But Kent argues that this approach is now wrong: "Our major partners see Microsoft as high volume, low margin product which they have to sell. Look them in the eye and there is little real loyalty." In other words, these partners have become commodity fulfillers of orders. "We are better off talking to small dealers or influencers, who could easily double their sales of Microsoft products, rather than to big order fulfillers who have achieved saturation."

"Look them in the eye and there is little real loyalty. They sell Microsoft because they have to."

Microsoft recognised the way the wind was blowing a few years ago, and massively reduced the marketing development funds for the big boxshifters. "Often the big resellers simply didn't know how to spend the money. I went on many go-karting days - I became pretty good at go-karting, but this doesn't help our sales."

Instead money was deflected into programmes to reach end-users directly or to support Microsoft's drive at the small and medium business marketplace.

"We were sending out expensive salesmen to look at returns. Our managers became messengers."

But cutting MDF has led to more problems: "If you cut your marketing coop budgets, what else have you got to talk about? We were sending out expensive salesmen to look at returns. Our managers became messengers. They were no longer interfacing with senior management and top salesmen, because they no longer held marketing budgets. Instead, they were dealing with negative issues all the time."

Microsoft also had to deal with the expectations of the major resellers and distributors: "Their presidents were used to meeting the head of Microsoft Europe, but now we had to say to them 'Umm, he is busy. How about this guy?' It sounds farcical, but it was a real problem."

All this means that Microsoft will have to adopt a new approach. Kent says this is currently work in progress. For him, the big issue is how to identify the influencers in the small and medium business market and how to work out ways of account managing them. There is some uncertainty as to whether this group really even exists. "In a recent trial in Germany we asked end-users who bought from us directly for the names of their software adviser to whom we made a fee. In fact, they almost always named their local PC dealers."

Having identified them, Microsoft will have to find a viable way of working with them. Kent says: "For the most part, they are probably too small to warrant face-to-face contact. There are so many of them that any incremental increase in cost per capita could be pretty problematic."

Ultimately, Microsoft faces two different challenges. The first is how to compete with Linux, a free operating system that everyone loves. Here, the answer has to be some form of network marketing, using the web to provide support and to create an organic community similar to Linux fans.

Secondly, Microsoft needs to find a way of moving its existing customer-base to a subscription-based model, where they buy the software on a pay-to-use basis, rather than through one off licence fees.

Neither challenge is a push-over.