Several corporate users this week said a new sales strategy being implemented by Microsoft Corp. is the right approach if the software vendor wants a better chance of winning customers at the enterprise level.
Under the plan, which was introduced internally on July 1 and detailed last weekend at Microsoft’s Fusion 2001 partner conference in Anaheim, Calif., the company’s sales force will focus on selling customized packages of its products and services to large corporate users. To help put those bundles together, Microsoft is assigning dedicated account-management teams responsible for coordinating all of its contacts with individual customers.
If executed properly, users and analysts said, those kinds of changes could be a step forward for Microsoft compared with its previous sales approach, which was geared more to individual products and didn’t give customers a single point of contact who would promise to become intimately familiar with their specific business needs.
“People come in here and they talk to us about products, but we’re more interested in solutions – how can the software provide more meaningful functionality and solve a specific problem?” said Jerry Miller, CIO at Sears, Roebuck and Co. in Hoffman Estates, Ill. “We’re constantly pushing back on our vendors to understand our business so that they can bring solutions to us.”
For instance, Miller said, Microsoft has talked to Sears about products that could fit into the retailer’s point-of-sale applications. “OK, but what are they going to solve for us?” he asked. It remains to be seen whether the new strategy will make Miller more receptive to Microsoft remains. “Many times, we do not think of Microsoft when we probably should because we just don’t think they have products that can scale to the size of Sears,” he said.
“I think this is always dependent on execution, but as a strategy, it makes a lot of sense,” said David Annis, group senior vice-president and CIO at The Hartford Financial Services Group Inc. in Hartford, Conn. Annis noted that Microsoft is developing more products targeted at corporate users and that it’s trying to expand its position in enterprise data centers requiring larger applications. “And our expectation would be integrated sales, service and support,” Annis said.
The new approach addresses one of the biggest problems Microsoft has faced when trying to sell into the corporate back office, said Rob Enderle, an analyst at Cambridge, Mass.-based Giga Information Group Inc. who advised the software maker on the sales issue. “I think they should have done it years ago,” he said. “This is something that some of the more traditional firms like IBM know and have built into their process for decades.”
Microsoft’s focus on building a relationship and selling the “whole kit bag” of products and services makes sense, agreed Tom Bittman, an analyst at Gartner Inc. in Stamford, Connecticut. “Let’s see how they execute,” he said, adding that he has been impressed by the “real changes” Microsoft has made during the past year where the enterprise is concerned.
Charles Stevens, vice-president of Microsoft’s enterprise and partner group, said at the Fusion 2001 conference that the company would initially concentrate on making the changes with its top 2,000 corporate accounts. Account managers equipped with more dedicated resources than in the past will help users plan business projects and make sure the right specialists are brought in to work on technical road maps, architecture and software deployment, he said.
Microsoft developed the new approach after hearing from focus groups of CIOs and IT managers that it “was just too hard to work with” the company, Stevens said. The concept was tested out in a pilot program earlier this year and is now being implemented in the United States and other countries, although Stevens said it could take another 12 months to complete the process.
Another key change is that Microsoft will target more sales pitches at business decision-makers, such as CEOs, chief financial officers (CFOs) or chief operating officers (COOs), in addition to IT departments, Stevens said. “But the majority is still with IT, and much of it is working with both together,” he added.
For clothing retailer Gap Inc. in San Francisco, Microsoft’s new approach has already worked well. High-level personnel from each organization have been in contact, “and this helps educate Gap management and enables [us] to get visibility at senior levels at Microsoft,” said CIO Ken Harris.
But Annis and Miller stressed that IT must remain a big part of the picture. Microsoft should talk to both IT and business executives “when there’s a meaningful reason to do so,” Annis said. “[But] if this means going around the information technology providers to get to the business leaders, I think it’s a bad idea.”
Miller said Microsoft is “not going to get very far” if it tries selling to business managers at Sears. “Software decisions are made by the IT organization,” he said. “We make those decisions in concert with the business, but we also have to look at how the software’s going to interface with all the other applications we have here. That’s why the final say for any software selection is IT’s responsibility.”
Microsoft Canada, in Mississauga, Ont., can be reached at http://www.microsoft.ca.
