Microsoft: Cloud-First Partners Continue to Outperform OthersBy Darryl K. Taft | Posted 2014-05-06 Email Print
A new study from Microsoft and IDC shows that partners who have added cloud computing to their mix of services outperform other non-cloud partners.
Moreover, there are plenty of partners that realize they need to transform their businesses due to the disruption of cloud computing, the report said. “Those who don’t will fall into the ‘boiling frog’ syndrome – comfortable in the short term, but less so once the market starts ‘boiling’ faster and faster. They will essentially get left behind. Business leaders should use market data around new buying behavior for cloud and managed services to trigger the discussion around a re-assessment of the business. The objective is to set a new strategy for the organization, invigorate the sales teams and get the employees behind it.”
However, according to the IDC study, partners who sold Microsoft’s Business Productivity Online Suite (BPOS) – the predecessor to Office 365 -- in 2008 and on are clearly ahead of the game today. They have established cloud practices and have already integrated the necessary business model changes. They understand that recurring revenue is an advantage that reduces revenue fluctuations and provides a solid base to fund operations. These partner sales teams have already adapted and learned to lead with the cloud. They also have long standing reference accounts to demonstrate their expertise.
Bibby also said the study showed that partners need only be one or two steps ahead of their customers to be successful providing cloud solutions. “It’s never too late to get into the cloud,” he said.
The IDC report offers “practical advice” for partners about how to move to a cloud model and what to focus on, said Josh Waldo, senior director of Microsoft’s Worldwide Partner Group, in an interview with eWEEK. “We continue to help the channel and our partners to move forward with us. Ninety-five percent of Microsoft’s revenue comes through the channel; this is a partner-driven business. Moving to the cloud gives partners a way to up-level their consulting.”
To ease the way, Microsoft has geared its investment to help partners move to the cloud, including evolving licensing terms to help them move their business model to the cloud. In a blog post from November, Waldo explained the changes.
“Rolling out managed services is a very strategic long-term effort that can yield annuity revenue based on billable and packaged services, as well as a high overall gross profit,” he said. “It also creates opportunity for partners to develop their own IP/Apps on cloud-enabled devices and to sell the value to customers. Our responsibility is to help partners be successful in this new model. That materializes based on our investments and our business model platform. I’m excited to share with you that Microsoft has recently announced a significant change to the Enterprise Agreement to make it easier than ever for you to take advantage of the power of Windows Azure within the solutions you provide to your end-customers.
"The Microsoft Enterprise Agreement (EA) has always been the best way to offer our enterprise customers the most economical means to plan for the future and get the most value using Microsoft technology. We are now extending that benefit to our partners – not just to take advantage of the benefits of the EA for your own use, but also for the use of your customers who are consuming your managed services and IP.”