#26: Peeling back on Microsoft’s channel incentives investments, with Scott Peltier

Scott Peltier, Microsoft’s US Channel Incentives Lead – One Commercial Partner

Microsoft Channel Incentives can be a complex and polarizing topic for Microsoft Partners. In this episode of this special series, “Season of Change and Transformation”, I interview Microsoft’s US Channel Lead – Scott Peltier.

Scott and I peel back the topic of Microsoft channel incentives available to close to 100,000 Microsoft Partners in the U.S Market. Scott simplifies the topic, how channel incentives have evolved to support the transformation and feedback he receives from partners.

Scott does a nice job of discussing his approach to the business. His insights and appreciation for what makes a great partnership and how the approach to partners has evolved to better support the business and is why Microsoft is the place for partners to place their big bets. Scott also gives advice for partners looking to better engage with him and his team.

In the interview, we also discuss his career journey, valuable lessons he learned when he started in his career, role models and advice he gives to the people he mentors.

You can read the entire transcript of the interview below.

As with each of my interview and articles, I appreciate your feedback. You can reach me on Linked In or on email at vincem@cloudwavepartners.net. You can also review this podcast by going to iTunes and searching “Ultimate Guide to Partnering” and clicking on the album art and hitting the ratings tab. This helps others find the podcast.

Thank you for following and listening.

I hope you enjoy this episode!

Vince Menzione

Vince Menzione:             Scott, welcome to the podcast. I am really excited to have you on, my friend. We had the opportunity to work for several years together within the US Partner Organization. Your topic, channel incentives, is one that’s near and dear to our partners, so I’m glad you could join us today during this season of change at Microsoft and to tell our listeners all the exciting things that are happening in your role and your organization. So, welcome.

Scott Peltier:                    Hey, Vince. Thank you very, very much. You are exactly right. Channel incentives, I’ve been running this business for several years and it is an exciting business. It’s sometimes a very hard business, but I am delighted to be here with you and to talk through some of the strategies, the things that we’re doing, things that as you know are very, very important to partners and that’s their profitability. I have been at the heart of that for several years, and I can’t think of a more exciting role that I’ve been able to partake up in the last several years and to really get to know partners and really what makes them work. So, glad to be here and looking forward to our time together today.

Vince Menzione:             We’re going to peel back a little bit on that channel incentives piece, but I want to give you a little bit of insight from my side, you and I working very closely together over the years. This is a very complex topic, and it’s one that isn’t very well understood for a lot of people both partners and internally to Microsoft, so I think this interview will be very insightful for folks. To begin, can you take our listeners a little bit through your role and your mission that you’re looking to accomplish for partners?

Scott Peltier:                    Sure, and I’m gonna digress just for a moment because when I visit with whether it’s family members, relatives, they all want to know what I do at Microsoft and when you work in Microsoft you can … You get very complex very fast, but we speak the same language, but to folks like my family members or relatives, they don’t understand all of our language used at Microsoft, so interestingly, here’s how I describe what my role is at Microsoft to the outside world when they go “Scott, what do you do at Microsoft?” I say, “Hey, have you ever gone to Walmart and opened up the coupon book, and those coupons give you X percent off of what you purchase, let’s say, a television?” “Yeah, I understand that.” “Well, that’s kind of what I do. I’m that coupon guy.” I’m the person who runs those coupon programs to enable our partners when they sell more of our stuff, they get discounts and they get dollars that drive their profitability.

In a simple way, I don’t know how else to explain that to people who don’t understand the true depth of partner incentives, but my role here at Microsoft has been, like I told you earlier, it’s been an exciting journey over the last several years that I run the incentives as one would imagine. The budget is very large, and we touch several thousand partners on a monthly basis in terms of our programs and our incentives, and as well, I’ll tell you, Vince, been doing this now almost six years, and the programs we had six years ago versus the programs we have today, have truly transformed it. I know one of the things we’re gonna deep dive a little bit is that transformation that the entire industry, the entire market is going through. But in essence, it’s incentives that enable our partners because as we know, typically Microsoft doesn’t sell software, our partners sell software, and they need incentives to sell more, but more specifically, aligned to some of our key strategies. It’s been an exciting journey over the last several years as you can imagine.

Vince Menzione:             It certainly sounds like it, Scott. You know I know from conversations that we won’t mention numbers here, but the budgets and the amount of dollars that flow through are fairly significant for the company, and I’m certain that what you do in your role impacts company’s profitability in a large way. Can we talk about maybe some of the key levers that you are driving against in the coming year?

