Microsoft Maps Out Its Partner Priorities

By Michael Vizard
Microsoft cloud partners

Toronto—As Microsoft gears up for its new fiscal year, the tech giant revealed its six top sales priorities for both partners and its own internal sales organization.

Leading the list is driving digital transformations. Following in quick succession are accelerating cloud adoption, propelling Windows 10 enterprise deployments, generating SQL Server 2016 growth, driving independent software vendor (ISV) and systems integrator (SI) momentum, and making experiences come to life through hardware solutions

Speaking July 13 at the Microsoft Worldwide Partners Conference here, newly appointed channel chief Gavriella Shuster told partners that Microsoft is prepared to help them achieve those goals by bringing the total number of people that Microsoft has in the field to support partners up to 3,500 dedicated employees. That represents an increase of 500 employees from last year's total.

Microsoft also made it clear that the amount of support that partners will receive will be in direct proportion to the amount of intellectual property they bring to bear around Microsoft cloud services. Rather than channel partners merely reselling those services, Microsoft is looking for partners that can add value using some form of their own IP.

In some cases, that means developing applications. In others, it may mean creating customized workflows for a particular vertical industry. In both cases, Microsoft is looking for partners that can drive the consumption of cloud services, such as Microsoft Azure and Microsoft Office 365.

"Reselling is now table stakes," said Chris Chute, an industry analyst with IDC. "Microsoft really wants to focus on partners that have developed their own IP."

Aiming to make the partnering process more efficient, Microsoft pledged to make it easier for ISVs to partner with the Microsoft channel in addition to making it possible for gold ISV partners to make use of the Microsoft logo to market their offerings to end customers. Microsoft is also moving to provide a single console through which all partners can market their services through myriad online stores that the company has created. In addition, partners can now connect their own online marketplace to Microsoft marketplaces.

Cloud Is the 'New Normal'

Microsoft claims that partners that generate 50 percent or more of their revenue from the cloud are on average generating $5.87 for their own services for every dollar of Microsoft services they sell. Aiming to compete more aggressively against other cloud service providers, Microsoft is looking to motivate the channel to drive up its share of the overall cloud market.

Microsoft officials said that today there are 17,000 partners participating in its Cloud Service Provider (CSP) program, which last year resulted in the sale of more than 3 million cloud seats. Microsoft also claims that its partners, on average, enjoy 19 percent higher margins when deploying solutions on Microsoft cloud platforms than when those same solutions are deployed on another cloud.

Shuster said that what makes cloud partners successful comes down to four things: they are well differentiated; have modernized their sales and marketing efforts; have optimized their own internal operations to the point where IT services are delivered using a factory model; and focus on the lifetime value of a customer. The days of selling an IT solution one time, said Shuster, are now clearly over.

To help partners achieve those goals, Microsoft also pledged to double the amount of compute resources it makes available on Azure for use by partners that want to build or deploy applications for their internal use. Microsoft is also opening up a new Professional Degree course through which partners can access training materials that will span a range of emerging application use cases.

In general, Microsoft is particularly focused on enterprise IT accounts where it already has a strong foothold. In Microsoft's view, getting those customers to deploy hybrid cloud computing solutions that leverage their previous investments is a clear differentiator between its strategy and an Amazon Web Services model that assumes every workload needs to run on a public cloud.

As evidence of Microsoft's success so far in that effort, the company now claims that more than 80 percent of the Fortune 500 are now using Microsoft Azure to one degree or another. Microsoft partners are now being tasked with expanding the overall Microsoft cloud footprint as quickly as possible.

"The cloud is no longer a nascent trend," said Shuster." It's the new normal."

Mike Vizard has covered IT for more than 25 years, and has edited or contributed to a number of tech publications, including InfoWorld, CRN and eWeek. He currently blogs daily for IT Business Edge and contributes to CIOinsight, Channel Insider and Baseline.

This article was originally published on 2016-07-14