aspx?familyid=501069AE-9D88-467D-A80B-DB84A2D41D95.

Infrastructure Optimization is described in "Optimization Model Structures Sales Efforts" on page 31 of the Aug. 2007 Update.