Microsoft still aims to make AppSource a commerce platform for Dynamics 365 ISV solutions

September 14 2020

Microsoft has a new leader of its ISV Connect program for vendors selling into the Dynamics 365 and Power Platform customer base, but the program and its goals for partners will remain steady in Microsoft's new fiscal year.

ISV Connect was conceived of under the leadership of Steven "Guggs" Guggenheimer, the veteran Microsoft executive who took on the role of leading Dynamics 365 and Power Platform ISV engagement in the business applications space. But as Guggenheimer prepares to leave Microsoft for other roles, another company veteran, Toby Bowers, has taken over the role.

In a recent interview with Microsoft MVP Steve Mordue, Bowers explained that the ISV Connect program's approach and long-term goals will remain largely unchanged under his leadership. Bowers has been focused on Dynamics partner channel strategy and programs, among other duties, for several years, so the new role will be closely tied to his recent work. He explained:

I’m not new to the ISV strategy or the ISV Connect program. We’ve been…working really closely with Guggs and his team over the past year.

Under Guggenheimer, ISV Connect re-set the rules of engagement for Microsoft Dynamics 365 enterprise CRM and ERP ISVs. It impacted most elements that Microsoft could control about its relationship with these ISVs like policies and processes for getting listed in the Microsoft AppSource directory, revenue-sharing fees for sales tied to Dynamics 365, and the promise of other sales and marketing benefits. The model, which has been in place since mid-2019, required firms to sign up for one of two tiers of partnership. Even as the program ramped up by signing up ISVs and verifying apps in AppSource, partners were also scrutinizing the program's details and evaluating the value of Microsoft's benefits in return for either a 10 or 20 percent revenue share back to Microsoft.

Bowers described Microsoft's fiscal 2020 as focused on onboarding and enrolling vendors in ISV Connect. They now have 550 ISVs and 1,200 apps available through the program, he said. The program's goals of engaging with Microsoft sellers (for the program's premium tier), marketing through the app store, and getting more development support and alignment will remain, but with a focus on improving its execution. He stated:

Now that we're in market, this is the year to really mainstream the program across the Microsoft machine and really deliver on the value that we’ve talked to ISVs.

Microsoft still wants to make AppSource into a platform that allows ISVs to sell their apps to end users. But there are other fundamental capabilities of the site that need to be improved first, says Bowers, like search, user experience, and other "plumbing". Bowers predicted that those priorities will be covered "in the next few months". That will be followed by commerce capabilities:

We’re ultimately going to light up transactability of third-party IP through AppSource. That’ll come together with the ISV Connect program, so that partners can really choose how they transact.

ISV Connect has had "a ton of success" in the premium tier, where Microsoft co-sells the ISV solutions, Bowers told Mordue. He also acknowledged that the program should do more to serve the other vendors who are in the lower tier. AppSource improvements are one key area to deliver on, and he also brought up the age-old goal of encouraging partner-to-partner opportunities, which Microsoft may try to re-invigorate.

One area not mentioned by Bowers was any other way of re-structuring the program's benefits to provide vendors with what they need most among. While some are most interested in the ability to transact on AppSource, others see more value in added marketing or technical services, or access to more Microsoft partner management hours. Bowers did not rule out much, telling Mordue that the end goal is greater ISV success in Microsoft's fiscal 2021.

[M]y number one job is to deliver value to our partners. That value will come in the form of growth, plain and simple. Because if our partners are successful, we're going to be successful with this.

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