Scott Peltier:                    Yeah, sure. When I think of key levers, I’m going to, again, I got to go back five years because I think it’s good for the audience to hear the key levers that might have been a appropriate five-plus years ago and the levers today, and I’m going to do it this way. As we all know, we are in a cloud phenomenon, and that is the big transition that’s happening from even a global perspective. It isn’t just a US thing. It is all about the cloud, but when I think back five-plus years ago, the levers, the predominant levers that were in market to enable our partners to be profitable and to sell our software, notice I just said software, there was zero dollars being invested in our partner channel to sell anything cloud because cloud was just sort of beginning to take off. And so almost all dollars went to our, what we would think of our traditional on-prem kinds of software like SQL and Windows Server and Windows and Word and PowerPoint and those kinds of things.

Well, the transformation that we have seen in the last five years, not only is the market moving to the cloud and our customers, but the dollars that we invest are also transforming into the cloud. Zero percent went to cloud five-plus years ago. This year we anticipate 60-plus percent of our incentive budget to go toward cloud solutions, cloud services, because this is the big bet. This is the big transformation that’s taking place in our market.

Vince Menzione:             And if you were to rewind five, six years ago, hasn’t the partner set that you influence through channel incentives changed? If I recall, it was mostly around what I’ll call the transactional partners, the large account resellers, the license solution providers and [inaudible 00:05:44]. What’s that like today?

Scott Peltier:                    Yeah, that’s interesting. We think of just the market transforming the cloud. I think this has been one of the hardest things for our partners. Now, there’s this kind of two subsets of partners that within our Microsoft ecosystem that you’re fully aware of, and you’re right, those transactional partners and they were predominantly accountable to manage the licensing aspect of our software and manage the sales of it, and so, a lot incentives were geared toward that motion, where the other traditional partner, what we would might call our solution integrator, that consulting kind of a partner, they were predominantly making money providing consulting services, implementing, deploying those out of the box solutions that Microsoft has been great at building and delivering. So the evolution that’s been taking place with out partner ecosystem is those traditional, transactional partners have had to evolve because as you can imagine, when you sell software in a box, that kind of revenue stream is very different than when you sell a subscription service and it’s amortized over 12 months versus a license is like over a year or two. And so they’ve had to transform.

But where the dollars are moving now, from a Microsoft perspective into our channel is we’re saying “You know what? We need more of our partners, not just the traditional, transactional partners.” We want incent our, I’ll just use the word, our consultative type of partners, and this is where we’ve seen a large shift as well. So those organizations are transforming as well because customers are demanding cloud services, and so not just the transactional partners are transitioning, but also the traditional solution integrative partners are also having to transition and rebuild their business models, and so you couple the demand that customer are asking for, partners are having to transform, and third, we’re also having them to transform our dollars and where we really want the energy of our partners to spend their energy in helping drive solutions for our customers.

Vince Menzione:             So let’s try and get a little bit more tangible about channel incentives if we can.

Scott Peltier:                    Sure.

Vince Menzione:             We talked about levers. We talked about coupons and discounts and things like that, right? What would be some specific examples, maybe both on the transactional side and that system integrator side or cloud solution provider, whatever the nomenclature is that you’re driving against?

Scott Peltier:                    Sure. We’ll go back to the basics of what is still a large part of our portfolio, and that is we still are very strong as a company in selling licenses to our customers, but it’s been one of the hallmarks and we’ve kept our customers, our customers have stayed engaged with Microsoft, and so when a partner sells a solution to a customer through a license agreement, there are certain motions that we try to reward. One is net new business. So a partner will work with a client who might not be on our platform or might only have part of our platform. There are still a lot of new business to be had to come onto the Microsoft platform, so when they actually sell that solution, the customer buys it and that partner then, based on a new motion, they get a percentage of driving that net new business, and I’ll just mention one other key lever in this traditional business of ours. So because we’ve been talking a lot about licensing, licensing have a contract to them, whether it’s one, two, or three years. Well, upon the renewal of that licensing, we also reward that motion to renew the business, to keep that customer loyal, keep that customer on our platform.

That is a big part of, still, the Microsoft business, but as I have watched the transformation over the last two, three, four years, licensing is becoming less of our revenue stream and the subscription model’s becoming more of a revenue stream. So now let’s take another lever that we’re incenting because the whole cloud services is the big bet that Microsoft is making, and it is actually working really, really well, so one of those levers as an example, let’s pick on Azure for a moment. I trust most of our listeners are going to know that particular platform. Azure, hundreds of different kinds of services, one of which would be a, I’m going to make it really simple, a backup solution. Let’s just pick on one service and let’s say a customer purchases an Azure solution. It could be backup. It could be some sort of data BI analytics service, and so we incent the partner, there’s a lever for that partner that, don’t just deploy that solution. Customer, we want you to use that solution, and so when that customer uses that solution, the partner gets a percentage of that usage.

