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HOME REGIONS Middle East › INTERVIEW: Haider Salloum, Microsoft Gulf

INTERVIEW: Haider Salloum, Microsoft Gulf

by Stuart Wilson, Wednesday 10 August 2016

Channel EMEA is an official media partner for the inaugural SMB Channels Middle East event, set to take place in May 2017 in Dubai.

In the run-up to next year’s event, we’re running a series of in-depth interviews with major vendors and VADs in the Middle East to understand their SMB channel priorities and strategy. Next up in the series is the first part of a two-part interview with Haider Salloum, channel sales director – SMB, Microsoft Gulf.

Spend some time with Haider Salloum and you quickly realise the importance of the indirect channel to Microsoft’s overall SMB strategy is stronger than ever in the Gulf region. Microsoft wants to provide technology solutions to companies of all sizes – from two seats right through to the very largest enterprises – and the channel is critical to making this goal a reality.

Salloum explained: “For Microsoft, SMB is a key customer segment. For us to effectively service this segment, which is hundreds of thousands of companies across the Gulf region, we realised that we needed to develop a focused channel that truly targets this sector.”

“This is the key philosophy,” he added. “If you take the big systems integrators, big resellers and big VARs and you try to push them to sell to SMBs, they will not be effective. They will not sell out. They will be frustrated. They are not geared up for it – even the customers would not get the right level of service.”

With this fact in mind, Microsoft Gulf has focused its energies on building an ecosystem of partners that is capable, focused, motivated and knowledgeable enough to address and sell to the hundreds of thousands of SMB customers in the region.

Microsoft’s SMB channel strategy in the Gulf region is also adapting and evolving to fundamental changes in how solutions are delivered, deployed and consumed by SMBs. The transition to cloud-based computing sits at the heart of this change.

Cloud solution providers

“The first thing is of course cloud,” explained Salloum. “This represents a phenomenal change in our approach to market and how customers adopt technology. When we see certain shifts in buying behaviour, we are supporting the partners to adjust their style of selling to suit these shifts.”

“We also have to look at how we sell,” he added. “We recently launched the cloud solution provider (CSP) programme. This allows the smaller partners to go online and buy a virtual machine, local storage, e-mail and a range of other services – both Microsoft and non-Microsoft offerings – and put them together in an offering and sell it to their customers.”

Microsoft Gulf currently address the SMB market through a base of approximately 1100 channel partners in the region spanning UAE, Kuwait, Qatar, Oman and Bahrain. This 1100-strong reseller base includes companies with different business structures and styles. The two factors they all have in common are a sales operation and a technical delivery capability.

“In terms of marketing, SMB channel partners need to adopt a one-to-many approach,” Salloum explained. “In the SMB space it cannot all be done by face-to-face selling. The average deal size is small. If a partner is sending a salesperson into the field they will not have an efficient or profitable operation.”

“So this is part of our role to drive this,” he added. “We have a series of events called the cloud masters where we talk about partner profitability, how to change their P&L structure, what skills they should look to add, how should they hire, what type of compensation models they should offer – we help them address all of this.”

Annuity-based business

Microsoft Gulf segments SMB-focused channel partners based on their competencies, which also provides insight into a partner’s ability to address a specific opportunity. With such an expansive SMB channel base in the region. Microsoft is also now playing a major role in driving the development and evolution of SMB-focused partners – especially as the transition to cloud and managed service provision continues to gather speed. Long-term partners with traditional business models are offered support and advice to make the changes required to future proof their business.

“This is a big transformation that is taking place,” said Salloum. “Some of these [channel] partners are used to hiring top sales people and they are paid based on getting five or six big deals in a year. Cloud is a different matrix and different mechanics when you become a partner looking to sell smaller deals and build up more annuity-based business.”

“We tell them how to do this. We work with the channel on how to build compensation plans that reward the behaviour of selling smaller annualised deals and address the segment in a much better way. We even go to the level of saying that if the customer wants a small deal, annualise it for him, because a lot of the cloud works on a monthly billing,” he continued.

The transition for a traditional reseller from big project-based sales spikes to an annuity-based model is never an easy step to take. It requires a significant change of mindset from the channel business owner and an understanding of how it changes the financial dynamics.

“The channel partner’s financial model becomes more like a telco in some ways,” added Salloum. “It is a model where new customers you acquire are subscribers and you make money throughout the lifetime value of this customer.”

Talking to channel partners about the lifetime value of customers, average revenue per user (ARPU) statistics and modern go-to-market strategies is a world away from the traditional margin-based product-based SMB reseller model that is being rapidly consigned to history around the world.

Microsoft uses a range of tools including webcasts, channel events and close engagement with partners to make the evolution as smooth as possible. Persuading all of its channel partners to embrace the changes impacting channel models remains a challenge for Microsoft.

Born on the cloud

“In the beginning we found it a little bit difficult, and in fact, most of the classical partners haven’t shifted with us,” admitted Salloum. “Partners that have been selling Microsoft for 10 to 15 years - they didn’t make the shift.” “But we found a new breed of partners that we refer to as ‘born on the cloud’."

"That means a partner that has no legacy business - they started because they saw a cloud opportunity. They understand the cloud opportunity and they want to help the customers understand it too,” he added.

“These ‘born on the cloud’ partners were very quick to take the change on. The classical partners – it took some of them a longer time and they rejected the change at the beginning. Then they started to see these ‘born on the cloud’ partners winning more and more deals from them and realised it is something that needs to happen,” continued Salloum.

Driving classical channel partners to change their business is an ongoing task for Microsoft Gulf. Rather than making a radical overnight shift, Microsoft Gulf is encouraging some to start small and deliver a few cloud-based deals first before committing to major strategic business shifts.

Salloum explained: “After a few cloud-based deals we can go and talk to them and look at how they can go and take that and make it a business. One of the easiest ways is for them to ring fence a separate team and a separate P&L for the cloud business. It is not a case of throwing away everything they have today. Keep it, but also invest in the new area.”

He continued: “And that new area is a fast-growing area. And at a certain point of time it will catch up and then you can stop selling the old classical way. We are not saying go disrupt your business, shut down your current operation, change everything tomorrow. It does not work. This gradual approach has helped us bring in more and more partners to move with us to the cloud.”

Of the 1100 SMB-focused channel partners that Microsoft Gulf sells through, more than 680 are now transacting cloud-based deals. Microsoft Gulf’s SMB channel teams expects the rest to follow suit in the months and years ahead.

CLICK HERE to read the second part of the Channel EMEA interview with Microsoft Gulf’s Haider Salloum.

New SMB Channels event

SMB Channels Middle East, organised by DISTREE Events, will launch in Dubai in May 2017. The new two-day event will bring together 300 executives from the region’s leading resellers of IT solutions focused on serving small and medium businesses (SMBs). More than 60 vendors and value-added distributors (VADs) are set to showcase their solutions and services in the main exhibition area at SMB Channels Middle East.


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