Partners: ‘Aggressive’ Microsoft Cloud Renewal Outreach Is Doing Damage
‘This is not acceptable and is not working the way that they (Microsoft) think it is,’ one Microsoft solution provider said.
In February, the customer of a Mid-Atlantic-based Microsoft solution provider received a cold call from a person in Costa Rica referring to herself as a Microsoft “solutions consultant” who wanted to discuss the customer’s upcoming cloud subscription renewal.
But if that wasn’t bad enough in the partner’s view, after talking to the customer, the solutions consultant sent a low-quality lead through the Microsoft Partner Center portal to the existing Mid-Atlantic Microsoft partner, who wished to remain anonymous.
“The lead that they submitted had less licenses than the client has now,” the Mid-Atlantic partner told CRN in an interview. “Plus, they have no idea that the client has backups and other services with other providers. It’s insane.”
The partner said that their client was angered by the whole experience, finding it a waste of time. “This is not acceptable and is not working the way that they (Microsoft) think it is,” the partner said.
The solution provider told CRN that Microsoft is also doing damage to his trusted adviser role by recommending higher-tier Microsoft 365 licenses like E5 to customers when those licenses go well beyond what the customer needs.
“Business Premium is a great solution for them,” he said. “If they don’t need it [E5], why sell it to them?”
Multiple Microsoft solution providers have told CRN about a recent wave of phone calls, emails and even unsolicited calendar invites to their customers by Microsoft contractors without prior notice to partners. CRN has reviewed emails from these contractors dating back to December 2024.
Partners characterize the contractors’ full-court press on cloud renewals as “way more aggressive” than they have seen in the past from Microsoft to get customers to adopt higher-tier licenses and a broader range of Microsoft products.
Partners said these communications—which, they say, violate the primary tenant of channel sales that a vendor should not go behind a partner’s back to sell to an established customer—jeopardize their role as trusted advisers.
Microsoft Cloud Renewals
The current wave of activity by these Microsoft contractors—also known as “solutions consultants,” “international suppliers” and “V dash” contractors because of the “v-” naming convention that goes ahead of the username in their Microsoft.com email addresses—is meant to help partners with cross-selling and up-selling Microsoft products and services, especially in the SMB space, people familiar with the operation have told CRN.
The Mid-Atlantic solution provider is one of five partners to talk to CRN about the calls and emails to their customers from Microsoft contractors without partners’ prior knowledge based on upcoming end-of-sale or renewal dates.
Four Microsoft solution providers told CRN they are furious about the outreach to their customers and the sellers’ methods, but that they wished to remain anonymous to preserve their relationship with the software giant.
Microsoft VDS Identifies ‘Up-Sell And Cross-Sell Opportunities’
In an email to CRN, a Microsoft spokesperson said that the communications are related to the Redmond, Wash.-based tech giant’s Vendor Digital Sales team. The VDS team “identifies up-sell and cross-sell opportunities with small and medium businesses, connects those opportunities to partners, prioritizing the customer’s preferred partner, and develops them jointly through a consultative approach.”
“Quoting, billing, and implementation are all done by the partner,” the spokesperson said. “The program, which has been in existence for more than five years, provides technical expertise at no cost to help partners increase win rates and maximize deal sizes.”
People close to VDS have told CRN that the program is global and meant to work similar to a pre-sales customer-facing engine, providing demonstrations, cloud and security evaluations, and more. VDS also receives referrals from solution providers through Partner Center and passes upwards of hundreds of thousands of leads to partners worldwide.
One person close to VDS denied that there has been a ramp-up in activity from the group.
‘Not The Right Thing For The Customer Right Now’
A Microsoft solution provider in the Southeastern U.S. told CRN that a VDS seller called their customer late last year and disrupted their attempts to sell Copilot. The customer, who was historically conservative with adopting new technology, had already agreed to pilot the AI tool with a small user pool and to a timeline for progress assessments.
After learning of the VDS contact, the solution provider fought to be on the call and described it as a high-pressure, quota-driven sale to persuade the customer to buy more seats.
