4
Jun

Succeeding at Enterprise Software Sales Still Requires Sales People Who Can Do Something More than Just Present Products

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).

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. 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

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved

3
Jun

Is There a Best Background for an Enterprise Software Business Manager?

Justin Althoff is Microsoft’s President for the North American Market. Mr. Althoff was recently interviewed by Sterling Auty, Software Technology Analyst at JP Morgan. The interview took place on May 20, 2014, during JP Morgan’s Technology, Media & Telecom Conference. Mr. Althoff prefaced his remarks with some biographical notes: he has been at Microsoft for a little more than a year, spent 14 prior years at Oracle, and, before, at EMC. What is the significance of Mr. Althoff’s background, given his role at Microsoft?

I am asking this question for a couple of reasons:

  1. I spent seven years in the contract consulting and executive search business, from 1994 to the end of 2001. I placed a lot of talented individuals at IBM Corp, D.E. Shaw & Co., First Rain, and Duck (now On2). So I tend to listen as individuals recount background experiences
  2. I spent some time last week reviewing Salesforce.com’s most recent quarterly earnings webcast and took a look at the background of Salesforce’s current President and vice chairman, Mr. Keith Bloch, who, coincidentally, spent a lot of time at Oracle.

There is one other notion I have come to believe in, which is also motivating me to look further at the importance of background: this “truism” goes as follows: the same small set of people take on all of the senior responsibilities for software products targeted to specific markets (in this example, enterprise markets for productivity software). Any changes are really a matter of musical chairs. An example of this truism, at work are all of the ex Lotus sales folks, late of IBM, who somehow ended up at Microsoft selling SharePoint.

Bottom line? I’m not sold on the value implicit to following this “truism” for the businesses doing the hiring. When I consider Salesforce.com and Microsoft Dynamics CRM as direct competitors, I do not take much heart identifying the same experience set, and, in all likelihood the same methods, and style, at work for each of the President’s heading up these organizations.

But I certainly understand the importance of familiarity with a market and its participants as a metric for judging the suitability of specific candidates to head up a software business like Microsoft North America. I am merely questioning what the right depth of this “familiarity” experience ought to be, especially when the role also requires, to a significant degree, a successful track record as someone who disrupted outdated IT approaches and solutions sometime in the past.

I am not sure I know the answer to this set of questions, but I am very comfortable pointing to them as important points of consideration for ISVs doing the hiring.

Ira Michael Blonder

© IMB Enterprises, Inc. & Ira Michael Blonder, 2014 All Rights Reserved