So the more bytes that they use, the more the partner gets paid, and so the incentive for the partner is sell it, deploy it, train it, and drive that usage, and we provide some pretty robust reporting for our partners so they can see of all their customers, here’s our top users. Whoa, we just deployed that. Why aren’t they using it very much? So it’s a pretty effective incentive to connect the partner and the customer, and it’s done really well, and we’ve had it in market for, I’d say, nearly three years now, especially as Azure has taken off.

Vince Menzione:             So for instance with that one example with Azure, are you getting down to that level of granularity or is it just Azure consumption all up and then partners are paid on both the deployment and then the ongoing revenue stream?

Scott Peltier:                    So you’re asking me to get even a bit more particular. Let me double click on that for you just for a moment. So what happens is based on the usage of that month, and again, I’m going to pick on the simple solution of backup, and as we know that with an Azure service of backup, the data of a customer is backed up in the Azure service which is in the cloud. And so as that data is moving in between our data center and the customer, we monitor that, and we monitor the amount of usage or consumption that customer is using. And let’s say they consume 10,000 dollars of Azure stuff that particular month. Well, the actual rate is, and I can share this, is they get seven percent of that consumption for that particular month, and if they consume the same amount the next month, they get seven percent of that amount, and then built some accelerators in there to drive growth in that consumption because, you know, are we content with 10,000 dollars of consumption? The short answer would be no.

We want them to use 20,000 or maybe 30,000 or maybe 50,000. As long as that partner is helping consult that customer to drive more consumption, that partner is continued to get paid those incremental dollars, so it’s really a great model for our partners to look at and to drive, you might say, profitability for their organization. They have, as you know, Vince, partners have multiple levers of profitability, whether it’s the consulting services, their support services, their deployment services, and we also deem then the incentives that they can earn based on their services tends to be a strong profitability lever for them.

Vince Menzione:             That’s a really great synopsis for our listeners, Scott, and I appreciate you taking them to that level of depth. What about when we look at, or when you look at, the big bets for, we’re in fiscal year 18, I’m calling this the season of change and transformation at Microsoft, and this is certainly an exciting time with the reorganization and the one commercial partner organization, what are the big bets that you are driving against for this new year?

Scott Peltier:                    Yeah, so I’m just jotting a note down here, Vince, and top of mind for me is this. There’s a new licensing motion that you’ll be aware of, and I want to be careful not to get too technical in my language, but it’s a licensing motion which we call CSP, Customer Solution Provider, and what this particular licensing motion we just launched a couple years ago does for our partners is it enables more partners to sell our services to our customers. So the big bet, where an enormous amount of our incentive dollars are going toward, is this licensing motion we’re calling CSP. Five years ago, you recall this, Vince, we only had a few partners in the US that sold our software or sold our solutions, sold however you want to coin or call what Microsoft builds and develops for our customers.

Well today, through this new licensing motion called CSP, we now have hundreds of partners selling our solutions, hundreds, where the big value and benefit is, as partners have given us feedback and I could go into a whole nother area, but we pride ourselves here at Microsoft that we work hard to listen to our partners through surveys, through visits, through phone calls, and we’re going to talk about partnership here I know in a little bit, but I think one of the keys to great partnership is listening to one another. Well, our partners said to us “We want to own the customer end to end. We want to own the billing. We want to own the invoice. We want to own the support. We want to, not your traditional transacting partners, but there’s more of us out here that really want to build up an install base and own it end to end.” The big bet? CSP. That licensing motion, and I can tell you, there are some rich, rich, rich incentives and a large part of our portfolio is some of the different levers within that CSP licensing motion. So that would be one of the first ones that I highlight, Vince.

Vince Menzione:             Yep, and that’s a great one. And for our listeners who haven’t listened to it before, episode five, we had William Lewellyn on to take people through the early mechanics of the program. He will be on a future episode because we’re going to do an update or an encore and talk about what his plans are for ’18, so this dovetails nicely with that conversation, Scott, so continue.

Scott Peltier:                    So, I would say another big bet because, again, I know I keep going back in time, but I think it brings a great perspective as to what Microsoft from a strategic perspective is trying to achieve today. Let’s go five, sex, seven, eight years ago, the traditional buying pattern of a customer was, between a customer and a partner would have been, here, purchase your Windows, purchase your SQL, purchase your Server, purchase, purchase, purchase, and how we sold it was in a box wrapped in cellophane, and those boxes would sit on a shelf and one of the problems we had to deal with over and over and over was customers were buying the box but they weren’t deploying it. They weren’t getting the latest and greatest and we all know, security was one of the, it still is a very big hot button today, but it was way bigger back then. Well Microsoft’s solution to security back five, seven, eight years ago was stay on the latest and greatest.

