Microsoft Announces Update to Dynamics Reseller Incentive Structure

Microsoft today announced significant changes coming to its sales incentives for Microsoft Dynamics partners, with an increased focus on growing sales of licenses and maintenance, along with more differentiated incentives for those partners who out-perform and under-perform. 

"We are raising the bar," says Jeff Edwards, Director of Channel Strategy for Microsoft Business Solutions. "The goal is to motivate partners by marketing differently with them and treating them differently in the field based on their performance.

The new incentive plan will begin in January 2012, according to Edwards.

In the current system a partner's revenue is added up from both licenses and maintenance contracts, and the total drives the margin the partner gets.  "We want to motivate those separately," says Edwards.

According to Microsoft Dynamics Partners Vice President Doug Kennedy in a Microsoft interview, the new incentive program is about putting appropriate rewards in place relative to the marketplace. He stated, "We believe this is a highly competitive, ‘pay-for-performance' partner discount model that will enable us to realize our growth goals. We have gained share in the ERP and CRM space during the economic downturn, and we expect to accelerate share gains as the market recovers. This program is part of that effort."

Under the new plan, resellers' license sales will see a 10% reduction in the base-level discount.  Large partners will see even higher reductions in discount, according to Edwards.  However, growth incentives will enable successful partners to make 20% more than they do today by hitting growth incentives across three measurements -  year-over-year license growth; growth over two sequential years; and year-over-year new customer acquisition. 

Meeting one of these three goals will ...