Microsoft Maps Out Its Partner PrioritiesBy Michael Vizard | Posted 2016-07-14 Email Print
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NEWS ANALYSIS: Driving digital transformation and accelerating cloud adoption are top priorities for Microsoft's partners and its own sales organization.
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.