Well, you can’t go make a customer open up that box and put that CD in a hard drive and go and implement that entire solution. So the big bet that we’re making today is, and what’s in enabling that is the subscription service. I can speak simply now because at home I have purchased Office 365 for our few computers at home and it’s made real to me because I never have to worry about an update. I never think about do I have the latest and greatest? And a subscription service keeps me on the most current and Microsoft never has to worry about am I deploying the latest, so our customers, because we want them on the latest and greatest for a myriad of reasons, security being probably one of the biggest ones, but also they get more value from our solutions when our development teams work so hard to build in the features and functionality that customers are demanding. And so the big bet is this whole subscription model but making sure we’re driving the right incentives to support that.

As we talked a little bit earlier, it’s “Hey, partner, don’t just sell it. Deploy it, yes, but drive that continual monthly readiness, that continual monthly support, so the customer is using it and using more of it, and oh, by the way, partner, we’re going to invest a lot of incentive dollars to help you partner with your customer to drive an uptick, that kind of consumption and usage of our subscription service.” So I would say, Vince, that’s the second big bet that from a, not just a company perspective, and proof of this is where the dollars go and as you remember, I know exactly where all our dollars go, and they predominantly go to the cloud today, they go to usage and consumption and they go to that CSP model. You want to know where Microsoft is headed? Follow the money. Follow where the most profitability for our partners is, and it’s in those kinds of levers that I’m talking about.

Vince Menzione:             Yeah, that’s great for our listeners. I’m hoping they’re all jotting down notes, but if they aren’t, we’re going to provide some of this in our show notes, and I know you spend a lot of time with partners. I know you get out in the field, and you meet with partners and you attend partner events like Inspire. When you sit down in round tables, what’s some of the feedback you get from those partners? What do they like to see more of or less of?

Scott Peltier:                    I’m just thinking here. You are right. In the six years that I’ve run partner incentives, I have literally traveled all over the world. I’ve visited with hundreds and thousands of partners and I would say, okay, here’s what’s coming top of mind, simplification. I would say any partner I visit with, they say “Microsoft, Scott, can you simplify? Can you simplify? You have hundreds of programs. You have lots of different seller roles within the company.” I heard a number at Inspire which is our huge partner global conference, 170 different partner programs that partners can participate in to engage with Microsoft, and they say “Scott, if you can be any sort of advocate force back at Microsoft, simplify, simplify, simplify. Simplify your incentive program. Simplify your portfolio program, and simplify how we engage actually with Microsoft,” and ironically, we actually do a really good job, partners do a really good job. The most coveted channel in all of the planet is the Microsoft partner channel. I’m very proud about that. I’m very proud to be a part of that and to help them, but I would say that’s the predominant message that they share with me over and over and over.

And so I would say a second one they give me is they say “Scott, we know change is imminent. We know that customers are evolving how they do business, where and how their solutions are deployed and how we use them, but sometimes Microsoft changes too fast, and we have to evolve our business and things take time and readiness and we have investments to make, and it feels like sometimes, Scott, Microsoft has enormous amounts of infrastructure and dollars and they can make those quick changes. Well, that doesn’t always work here within the partner channel and so if you could just please telegraph sooner, allow some change management, and enable our change management. Help us with it, with readiness, with dollars to invest so we can start up that particular kind of a practice and so on and so forth.”

So I would say those are two of the key messages I hear over and over and over, and I think partly because I run partner incentives for the US and there’s nothing more near and dear to a partner is the profitability and one of those key levers is incentives, and so, I have a team of people back here at Microsoft to make sense and simplify and the message and the readiness. I can only imagine at times how partners have to translate what is Microsoft providing me, what are my opportunities, who are the people that I work with, and so it’s a challenge, but I’ll tell you, we’ve made a lot of strides, though, too, in the last several years to bring that feedback to light for our partners because I monitor our surveys and I know our partners, they do like Microsoft, but they’re also not afraid to tell us where we could do a lot better.

Vince Menzione:             We’ve been talking about the reorganization with some of our other guests in what I’m calling the season of change and transformation. Just for our listeners to clarify, there’s a build with, there’s a go to market, and there’s a sell with organization. You’re function sits within that go to market, right? So that’s sort of the, I’ll call it fueling the partners to success portion of it. How do you engage across the other organizations with the build with team and the sell with team? How does that engagement look like?

