Bechtle AG & The Microsoft Partner Ecosystem | In Practise

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Bechtle AG & The Microsoft Partner Ecosystem

Former Director at Bechtle AG

Why is this interview interesting?

  • History of European Microsoft Partner Ecosystem
  • How the reseller / OEM relationship is changing with the shift to cloud
  • Power of scale for resellers
  • Margin pressure for resellers
  • How resellers add value to enterprise customers in a cloud vs on-prem environment
  • Changes in the cash flow profile for resellers

Executive Bio

Ronald Scherpenisse

Former Director at Bechtle AG

Ronald has nearly 30 years of experience across technology OEM’s, resellers, and service providers. He started his career with 16 years at DEC before moving to Microsoft in 2000 to build out the partner ecosystem throughout Europe. Ron was responsible for building the Microsoft consulting service for the enterprise market which included choosing and training resellers. He then moved to Bechtle AG, a German Microsoft reseller, where he was responsible for the go-to-market strategy and running the Cloud Solutions practice. Ron also has experience working at Snow Software, a software asset manager that competes with resellers.Read more

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Interview Transcript

Disclaimer: This interview is for informational purposes only and should not be relied upon as a basis for investment decisions. In Practise is an independent publisher and all opinions expressed by guests are solely their own opinions and do not reflect the opinion of In Practise.

Ronald, can you give us a short introduction to your background please?

My background started years ago in a big American technology company called Digital Equipment Corporation which had 120,000 employees at the time. My first job was in IT doing network management and design. I joined in the so-called early days of technology, so I grew with the company and became increasingly business and technology savvy during my stay at DEC. At the time I left, DEC was bought by Compaq. These guys who built clone computers suddenly bought a company with a large history of engineering and set of capabilities and a completely different DNA. Due to these changes, I left in 2000 and moved over to Microsoft.

What was your role at Microsoft?

At that point in time, Microsoft was almost only known to the end user with Excel and Word, but not that familiar with the enterprise market, style and customers. Their enterprise customers only bought Office products. I was asked to build the strategy for a consulting practice within Microsoft Consulting Services aimed at the enterprise market.

My colleague, who incidentally now works at Google, built the partner side of the ecosystem and I built the enterprise customer side. We developed stories and propositions for how Microsoft could penetrate that market and customer space.

How did Microsoft look at the partner network in the early 2000s?

The partner network was like it still is today; an ecosystem to build volume in a market without investing a lot of money or by doing everything yourself. You need to scale up and one way of doing that is by building a channel of partners who are responsible for every piece of the channel’s specific activities, adding value and earning money. My first role was at KPN, an incumbent telco company, that still exists in the Dutch market. At that point in time, there was no competition because the incumbent was the only place to get telco, and I helped in several projects to make IT cheaper.

They did their first outsourcing activity with Atos. Although the ecosystem was and still is important, it had changed dramatically. Back in 2000, most enterprise customers bought software or software licenses and now we don't own software in that way, we only use it. The channel needs to adapt over time and move from selling assets and ownership to selling access only and everything in between.

I saw contractual models change the way the business was impacted, both at Microsoft and more so at these partners. A sustainable business model required dramatic and frequent change. The successful Microsoft partners were those who stepped up and made change happen in their company, disrupting sales in their traditional business model.

In the early 2000s how would Microsoft choose a European reseller?

We embarked on an interesting initiative with the Rotterdam Business School to identify the network of partners working on technology and the ties between them. One finding was, if you identified a partner with its own smaller partners, in most cases they were connected to the bigger partner. If you could acquire this bigger partner from an ecosystem perspective then you could simultaneously develop strong business ties with 10 others sitting downstream.

An example of this is Avanade, which was a combination of Accenture and Microsoft. At first, this was exclusively a new Microsoft partner. Back then you had partners not only related to one brand, but most cases were only related to IBM and/or Microsoft and many other parties. Owning a channel where you have more control over the channel from a success point helps with creating your own business, because if you want to grow with partners, then you need to add value and help these partners grow. For example, from a resource perspective, could the partners grow fast enough with acquiring talent? One of my projects was to help the partners acquire sufficient talent, because without it the ecosystem could not grow.

Is employee talent the biggest bottle neck for resellers to grow and adapt?

Back then it was more product and technology focused, whereas now it is talent based. I think the stuff is now there in size, capacity and change and we call this cloud. But the people who are able to use this technology and make a use case, that’s where the creativity still is and can only be done – at least in the coming years – with people.

In your university project, how did you choose European resellers?

The ability of these partners to build on and use the Microsoft technologies to build new solutions and fill gaps in the Microsoft versions was key.

Microsoft would fill the gap themselves in a new version of the product so successful partners would need to constantly find gaps to fill. This was a successful model for several Dutch partners who were able to do that. In the old days, the ISV (independent software vendor) would be able to do this, build for three years and earn money for 10 years, but now that is not possible because the product changes every two months. You saw the impact which COVID had on the success of Teams and the like and the innovation speed of these products.

Resellers are almost like an extended R&D or technical team for the OEM.

Yes; every user is a sensor and the sensory data is used to understand how the product should be used in unexpected ways, then fed to the original designers and thinkers who need to adapt and change. Our servers are no longer used in the ways we expected or considered valuable enough for people to pay money for them, largely due to the cloud. You need to adapt by understanding how your products or services are used in real life.

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Bechtle AG & The Microsoft Partner Ecosystem

May 18, 2021

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