Microsoft Canada to adopt a pay for performance model

So the sky isn't falling after all; Microsoft Canada will not be selling direct, according to sources with knowledge of the situation.

A few week's ago channel partners complained to CDN – Computer Dealer News that Microsoft Canada would be taking top tier accounts direct. I never thought this would happen because it's simply not in Microsoft's culture or DNA … whatever you want to call it.

Microsoft is going to change things up in the channel. They have developed a new model that has been described to me as a pay for performance model. I do not know if Microsoft will use “pay for performance” to brand the new model or not. This new model will impact Large Account Resellers or LARs the most. What Microsoft Canada intends to do is move the LAR rebates to four new new areas: Major Accounts, Corporate Accounts, Solutions and Software Asset Management or SAM Services. 

I have been told that Microsoft Canada held a secret meeting on September the 9th with several channel partners to explain the new model. In that meeting they said that existing agreements will be grandfathered until they expire. The new program changes are fixed but Microsoft will allow some room for discussion on some fees. Microsoft Canada wants to lock in resellers under this program by April of 2011. They will be using the time inbetween to further bake the pay for performance program.

Many LARs may not like this new model, but one smaller reseller told me that he is looking forward to this model for awhile now. He said that there have been times when his team has worked with a customer for several months on a solution only to lose out on the software sale to a LAR simply because they had a better price.

Lets hope pay for performance can eliminate these situations.

Two quick hits before I go. Speaking of Microsoft Canada they have hired PR practitioner Chantelle Bernard. Bernard worked for Microsoft's communications agency in Toronto High Road. Her role at Microsoft Canada still has not been defined, but she will be working on various projects at the software maker. CDN wishes Bernard the very best.

And, Cisco VP Tony Bates will be leaving the networking giant to become the new CEO of Skype.


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Jim Love, Chief Content Officer, IT World Canada
Paolo Del Nibletto
Paolo Del Nibletto
Editor of Computer Dealer News, covering Canada's IT channel community.

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