Scott Peltier:                    So I think I’m going to talk about it this way. There was a lot of change as you just highlighted, and there are organizations that are still figuring out how to engage across the different organizations, so there’s still a lot of learning that’s taking place. And so everyday it’s learning, learning, learning. So let me talk about the build with just for a moment. That one’s the one organization that I get very, very clearly and we need to continue to step up and help them. They are the partner development managers. They’re the Microsoft folks that actually engage with our partner channel to help them build their business, build additional practices, and so the engagement that we are getting more tenacious about and more aligned to is as a, one of these partner development managers are engaged with a partner.

The partner will always ask, because it all comes down to profitability, “You want me to fire up this new practice, so and so, what’s in it for me? How’s my money going to flow? What’s my profitability going to be? What are my services?” And partners ask that in a way that they know what profitability is. They know how to make money. That’s the beautiful thing about the Microsoft partner channel. They know how to make money. The problem is we want out Microsoft partners to sell A, B, and C things of ours, but we don’t always provide them either the right resources or the right dollars to make those initial investments. So we have to get a lot smarter in engaging with that partner development organization, so that way we can equip them with oh, by they way, partner, here’s what’s in it for you. Here’s that roadmap over three years of dollars that you can earn from these investments that we make within our partner channels, so I would say that is the first one that we’re really doubling down on to engage with and partner with so they can equip and best equip our partners with here’s the dollars that are available to you, dollars, programs, things like that to help really jump start some of those early practices that partners are jumping on.

Vince Menzione:             And what is the sell with engagement like? Is it pretty automatic from that point then? So once your partner has built a program or a competency, they now would now what their profitability model is, maybe they’ve taken advantage of other go to market incentives, now it’s just a matter of those channel managers engaging and plugging those partners into opportunities, right?

Scott Peltier:                    I would say precisely, but I do think there’s still an opportunity there because we get involved in a lot of kinds of deals especially on the sell with side of the organization because a partner’s trying to do a couple of things. Number one, they’re trying to maximize a solution for the client, and in doing do, the partner also then needs to know, they’re trying to maximize their dollars that they can earn from us, and so there’s this do what’s right for the customer, maximize dollars, and so we got to continue to get smarter about making sure that our sellers understand the portfolio, the incentives for our partners and actually serve as an advisory committee for our sellers where, and this has been a big bet that I’m going to encourage the team to think about even more so this year, is help our sellers optimize both the licensing and optimize that portfolio that our customers are buying, so there’s some great opportunity there.

But, Vince, the reorganization is still as you would imagine, still really fresh. It was just in August the whole thing gets announced, and here we are at the end of August, and so there’s still a lot of learning and people are asking a lot of questions. I’m just going to quote this. So Dave Willis, our corporate vice president of partners in the US, was quoted as saying [inaudible 00:27:07], the reorganization that we went through and he says “If anybody’s confused about what they’re supposed to do, pick up the phone and call a partner. Start with that,” and I just said “Yes. Yes. Yes. Break it down simply for us. Just call a partner.”

Now, it’s a lot more complex than that, sophisticated, but I love the new energy that Dave is bringing to the new org which is partner first, and if any of our listeners actually went to the Inspire conference, they know that one of the messages they heard from our executive partner leadership team was partner first, partner first, partner first, and I think that’s the big learning. That’s the big thing we need to land more than anything this upcoming year is keep that thing going where Microsoft is all about the partner because they’re the ones who are selling our solutions. They’re the ones engaging with our customers. A really important part of our strategy.

Vince Menzione:             I would say it’s an exciting time to be a partner at Microsoft, and those 300,000 or 100,000 in the US, I’m sure, are very eager and excited to engage. Great feedback, and amazing … I love what Dave had to say there with regards to pick up the phone and call a partner.

Scott Peltier:                    Right.

Vince Menzione:             Let’s talk more about partners. You have had the opportunity to work with many partners over many years. You’ve, again, spent time in the field. I know you spent time with me and with others traveling and meeting with partners, getting to know them, their business, their operations and so on. So, what do you think makes, what characteristics do you believe make a great partner?

Scott Peltier:                    As anybody who interacts with Scott Peltier, they know my passion for partners and my long career both at Microsoft and at a company prior to that called Great Plains Software, most of my career has been around partners, their business, understanding their business, understanding how they make money, and I pride myself that one of my biggest jobs over the years has been, I will be their voice back at Microsoft and I will take their feedback always, always, always and go and try and tie in to the right people to make this change. So the first thing that comes to my mind when I think about a great partnership is we’re in this together, and what I mean by that is as I have personally experienced and observed and watched is what partners love is when Microsoft listens.