“That’s not the right thing for the customer right now,” the solution provider said. “This shift in Microsoft’s approach seems to prioritize short-term results over sustained partnerships.”
The Southeastern Microsoft solution provider also did not like the VDS seller referring the customer to Microsoft’s “expert technology consultants.” The solution provider believes that these Microsoft ETCs could take away from the partner’s own consulting engagements.
“The margins aren’t high enough with Microsoft to deal with unhappy customers,” the provider said.
Unexplained Calendar Invites
A Microsoft solution provider in the Northeast told CRN that a VDS seller kept sending meeting invitations to a customer without explanation.
“That was just ridiculous,” he said. “You’re just pissing off the customer.”
When the solution provider talked to their Microsoft partner development manager, the PDM didn’t know anything about VDS, the solution provider said.
Multiple Microsoft solution providers also told CRN they are concerned that VDS sellers are using calls and emails to introduce customers to new ISVs that the partner hasn’t vetted.
For example, multiple VDS sellers recommended to Microsoft customers a Toronto-based ISV called Block 64, which provides an IT discovery and insights platform.
The company’s website lists among its vendor partners Microsoft and Amazon Web Services. Its solution provider partners include CRN 2024 Solution Provider 500 honorees SoftwareOne, Zones, SHI, Insight and Connection.
Block 64 CEO James Corless told CRN in an email that he is “not surprised that we are mentioned by Microsoft suppliers; in fact I am encouraged to hear that Block 64 is being mentioned more often.”
The ISV has worked with Microsoft in multiple global regions and various programs since about 2018, Corless said. Block 64 doesn’t have an agreement with VDS, but it provides their teams with “ongoing training and technical support on behalf of Microsoft,” Corless said.
Block 64 isn’t a Microsoft Cloud Solution Provider and doesn’t compete with CSP partners, he said. The company was founded in 2012, has System and Organization Controls Type II (SOC 2)-certified offers and is in more than 20,000 end customer environments in 80 countries, Corless said.
“Block 64 is licensed by many CSPs for use in the delivery of their own [IT asset management/software asset management], cloud migration and security services,” he said. “We extend CSPs’ capabilities in these areas. … This initiative should be viewed as an opportunity for CSPs, as many of our recommendations result in new opportunities for CSPs to provide additional services to their existing customers.”
VDS Sellers Can’t Transact With Customers
Addressing specific concerns by Microsoft solution providers angered with the VDS program who spoke with CRN, a people close to the program said that VDS is not meant to take away partner engagements and VDS sellers do not have the ability to transact with customers.
Their inability to transact with customers comes across in some of the VDS emails reviewed by CRN, where VDS sellers tell customers to make final subscription renewals with their solution provider. VDS sellers also should not contact month-to-month subscription customers on a monthly basis, the person said.
VDS sellers go directly to customers because many customers work with multiple partners managing various Microsoft products and services, the person said. This allows the VDS team to confirm with the customer which partner they want to work with if they further engage VDS.
For customers and solution providers especially wary of unsolicited calls and emails coming from scammers, they can use Microsoft tools to verify the VDS seller does indeed work on behalf of Microsoft. The sellers are also not auditing customer licenses, a practice that stopped years ago, said the person close to the program.
VDS contacts customers not only on cloud renewals, but also for Enterprise Agreements (EAs) as well, the person said.
Over the past two years, VDS has tried to gain more visibility with solution providers and distributors and spread more awareness of its capabilities, the person said. But the person acknowledged that some partners still might not know about the program.
People familiar with the VDS program said they expect Microsoft to keep investing in the program. The VDS program played a big role in the rollout of Microsoft’s Copilot offers that launched in January 2024, as an example.
People close to the program also said that multiple partners have shared positive feedback on the program.
One West Coast Microsoft partner who asked for anonymity to share emails VDS sellers sent to end users told CRN that he believes the customer contacts are helpful.
These contacts directly from the vendor could motivate customers to actually upgrade their subscription if they’ve been resistant to partner recommendations.
“It’s a huge issue that partners get upset at this stuff,” he said. “See the positive. Without Microsoft, many customers wouldn’t do anything.”
