Stop Chasing Managed Accounts: The Real Opportunity for Microsoft Partners is in the Unseen SMBs

Most Microsoft partners targeting the SMB segment are chasing the wrong accounts.

They’re running headfirst into the same crowded space: managed accounts. The ones already on the radar of Microsoft sellers. The ones with enterprise-scale complexity but enterprise-level competition, too.

It feels like the obvious choice. If Microsoft is already engaged, surely it must be a good account, right?

But that mindset — while understandable — is killing your growth potential.

Here’s what most partners are missing:

Microsoft has identified a $661 billion opportunity in the SMB segment for FY25 and beyond.

This isn’t theoretical. It’s not buried in some analyst report.

Microsoft has explicitly called out SMB as a core strategic motion — and the vast majority of that $661B sits in unmanaged, underserved, and overlooked accounts.

• No Microsoft seller attached
• No partner in play
• No friction or bureaucracy — just unmet need

And yet… most partners are still chasing the managed accounts.

Why?

Because it feels like the fast path.

You think: “If I can just get introduced to the right Microsoft seller… if I can just land in the co-sell motion… if I can just ride their momentum…”

But here’s the reality:

 Managed accounts are already swarming with partners.

 Every ISV, every MSP, every SI is knocking on that door.

And often, Microsoft already has preferred or incumbent partners in place. Sellers are juggling quotas, incentives, territory overlap, and shifting priorities.

Even when you do get in…

You’re playing someone else’s game, on someone else’s terms.

The Shift Partners Need to Make

If you’re serious about growing your Microsoft practice in FY25, especially in the SMB space, you need to change your motion — from reactive to proactive, from crowded to greenfield.

Here’s what that looks like:

✅ 1. Go Where Microsoft Isn’t Already Selling

Stop trying to piggyback on managed account activity. Instead, identify accounts with no Microsoft seller involvement.

These accounts often:

• Still rely on on-prem infrastructure
• Lack modern endpoint protection or M365 deployment
• Are out of compliance without even knowing it
• Need help but don’t know where to start

When you show up here, you’re not one of many — you’re one of only a select few.

You’re not fighting to be heard — you’re being the voice that brings clarity and vision.

✅ 2. Reactivate Customers You’ve Already Helped

You’ve already delivered projects. Migrations. Licensing deals.

What happened to those customers?

They may not be transacting today — but they remember you. And more importantly, they trust you.

Look at:

• Past project customers who never moved to managed services
• CSP customers who aren’t using what they own
• Former clients who’ve gone silent — but still need security, Copilot readiness, or AI guidance

The path to net new revenue often runs through reactivation, not reinvention.

✅ 3. Expand Based on What SMBs Already Own

Most SMB customers are underskilled and underutilizing their current Microsoft stack.

They might own:

• Microsoft 365 E3 or E5 with Defender or Purview, unused
• Azure AD Premium without conditional access policies enforced
• Copilot licenses — but no idea how to prepare for rollout

You don’t need to sell more SKUs.

 You need to unlock value from what they already have and show them a path to a better future.

There are excellent margins are in adoption, enablement, and security remediation — not just the initial license.

Objection Handling: "But Unmanaged Accounts Have Low Margins"

You’ve probably heard (or said):

“It’s hard to upsell to unmanaged accounts. Margins are too low.”

Here’s the counterpoint:

Margins are low if you’re just reselling.

But if your value is:

• Delivering structured assessments
• Running Copilot readiness or Zero Trust workshops
• Offering MSP services that drive proactive value and measurable outcomes

You’re building recurring services that scale and stick.

 You’re not depending on a 3-point CSP margin — you’re commanding 50–70% margins on service.

Objection Handling: “How Do You Find Unmanaged Accounts?”

That’s the million-dollar question. And it came up in the comments:

“Most partners don’t know where those accounts are where Microsoft doesn’t have coverage.”

Fair point.

But there are signals — if you know where to look:

• Tap into your own customer database: look for accounts that haven’t transacted recently or never moved beyond their first project.
• Use LinkedIn Sales Navigator to target companies by size, region, and tech stack — and cross-reference them against Microsoft’s partner and seller motions.
• Leverage Microsoft Partner Center to identify gaps in vertical or regional coverage.
• Align with industry verticals or subregions where Microsoft field sellers have less presence — and build plays tailored to their unmet needs.

Or, go old school: pick a niche, build a playbook, and start outbound. The opportunity isn’t hidden — it’s just untapped. Heck, if your not sure where to start, do a search of all companies less than 250 employees that are headquartered within 75 miles of you, that’s a place to start!

The Minority Mindset Wins

There’s a quiet group of partners who are thriving in the unmanaged space.

 They’re not shouting about it — but they’re building real, scalable businesses away from the noise.

While everyone else is crowding into the same arena — waiting for handoffs and hoping for introductions — the growth-minded partners are carving out space where nobody’s playing.

They’re creating demand.

 Activating their own pipeline.

 Becoming the go-to partner in their chosen niche.

And eventually, when Microsoft does show up to the table?

Guess who they’ll see as the trusted voice?

You.

Final Thought: SMB Success Is Built, Not Granted

You don’t earn success with Microsoft by sitting back, waiting for co-sell.

You earn it by being visible before Microsoft notices — by solving real problems in accounts no one is looking at.

SMB isn’t a compromise segment.

 It’s not “less than” enterprise.

It’s the engine of Microsoft’s next wave of cloud and AI growth.

And the partners who recognize that — and adjust their go-to-market accordingly — will be the ones who win in FY25 and beyond.

About the Author

Rob Fegan helps Microsoft partners go from invisible to indispensable — by aligning to Microsoft's ecosystem, co-sell motion, and field engagement strategy.