What Microsoft loves is when partners provide feedback, and that togetherness of we’re in this together. Partners understand Microsoft has to make strategic decisions. Microsoft is accountable to lead strategy and how this company is run. What partners can hold us accountable for, and there’s no excuse, is flawless execution. Partners should and can and do give us incredibly candid feedback that Microsoft, you’re just not executing well. You need to step up. You need to communicate better. You need to telegraph better. Well, the partnership, when I think about together is, is when there is those gives and gets between two organizations. Partners get that we have to adjust strategy. Partners get that we have to go to a consumption model. Partners get we’re going to subscription model.

We get that partners need time. We get that we have to execute flawlessly. We get that we have to be really, really good at communicating. Really, really good at synthesizing the information, so it’s clear, it’s concise, and do we always do a great job? No. But that’s where that togetherness between our partners and Microsoft come together, and I know we’re a lot better at listening and I think fixing things the first step is always listening, and I always get a little paranoid when I go out because I love listening to the pains that we sometimes bring our partners, but where they hold me accountable is so Scott, did you share my feedback? Did you share my feedback, and so great partnership is gives and gets, and it’s a togetherness. We’re in this business together, and it’s less about us and them. It’s about us.

Vince Menzione:             Yep. I’ve heard that referred to as the mutual skin in the game.

Scott Peltier:                    Yes.

Vince Menzione:             And also the shared purpose, the shared values, shared purpose that makes the great ones great. So that’s really good, really good feedback, Scott, and love your insights there. And what about the partners that didn’t always get it right and maybe failed working with Microsoft? What would you tell them now if you could?

Scott Peltier:                    I would tell them Microsoft has learned a lot, and I’ve been at Microsoft now 17 years and the culture 17 years ago is very different than the culture of today. I have watched our new CEO Satya, customer, partner, customer, partner. It’s in all of his talk tracks, and that alone is shifting the mindset of people, and so some of those partners that may have dropped off and just said “I can’t do this,” I would have probably been one of those partners years and years ago. “I can’t do this.” Microsoft is a very complex organization, but it’s a mindset. It’s a mindset that you wake up each day and you go “My partner is first. I’m going to do everything in my power to be their advocate and their voice,” and that, I have personally seen more than ever, especially in the last three to four years. And so to those partners that, for whatever reason that they gave up on the Microsoft platform, they gave up on Microsoft as a company to partner with them, my advice and I would do it if I was sitting there having coffee with them, try again.

Sit down, explore the opportunity, and give us another try because it’s not the same company from years ago. There’s new leadership. There’s new vision. There’s new strategy. I have never felt more energized to be able to speak a partner-first message than ever before, especially when you talked about the organization. There is now a partner organization in the US where all partner resources are on one organization, under one vice president named David Willis, and I know his passion. It’s about partner first, so to me it’s not the same Microsoft today. There is definitely a leaning in both to our partner channel and into our customers to make sure we’re doing what’s right, because you know what, Vince? At the end of the day, competition is fierce, and the only way Microsoft will continue to win is not just the great and best solutions we have in the industry, but it’s how are we taking care of our customers, our partners, and our senior leaders both acknowledge that and they just continually raise the bar, month over month, year over year.

We have to continually get better and you can see by some of the executive recruits that have come into the company in the last three, four years. These are very partner and customer-centric individuals, and so to me, Microsoft is the place to place the big bet, and for those that are sort of on that fence, now’s the time to explore it again, because we do have great solutions and we do have a different mindset, and I can say that personally.

Vince Menzione:             So that’s really great feedback and advice, Scott, and is there any other advice you’d have for partners wishing to work with you and the go to market organization?

Scott Peltier:                    Yes. I would say, and this is when I go out and visit, and when I visit with a partner and they’re struggling with program X, they’re struggling with readiness, they’re struggling with I don’t know, I don’t understand, I immediately say “Are you tied into my team? Are you following our yammer site? Are you emailing me directly? Are you engaged with me? Who in your organization focuses on programs?” And I don’t care, in my mind, whether the, and I know it’s harder for partner organizations that are smaller, easier for partner organizations that are larger, but there needs to be in every partner organization an individual that’s either part of their day thinks about Microsoft programs or in larger organizations, it’s their full time job to think about partner programs because every partner should have somebody who’s leaning in hard to understand how do I stay informed, what kind of office hours where I can jump on a call on a monthly basis, how do I and where do I get the materials, how do you communicate because I want to be engaged.

And so I put a little bit more of the responsibility on our partners to say “You’ve got to lean in. There’s such opportunity. There’s so many programs to help enable your business. There’s so many types of incentives to help drive some early profitability as you’re building up your business, but you have to lean in. You have to engage,” and they most certainly could start with me and I can actually put them into some of the different platforms that we use to keep our partners informed.

