Microsoft has urged its partners to give their commission structures a cloud-fuelled makeover or risk putting their financial future in jeopardy.
Speaking to CRN at Microsoft's Worldwide Partner Conference, the vendor's channel chief Phil Sorgen admitted transforming a business model is tough but said cloud sales should be encouraged through juicy commission structures.
"The world is changing and you have to change with it and chart your own course," he said. "Part of charting your own course is being deliberate about where you want to go. You won't get there if you don't incent your people and establish your KPIs. If your sellers are not aligned to your future, your business and your transformation are at risk. Transformation is hard – nobody said it wasn't."
The move to the cloud has prompted questions in the channel about how best to keep up with modern technology and business models while keeping key sales staff happy to prevent them moving to rivals.
Sorgen (pictured) said partners should not worry about staff moving to competitors for hefty on-premise commission plans and said moving to the cloud will be a more lucrative option for partners in the long run.
"I don't think [partners'] biggest concern is losing a seller to another reseller who may be farther behind in the cloud journey, because that [rival] reseller is even more at risk," he said. "[Partners] need to balance as much as they can the P&L requirements they need to achieve with the future mix of products they want to sell and make sure they are compensating accordingly. I can't emphasise enough that internal compensation is a core element of transformation and we've had to do that ourselves too."
Hold the phone
Last week, Microsoft announced almost 8,000 staff will be axed, most of whom will come from its phone division.
During the keynote address to partners, Windows Phone featured heavily, and execs enthusiastically pushed the hardware.
When asked how partners are expected to invest in and push Windows Phone devices to customers when Microsoft is cutting its resources in the area, Sorgen said:
"On the phone itself, we have been clear we are committed to phone and we have some exciting, feature-rich phones coming out this year. In that sense we continue to move ahead.
"We have not said we are not investing in [Windows Phone]. The point is, by integrating and being One Microsoft we can do things in a different way than we had previously done. This does not equal not investing. We are continuing to be invested in phone as an important component of our device family."
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