Microsoft takes its commitment to the partners to the next level!

Ramkumar Pichai
General Manager, Customer & Partner Experience
Microsoft India

Since inception, what has been the billing structure for Microsoft's products in India? 

We have about 4 million small and medium enterprises which constitute about 50% of the GDP. Anticipating this huge opportunity, we have introduced many changes in the last two quarters to align with the business opportunity and the changes involve how we are transitioning the partner network in terms of partners being able to differentiate in terms of core competency. 

In India, we do not sell to customers directly but do it through partners, distributors and LFRs. There are some large account resellers who also do direct billing from us, besides our distributors. Microsoft Singapore has been billing in US $ prior to this, to distributors and LARs.   

Is the policy applicable across your product categories (H/w and S/w)?

It is not uniform across all the product categories. EDD hardware will still be billed in US dollars. OEM and ISV billing will also continue with dollar billing. FPP, E&D Software, Open Licence, Open Value, Open Value Subscription, Campus Agreement, School Agreement, EES, Enterprise Agreement, Enterprise Subscription, GGA, SPLA, Select Agreement, Select Local, Select Plus will all change to INR billing.

Will you please elaborate on the various levels of partner engagement and the pricing?

We have five distributors and 14 LARs. Based on the competency, partners are classifieds as Gold, Silver and registered partners. Next, we have partnerships with multinational OEMs and then there are the domestic OEMs within the country who we have relationship with. To eliminate the conflict in the billing as per the dollar rate, which keeps changing, the Singapore regional sales has published an INR price list and that is what has to be transacted with Microsoft - no matter what the foreign exchange rate is.

Partners transacting directly with Microsoft regional sales in Singapore are those 19 partners and depending on who these partners transact with, we don't control what price they give down the channel. So, the pricing is for what you will be offering to the distributors and these are the 19 partners and then they would estimate the price. 

What changes are you introducing in the new billing process - and at what levels?

Microsoft will now enable billing for all distributors and LARs in Indian rupees and also make available Microsoft price list to them in Indian rupees. Microsoft Singapore would continue to bill from Singapore but in the Indian currency and the rest of the process remains the same in terms of Weekly Shipments from Singapore, Customs Clearance and other formalities.

Even LFRs would continue to bill through the distributors from different distribution channels.

What kind of awareness programme are you undertaking? 

We are taking a number of additional initiatives to familiarize our business partners with the new system and its benefits. The partners who are being directly transacting with Microsoft regional sales in Singapore have been made aware of the Geo INR price list. Also, Microsoft regional sales had conducted a 2-day workshop, one with all the business heads of distributors and LFRs and the other with the operational heads of these companies.

Then, we have left it to the distributors and LARs to take the message forward. Since they would be transacting to the next level of partners, it would be very appropriate for them to take the message by training the partners.

What benefits this new pricing policy would carry for a partner?

With this new billing currency in place, the billing process gets more predictable and consistent, both with Microsoft regional sales in Singapore and the customer without worrying about the dollar price going up or down.

Microsoft does not fix the end-customer price, but our channel does. What we are hoping is based on the consistency that Microsoft regional sales in Singapore is making to the channel partners, that consistency and integrity will be passed on to the customers so that they can plan the budget without worrying about the fluctuation in the dollar rate. Considering the volatility of the fluctuation of the dollar, he keeps the margin in his mind and then presents the solution and then puts the price. Now if Microsoft is helping them and streamlining the pricing, they are offering them, they are not afraid of that fluctuation, and if they are not afraid then they would focus better on their business rather than the margins, and that will help the end-customer eventually.

This would help the partners to focus more on business and the negotiation would be very healthy.

Why did you choose 1st May for the transition instead of the new financial year?

The closing of financial year is March for many of our partners operating throughout the country. So, we want to keep the date after 31st March. Secondly, June is fiscal closing for Microsoft. So to avoid the conflict, we chose May.

One key message that I want to share is that there have been a number of changes considering India as an important market. The market offers ample opportunities both for us and our channels. Microsoft is really working towards tapping on the full potential and the opportunity that exists in the country. 

For more contact:
beenish@varindia.com