Vince Menzione:             That’s great advice for our partner listeners, and we will provide a link in our show notes, your email address, maybe other ways that partners can reach out to you and the organization, so just terrific advice. Scott, as you might know from listening to other episodes, I’m fascinated by how people got to this particular spot in life, and so I wanted to focus on your personal and professional journey. You have an interesting story, and 17 years at Microsoft and I know there’s many people getting started in technology, looking to maybe join an organization like Microsoft. Can you take our listeners through that journey for you?

Scott Peltier:                    Sure. It’s kind of sometimes invigorating and refreshing to make yourself go through that journey and I’ll go back to high school just for 30 seconds. I remember taking a career test. It’s one of those tests that a lot of us have taken where the guidance counselor is trying to guide you as to what degree to go pursue in college, and basically it’s the what do you want to be when you grow up kind of a test. So I take this test, and the results were I was supposed to be a train driver. That’s how I call it. I was going to be a train driver based on all these questions I answered. I was supposed to drive a train, and I chuckle at that because going from that up in northern Minnesota where I grew up and then going down to college, my whole career just began to evolve in ways that I never, ever imagined early on.

Right out of college, I became a high school schoolteacher back in the, back, well I won’t date myself here, but it was a time when they put floppies in computers and I taught computer science and accounting and I love that teaching element, always have, always will and I think this is what’s made my current role so fascinating for me as I love the enablement and the teaching aspect that I’ve been able to be engaged in for so many years. So after teaching and using the business skills and the teaching and that forum for several years, I joined a great company out of Fargo, North Dakota, and I’m certain many of our listeners will know the company, and it was Great Plains Software, and Doug Burgum was on a terror mission to build the best business solutions software on the planet, build the best partner ecosystem on the planet, and as well, put customers first in everything they do, and so I spent seven years at Great Plains Software first of all doing technical support and then where I would work with partners and customers, helping them through these new solutions that we were developing way back in the 90s, some of the first window-based solutions for accounting and so on and so forth.

And then, the history, another major chapter happened, and that was Microsoft purchases Great Plains Software in 2001, and I would say that one day when I retire, that will be one of the greatest moments of my life, to wake up on a day and say “I work for the greatest company on the planet,” and so for these 17 years that I’ve been at Microsoft now, I’ve have various roles related to partners and customers and sales excellence and process management, and I can honestly say each day I wake up and I’m so proud to work for this company, to see this company evolve into a partner first, customer first mindset, and also just to be a part of a company that is one of the most giving companies on the planet.

And I always, I can’t forget to say that. Bill Gates is on a mission to solve really, really big things on the planet, and I like to say when a customer buys our solution, in one sense they’re contributing to a company that wants to have a global footprint of not just selling great solutions and making lives great, but also really changing and solving disease problems, solving poverty problems, and so to me, it’s not just a software company. It’s not just a solution company. You get the whole package with great values, and so here I sit today, 17 years later, having achieved so many of my career ambitions, going from Scott, you should be a train driver to you lead a very large partner incentive business where you touch thousands of partners on a yearly basis. It’s just been an incredible career ride for me.

Vince Menzione:             That’s great, and Doug Burgum has gone on to become the governor of the great state of North Dakota.

Scott Peltier:                    Yeah, I think about that, and I say “You know what? We just might know the next president of the United States one day,” but Doug, he’s a leader and I have such high respect for what he’s been able to do, being from North Dakota and rebuilding the town of Fargo, North Dakota, and so it was all in all a very, very great experience, so very privileged for sure.

Vince Menzione:             It’s great that you shared that. What was the best piece of advice that someone gave you when you took this role or when you got started?

Scott Peltier:                    To answer your question, the best piece of advice I got, it would have to be in terms of I think early on in my career, I was a little less confident in my abilities. I was a little less confident in being able to achieve really, really, really, really big things, and I had early people in my life who surrounded me with, I think of them as my personal cheerleaders, my personal mentors that you can do this, Scott, you can do this, Scott and I think everybody needs those kinds of people they surround themselves with because my best managers, my best leaders, and I can think of one specifically back in my Great Plains days, they knew just how to get the most out of me because sometimes people don’t know how to always get the most out of themselves, and you need to surround yourself with really, really bright people who are vested in you, who deeply appreciate all of your contributions, all that you’re doing, and this individual knew how to coach me, guide me and mentor me, and one day I would wake up and go I didn’t know I had that capability. I didn’t know I could do that.

