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Wooing Microsoft

MOUNTAIN VIEW, Calif. -- So many ISVs to partner with, so little time.

Microsoft may say it loves its ecosystem, but software companies that want to get next to it have to go through a winnowing process that's a lot like being on "The Bachelorette."

On the television show, bachelors undergo a series of tests designed to demonstrate they're worthy and desirable. At each stage, a few more are eliminated, while the remaining suitors get to spend increasing amounts of quality time with the Bachelorette.

Would-be Microsoft partners should expect a similar process, Microsoft executives told a group of entrepreneurs gathered at its Silicon Valley campus on Tuesday.

Partners must work their way up a specific ladder, said Mark Barry, managing director of Microsoft's U.S. Venture Capital and Emerging Business Team (EBT). The path starts with becoming a registered member of Microsoft's partner program, then a Microsoft certified ISV, and finally, a Microsoft Gold Certified ISV.

Gold partners finally get some personal attention in the form of account management. And they need it. "It's important that you have someone to turn to as a single point of contact to help you navigate through the organization," Barry said.

There is, however, a Cinderella strategy: Get noticed by someone on the Emerging Business Team. The EBT's goal is to identify superstars among the startups, companies with technologies that could be disruptive and that rely on the Microsoft platform.

The EBT works mostly with early-stage, venture-funded companies; it also keeps in contact with VCs, letting them know how their companies might fit into or compete with Microsoft's own products.

"We are at the top of the funnel," said Dan Dodge, an EBT director. "Our job is to find the superstars who are doing something really innovative and surface them to the product groups."

The idea is to get these companies into Microsoft's partner organizations and then speed their way up the ladder, making introductions to the right people inside Microsoft's product groups.

Like the bachelors, ISVs must have tireless patience and low expectations, said Sam Jadallah, a general partner in Mohr Davidow Ventures. At the same time, it's all about building the relationship while seeking that elusive status Microsoft calls "engagement."

Engagement can mean many things: being able to talk to one of Microsoft's field reps; getting one-on-one technical support; having a customer case study published by Redmond's PR machine; or -- rarely -- getting introduced to actual customers.

"It's about starting small with Microsoft, focusing on what's the most important thing and getting some traction," Jadallah said. Startups should figure out which programs are relevant for it, pick one or two and focus on maximizing those programs. "You have to figure out how you fit in the ecosystem, but it's very unlikely that they don't have a program that works for you."

Next, he said, startups should align their companies with Microsoft's priorities, a secret, unpublished list that CEO Steve Ballmer sends around in August. The emerging business team will help vetted companies understand how they fit.

Dealing with Microsoft can be complex and Byzantine, Jadallah admitted. But persistence can really pay off.

Dan'l Lewin, corporate vice president of .NET business development, said that the 50 or so companies that EBT has worked with in the past three years have created about $1.6 billion in shareholder value.

"For every $1 that we make, somewhere between $7 and $11 is made by someone else in the value chain," he said.

Emmett DeMoss, CEO of Visual Network Design, maker of the Rackwise add-on to Visio, said his company began shipping products before it had a contract with Microsoft. However, once it developed a customer base, the Visio business unit printed 20,000 Rackwise CDs and distributed them to Visio users around the world.

"Since [the CD] came out," DeMoss said, "the number of hits [to our service] and potential clients has tripled or quadrupled."

He should send Microsoft a rose.