The Accenture Connection
A person close with VDS confirmed that a number of the VDS workers are contractors working for Accenture and other outsource partners. CRN has reached out to Accenture—No. 1 on CRN’s 2024 Solution Provider 500—for comment, but had not heard back at press time.
Many of the international suppliers live in South American countries including Costa Rica and Colombia, based on a CRN review of their profiles on Microsoft-owned social network LinkedIn.
VDS sellers also prioritize incumbent customer partners, the person told CRN. Sellers’ success is based on when partners close the deal.
Sherweb: VDS Has Helped With Up-Selling And Cross-Selling
Michael Slater, head of sales for Microsoft and cybersecurity at distributor Sherweb, told CRN in an interview that he chalks up partners taking more notice of VDS activity to how many subscription dates happen around the start of the year, especially after migrations under Microsoft’s new commerce experience (NCE) program that rolled out starting in 2022.
In his experience, VDS has helped spur up-selling and cross-selling conversations with Microsoft customers, especially with more complex Microsoft deals such as those involving the Fabric data analytics platform or enterprise resource planning (ERP). He’s also never seen a partner lose a customer due to a VDS call, Slater said.
Like solution providers, Sherweb does not receive advanced notice before a VDS seller contacts an end customer, he said.
Sometimes VDS sellers are more up-to-date on newer Microsoft offers that some solution providers can miss due to how often Microsoft updates products and releases new deals, he said.
“Microsoft does see success in doing this,” he said. “I always think that the best solution for partners is to come to the table with the vendor, and then we all have a discussion together.”
The vendor has put into action a variety of suggested fixes and changes to the program, Slater said. He said he is working to better explain the program to Microsoft solution providers so that they are not surprised by the activity, which shouldn’t distract from investments the tech giant has made in supporting partners.
“Microsoft is still one of the most channel-friendly vendors out there,” he said.
Multiple Microsoft solution providers told CRN that their workaround to unwanted customer contacts by Microsoft VDS is never listing customer phone numbers and email addresses in Microsoft portals. Instead, the solution provider puts their own contact information or redirects Microsoft emails to customers to an email account managed by the partner.
Sherweb’s Slater warned against this practice, especially for partners that might have to now manually track multiple tenants. “Is it even worth it at that point to do that?” he said. “It’s definitely not best practice to do that.”
Recent VDS Job Listings
Multiple recent online job listings by the tech giant shed some light on the role Microsoft VDS plays with the channel.
One job listing that is no longer accepting applications calls for a sales program lead making at least $106,100 in U.S dollars. The lead “will be accountable to the SMB Americas business and be the SMB customer advocate from Vendor Digital Sales engagements across the organization.”
The lead will be “part of local subsidiaries or Digital Sales centers around the world” and “will support a dedicated set of customers in identifying and achieving their business objectives through best-in-class digital engagement and partner co-selling,” according to the job listing.
This lead also “develops expertise in the local partner ecosystem across customer segments to help identify opportunities to improve sales revenue.”
A separate job listing for a Microsoft VDS director that is online but no longer accepting applications describes the role as part of Microsoft’s Small, Medium, Enterprises and Channel organization. In February, Ralph Haupter took over the newly formed SME&C as president.
The director—who could make at least $130,000 a year, according to the listing—would be tasked with advising “customers and partners on leveraging digital and AI transformation solutions, ensuring successful value realization and fostering innovative opportunities across business units,” according to the job listing.
The hire also “influences and works across segments, partners, and teams to drive growth and transformation, ensuring alignment on account plans, defining sales execution, and fostering an inclusive organizational culture.”
A third online job listing for a “vendor digital sales (customer lifecycle motion) strategy lead” is no longer accepting applications and offered at least $154,500 in annual pay.
The post says that Microsoft has “set out with the purpose to empower our customers through the unique value of the Microsoft cloud by building a globally led, digital-first scale organization aligned with partners.”
The strategy lead will “be responsible for the sales strategy of VDS CLM motion and execution through the Field team, leveraging an outsourced digital sales model” and “provide updates and report key metrics needed to assist sales and partner teams to drive the sales business forward,” according to the job listing.
