During the 2014 Technology, Media and Telecom Conference, hosted by JP Morgan, Judson Althoff, President of Microsoft, North America made clear the importance of “consultative” skills, rather than product presentation, to the success of sales of Microsoft software to enterprise business.
The North America software business, for Microsoft, per Mr. Althoff’s remarks, produces approximately “$25 billion across 8,000 folks” (quoted from a transcript of Sterling Auty’s interview with Mr. Althoff, which took place during the 2014 JP Morgan Technology, Media and Telecom Conference (http://view NULL.officeapps NULL.live NULL.com/op/view NULL.aspx?src=http://www NULL.microsoft NULL.com/investor/downloads/events/JPMorganAlthoff NULL.docx)).
Like any other component of Microsoft, the North America business has been in transition. Presently the sales team works with a set of products “down to three or four Microsofts instead of 22 Microsofts when [Mr. Althoff] started from a product standpoint”. (ibid). Mr. Althoff characterized the world of the “22 Microsofts” as a terrain filled with silos, which often worked at cross purposes. The “One Microsoft” reorganization, in his opinion, which Steve Ballmer articulated over a year ago, is still ongoing and promises to alleviate a lot of the drag which beset the company under the “tyranny” of these product silos.
The sales process, as well, has changed. Mr. Althoff’s remarks described the old selling process, where Microsoft sales personnel would “try to dream up a big data project together [with customers]”. The driver behind this type of effort clearly was what I have referred to in this blog as “solution without a problem” syndrome.
According to Mr. Althoff, this approach has been changed. Now “we try to coach our sales force not to have a singular starting point, and show up with a canned pitch, but rather be much more consultative in our approach to understanding” (ibid) the challenges prospects and customers are facing.
He then went on to emphasize the importance of industry understanding to a successful software sales process: “[i]t varies quite a bit by industry, financial services, healthcare, and manufacturing.” (ibid). This response is entirely inline with comments made by Keith Block during yet another technology day sponsored by an investment bank — this time Piper Jaffray’s Media and Telecommunications Conference, March, 2014 (http://www NULL.media-server NULL.com/m/p/irj2ouvg). Mr. Block emphasized the almost critical importance of sales personnel maintaining an accurate understanding of the software requirements for specific industries, if they are to succeed.
Bottom line: despite the apparent simplicity of a new set of consumerized IT software products, usually served from the cloud, the enterprise software selling environment is still highly complex. For both Microsoft, Salesforce.com, and, I would argue, Oracle (the past employer of Mr. Block and Mr. Althoff), sales personnel with demonstrated success selling complex products are still the most likely to succeed.
Ira Michael Blonder (https://plus NULL.google NULL.com/108970003169613491972/posts?tab=XX?rel=author)
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