Guild Companies

Microsoft has long had aspirations to take a bigger chunk of the enterprise software space, but has lacked enough sales people with enterprise expertise to do so. Now, Microsoft is building out and reorganizing its sales force around 12 specific industries, such as retail and healthcare, while at the same time, adding 450 new salespeople--the company's biggest sales force increase in more than ten years--at a time when most software companies are cutting back.

Up to this point, Microsoft's sales personnel have concentrated on selling specific products to whoever would most likely buy them. Under the new plan, sales representatives will sell a variety of products to customers in specific industries. Microsoft said the move was made in order to position itself to better serve its customers, whose computing needs may be different than customers in other areas of business. The company said the changes will extend to other areas, including service, support, and marketing.

There is change underway throughout Microsoft. In April, a management shake-up saw Rick Belluzo, Microsoft's president and chief operating officer, leave the company. Shortly after, Microsoft was divided into seven product areas. Segmenting the sales force by industry is a continuation of this management shakeup.

The new concentration on vertical industries should help Microsoft's transformation from a consumer software company into an enterprise application and infrastructure provider. Most enterprise software providers break their software out by industries, and a large number of them offer industry-specific solutions that are tailored to do a specific job and are backed by sales, service, and support people who are specialists for that industry.

The 12 vertical industries that Microsoft will be targeting in the United States include financial services, telecommunications, state and local government, federal government, education, retail, healthcare, automotive manufacturing, high tech manufacturing, oil and gas, media and entertainment, and professional services. The Redmond, Washington, company is also reassigning 115 people into the new industry-specific sales and support organizations it has created.

At the same time, Microsoft is reassigning its technical specialists into one of three areas--servers, developers, or knowledge workers--with walking orders to work with Microsoft's consulting services personnel in helping customers to create new applications, including those using Microsoft's .NET infrastructure, and to deploy them.

The changes in Microsoft's sales structure for the U.S. could be a indication of things to come for the company's international operations, which show promise in Western Europe, where Microsoft hopes to wrap up its acquisition of the Danish ERP vendor Navision, as well as the Far East. In late June, for example, Microsoft signed an agreement with the Chinese government whereby Microsoft will pay Chinese companies $756 million over three years in return for hardware and software development and service that further the use of Microsoft products in that country.