Microsoft can spell disintermediation

An article from CNet describes the reaction of some long-time Microsoft partners to the company's recent moves to sell direct to smaller enterprise customers.

Most of the article discusses the current licensing plans and Microsoft's push to lower the entry for companies from 500 seats to 250, but it does touch on the issue of distribution partners and other resellers who are growing disenchanted by their relationship with Microsoft that is dwindling as their larger customers go direct with the company.

If you've read any of my previous disintermediation info, this is of no surprise to me, and it doesn't mark an "evil Microsoft" problem (unlike DRM, which is a separate issue). Instead, it reiterates some of the changes that happen to business when the customers become closer to the manufacturers and the middle-men get lazy.

Despite complaints from the ex-distributors and resellers that Microsoft used them to enter the accounts and is now just tossing them aside, I think back to the near-total lack of support and training from these middlemen and think that if they were providing more value, Microsoft wouldn't have needed to create a training organization and wouldn't have seen the opportunity to get direct with the customers.

Since most of the middlemen weren't carrying inventories (Microsoft's Open License program allows them to rapidly acquire licenses for customers after they have been paid), they aren't proving any inventory benefit to Microsoft. Since their training and support were lacking, Microsoft felt the need to include more training and support in its recent EA offerings and develop a training infrastructure and support infrastructure to handle the load. After a while, Microsoft realized that most of these folks were just pressing the flesh, taking orders, faxing copies to Microsoft, sending the resultant codes to the customer and taking a healthy percentage for their "trouble".

Is it any wonder that manufacturers feel abused in this situation?

The less value these middle-tier folks bring to the equation, the less compelling the argument is for either the manufacturer or the end user to keep them in the loop.