Microsoft Certified ISVs Ring Up Strong Financials, Survey Reveals

Do Microsoft-certified ISV partners have more fun?

Based on the findings of a Microsoft-sponsored survey, they have lots more fun than non-certified partners, for a very simple reason: they’re making more money. ISV Competency Partners—those that are Microsoft Certified or Gold Certified partners—outperform so-called Benchmark ISVs in seven of ten “key performance indicators,” according to the survey carried out by IDC, the Framingham, MA, research firm.

Benchmark ISVs aren’t Microsoft Certified, and thus tend not to be as focused on Microsoft Dynamics as are the certified partners. Thus, MS certified partners do significantly better on in such areas as revenue growth (25% advantage), cash flow from operations (over double), sale cycle (one-third shorter), and revenue per emplyee (1.7 times greater).

The study attributes the success of the certified partners in large measure to “a high reliance on new customers…In a business that is heavily oriented toward packaged software sales, the bulk of an ISV’s revenue will come from selling the packaged software primarily to new customers, since existing customers typically do not replace their packaged software annually.”

Another intriguing result is that ISVs with “a narrow technology focus…experienced very strong business velocity, as indicated by high revenue growth, high change in market share, high customer growth, and high deal growth.” And those with “a broad partnering base perform significantly better than ISVs who have a narrow partner base…”

Why does anyone care? According to the survey, “In the past, IT vendors were focused on producing better technology and expected their partners to have the requisite business acumen to develop a successful business around their products. In the new climate, vendors realize that the business health of their partner community is critical to their success.