Microsoft’s Cloud Channel Begins to Mature

Microsoft’s Cloud Channel Begins to Mature

Microsoft's Cloud Channel Begins to MatureMicrosoft’s Cloud Channel Begins to Mature

A study finds that Microsoft partners are generating revenue across multiple services, especially in cloud infrastructure management and cloud app deployments.

Top Cloud Practices Offered by Microsoft PartnersTop Cloud Practices Offered by Microsoft Partners

Cloud infrastructure and management: 78%,
Cloud application development: 53%,
Mobility and security: 46%,
Data platform and analytics: 43%

Age of Microsoft Cloud PracticesAge of Microsoft Cloud Practices

Just over half of these practices are less than two years old. Nearly all offer Azure, and about 75% offer Office 365. Fewer than half offer Enterprise Mobility + Security or CRM Online.

Percent of Revenue Driven by the CloudPercent of Revenue Driven by the Cloud

An average of 20% of overall revenue is driven by cloud-based products and services. Value-added services—including Project Services, Managed Services & Packaged Software—represent 74% of partner revenue in the SMB space and 82% in the enterprise.

Cloud ProfitabilityCloud Profitability

Two-thirds of the partners surveyed said less than one year was required for their company to reach profitability on new practices. About a third cited one to two years or longer.

U.S. Partners' Top Barriers to Cloud AdoptionU.S. Partners’ Top Barriers to Cloud Adoption

Keeping employees up to speed on latest tech: 32%,
Generating leads: 31%,
Overcoming customer objections: 27%

Cost of Cloud TalentCost of Cloud Talent

In the U.S., hiring a cloud architect costs an average of $125,000; sales and marketing professionals and developers are paid about $100,000 each.

Sources of LeadsSources of Leads

Partners surveyed reported that the majority of their leads are generated by their own efforts. Microsoft is credited with providing fewer than 10% of their leads.

Top Microsoft ServicesTop Microsoft Services

Virtual machines and networking, followed by SQL Server and Microsoft Intune mobile device management, are cited as the top services layered on top of Microsoft Azure.

Top Services Partners Add to Microsoft AzureTop Services Partners Add to Microsoft Azure

Backup and storage management, followed by virtual machine management, are the top two services partners add on top of Azure.

Revenue Per Cloud Infrastructure EngagementRevenue Per Cloud Infrastructure Engagement

The median project-based revenue generated per cloud infrastructure engagement is $150,000. The median revenues for managed services and other forms of intellectual property services are $100,000 and $50,000, respectively.

Revenue Per Cloud Application EngagementRevenue Per Cloud Application Engagement

The median revenue partners generate per cloud application engagement is $200,000. The median revenue for managed services and other forms of intellectual property services is $100,000 each.

Revenue Per Data Platform and Analytics EngagementRevenue Per Data Platform and Analytics Engagement

The median revenue generated per data platform and analytics engagement is $55,000. The median revenues for managed services and other forms of intellectual property services are $30,000 and $14,500, respectively.

Revenue Per Mobile and Security EngagementRevenue Per Mobile and Security Engagement

The median revenue generated per mobile and security project engagement is $50,000. The median revenues for managed services and other forms of intellectual property services are $50,000 and $20,000, respectively.

Michael Vizard
Michael Vizard is a seasoned IT journalist, with nearly 30 years of experience writing and editing about enterprise IT issues. He is a contributor to publications including Programmableweb, IT Business Edge, CIOinsight, Channel Insider and UBM Tech. He formerly was editorial director for Ziff-Davis Enterprise, where he launched the company’s custom content division, and has also served as editor in chief for CRN and InfoWorld. He also has held editorial positions at PC Week, Computerworld and Digital Review.

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