Significant changes are coming to Microsoft's channel partner ecosystem in 23 days.

The Microsoft channel is the largest in the world (by far), estimated to be at 500,000 partners worldwide. Much like every vendor program, a long-tail of partners and distributors make up the bulk of the numbers.

As channel chiefs know, it isn't the 80/20 Pareto Principle in our programs, where 20% of your partners drive 80% of the revenue, it is usually closer to 90/10 or 95/5.

Back in May, Microsoft announced several minimum thresholds for partners and distributors to maintain their status, effectively cutting many long tail partners.

For example, on October 1st:

--> Indirect reseller partners are required to carry $1,000 in trailing 12 months (TTM) billed revenue at the tenant level.

--> Larger partners, the revenue threshold for "direct bill" relationship with Microsoft changes from $300,000 TTM at the partner global account level to $1 million.

--> Distributors must maintain a minimum of $30 million per authorized region.

These changes will impact tens (if not hundreds) of thousands of technology services businesses around the world.

On the distribution side, a great article here from my friend Doug Woodburn at IT Channel Oxygen. (It is worth signing up for the free subscription and newsletter).

https://lnkd.in/e-_GMvff

The impact of this announcement could reduce global distribution by two-thirds; from 180 current distributors down to 60 who would make this threshold. The article talks about the flurry of consolidation/merger/acquisition talks among distributors.

This ignites (excuse the pun) the age-old debate about long-tail partners in a program. With 7+ partners surrounding the average customer, isn't the aim to reduce friction and build a bigger ecosystem of friendly partners?

In the post-transactional world, is putting a financial threshold for resell the wrong approach when most partners are building out their co-selling, co-innovation, and co-keeping muscles?

What do you think?