I didn’t know I could achieve that. More importantly, I didn’t know how I could learn that. I’ll never forget, I got to share this, I remember one, there was an example of I had to fill out this RFP, a request for proposal. Our partners [inaudible 00:42:35] know precisely what an RFP was. Well I was young in my career at Great Plains and it was like 58,000 pages, and I remember looking at this thing. I had never filled one out before. I didn’t even know what the acronym really stood for, but my manager said “Scott, I need you to fill this out and bake in migration services and whatever else,” and I remember for a week just struggling. I couldn’t do it. I couldn’t do it. I couldn’t do it. I went in to his office and he looks at me and he says … I shared all the struggles I was having, and I just can’t do this, and I’m just not smart enough, and I was a bit of in a whiny moment, and he says “I can certainly take this off and go give it to somebody more capable if that’s what you really want.”

And at that moment, I had this epiphany and that is “No, I can do this.” I went, I finished it, I collaborated, I brought in other smart people to help, I finished the product, we closed the deal, and he looked at me and he says “Now aren’t you glad I didn’t take that from you?” And it’s like, we need those moments to both build confidence, to build learning capabilities, to learn skills to say “I can do anything and everything imaginable,” especially when you’re empowered within your company, and so I would say it’s been certainly a journey to build more confidence, more capabilities out of me, but the key, surround yourself with the right people who know how to draw out those little nuggets that you have.

Vince Menzione:             Nice. I love that example. And what about people that you were mentoring? I know you’ve mentored quite a few people at Microsoft. We had some people we worked on together a program called the Next Step program which was a mentorship program. What advice would you give someone who was looking to join Microsoft or join your organization that you were mentoring?

Scott Peltier:                    I appreciate that. This is near and dear to my heart. I love to mentor people. I love to career coach people, and one day I will write a book on these kinds of topics, and I have a chapter picked out, and so the advice I give people now today, especially after all these years that I have been in business, the things that I’ve learned, and the thing I coach people is be a preposition. And to my listeners, they’re going to go “Be a preposition?” When I was in elementary school, I learned that a preposition is anything a squirrel can do. They can run over a tree, under a tree, through a tree, and there’s like 300 and some different prepositions in the dictionary, and the concept there is get things done. And when those blockers come up, go over it. When that blocker comes up, go under it. Go around it. Go through it, and so in a sort of lighthearted, funny way, I encourage people to be a preposition, and that is one of the keys to success.

Do you know how a manager goes to when they need something done? They go to that individual who can get it done, over and over and over and over. You don’t give something to somebody that has an inconsistent way of getting things done. No, you give it to that preposition because they’re going to go knock down hurdles, they’re going to do whatever it takes. They’re going to be that squirrel that runs around, through, over, under, around that tree to get that job done, and so my biggest thing is you want to be successful in business is, and I have dozens of these kinds of little things, but this one that has really resonated with me in the last five years is be a preposition. Be known, build a brand that says this person can get it done. They get it done with style and they get it done with impact and the kind of things that keeps people engaged in a business.

Vince Menzione:             Be a preposition. I like that. We’re going to put that in our show notes. So who is one of your role models, either directly or indirectly, and what advice or what attributes did you learn from them?

Scott Peltier:                    One of my role models and I’ll call him one of my heroes, and I share this because this individual has a leadership style that I think about almost everyday, and it’s a person of years ago. His name was Stonewall Jackson, one of our great leaders within our country, and he had a leadership style where he was known for always being in front of his men during battle, and his generals would say “Stonewall, don’t be out there. You’re going to get shot and you’re going to die. The people need you as their leader,” and he says “No, no, no. I need to be up here in front, and I have to know the pulse of my people, and I have to show them that I am willing to roll my sleeves up just like they have to,” and I have thought about that for years in terms of how I want to be a leader, whether I lead teams or whether I am an individual contributor, it doesn’t matter. Always be willing to roll your sleeves up. Always be willing to go out there and sometimes there are battles that take place in business. Sometimes Microsoft doesn’t do everything right, and there’s a misfire on communication, a misfire on a payment.

When partners know that we’re willing to roll our sleeves up and just get into the thick of things to resolve it, come up with a solution, an enormous amount respect and admiration comes out of that because too often leaders, they sit behind doors and they become out of tune with what’s going on, and that’s just not my style. I like to be in tune. I like to sort of shed the titles. I like to sort of come and break it down into let’s just all work together, get it done, do what’s right for partners, do what’s right for customers, and worry less about titles and more what’s doing right for the business.

Vince Menzione:             I love that. Rolling up your sleeves and getting it done. Scott, I want to thank you so much for joining us today. It’s been so great to reconnect. For our listeners, I think this is such valuable advice, better understanding of the channel incentives programs at Microsoft, the big bets, how the company thinks and you think about partners. Thank you so much for joining.

Scott Peltier:                    Thanks, Vince, and thanks to all our listeners and I appreciate everything that’s been going on in the industry, so thanks again.


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