Microsoft raises Dynamics 365 Cloud Business Apps competency requirements, seeking partner differentiation

Microsoft recently introduced the Cloud Business Applications competency for partners that specialize in deploying and managing Dynamics 365 solutions.

This new competency combines the traditional Dynamics CRM and ERP apps into one competency and increases the number of technicians that need to pass the certifications.

To achieve the new Silver competency for the Enterprise Customer Engagement and Enterprise Operations options, partners must have five technicians pass three exams (the exams are different for each option). To achieve Gold competency for the Enterprise Customer Engagement and Enterprise Operations options, partners are required to have 15 technicians pass three exams (the exams are different for each option).

"There is a high bar for this competency, especially for Gold, based on feedback from customers about what they expect from partners that deliver solutions of this kind," according to a Microsoft spokesperson. "As always, Microsoft gives partners a generous runway to meet any significant changes to requirements which may impact their partner status."

However, Microsoft explained, there have been no changes to the requirements for the Silver (two techs/two exams) and Gold (four techs/two exams) Cloud Customer Relationship Management competencies for the last 18 months. Newer exam versions are a standard practice for all competencies.

All the exam requirements for the Silver and Gold Enterprise Resource Planning competencies were recently removed, so requirements for this competency are less strenuous than in the past. Partners must meet revenue performance requirements and pay the fee, according to the spokesperson.

Microsoft's love, measured in competencies

The old CRM (on-premises) competency requirements expired in January and traditional partners will not be able to renew their competencies as only cloud revenue is recognized, according to Cyril Courrée, product manager, SherWeb, a Microsoft partner with a broad range of services, including Dynamics 365 solutions. The company is also involved in Microsoft's Cloud Solution Provider (CSP) program as an Indirect CSP.

"And if they lose their competencies, they will lose all the benefits associated with those competencies and they will have almost no contact with Microsoft - because love is based on competency," he says. Sherweb has almost all the possible competencies and, as a result, he says, "we're getting a lot of love."

Because of the increase in the requirements for the number of employees required to pass the exams for Silver and Gold Cloud Business Applications competencies, some partners will be challenged to renew their current competencies or move from Silver to Gold-a result that Microsoft may have intended, according to some partners.

"The changes, especially to the Gold competency, significantly affect partners that aren't under us as an Indirect CSP or in the Master VAR program because the barrier to entry is going to be lot higher," says Scott May, director of channel development at Velosio, a Gold Cloud Platform, Gold ERP, and Gold CRM partner. "There's going to be a significant impact in the time that it's going to take to go through and get those certifications - in the resources [and] the experience that you're going to need within your own organization."

The jump to gold is not an incremental jump anymore, it's huge, says Dave Wallen, vice-president of channel and product marketing at Velosio. And it's a stretch for a small partner to get to silver.

"Let's say you're a CRM partner or sales partner with seven or eight [consultants] . . . the demand is far outstripping the supply," he says. "So for a small partner to grow from a Silver to Gold means attracting more talent, and they're competing with [big firms like] Hitachi and Accenture, so they have to bid for that talent or train their own, and that's a really expensive proposition."

May says that to meet the new competency requirements, companies may have to leverage the indirect partner model and work with organizations that have the resources and capabilities to support them on their digital transformation journeys.

"So we're uniquely positioned to be able to support partners in that fashion, and I think that's what Microsoft's looking for in making this move-to say if you can't go through and meet these requirements with the Silver and the Gold, then we've got an indirect partner structure out there of partners that can go through and help you with that."

Aiming for fewer, larger partners

The requirements partners have to meet to achieve Gold or Silver competencies really don't tell customers how effectively partners implement Dynamics AX or Dynamics 365-not even by a stretch, says Jesper Kehlet, CEO, Curogens Inc., a Gold Microsoft ERP partner.

"This is purely a marketing thing for Microsoft," he says. "It's about putting partners into categories that allows Microsoft to say, ‘unless you're Gold you cannot become a partner seller or do co-sell with us.' Microsoft needs a way to differentiate between the partners that have the size ... and the skillset to do that and [the partners that do not]. I understand why Microsoft has to do this, because if everybody becomes Gold that sort of dilutes the whole purpose of having a Silver and a Gold. I'm not the person to drink the Microsoft Kool-Aid . . . but I think this is fine."

Kehlet's opinion is that Microsoft is panicking a bit because it may have realized that it has too many Silver and Gold partners. The concern is nothing new, as Microsoft has worked for years to find different ways to keep competency levels from becoming over-saturated and irrelevant.

"Microsoft has had a desire for a while to have fewer and larger partners," Kehlet says. "I think that Microsoft may also be concerned about [the fact that these partners] are really just pulling in consultant revenue by helping customers with Dynamics 365 but not reselling anything or maintaining and supporting them from a Microsoft perspective. So why should Microsoft make them Silver partners? I think that makes sense. So basically they're upping the ante to weed out the partners that are not truly working toward selling Microsoft products and services, but are selling their own products and services."

Courrée agrees that currently there are too many Gold partners but that will likely change with the change in requirements.

"Now you need 15 guys [to pass the exams]-before it was four techs and $300,000 in revenue and now it's 15 techs and $300,000," he says. "I think with these new requirements Microsoft wants to be sure that partners do cloud. And I think because it's now harder to achieve the Cloud Business Applications competencies, they will have more value. I think it will make sense because there are too many Silver and too many Gold partners. Silver is not that big of a deal, but the Gold will be shinier now, and only the biggest players will be Gold."

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