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Officials shared the road map for the new program during the company's inaugural Marketplace Summit.
November 17, 2022
Microsoft’s ISV Success Program, created to let partners drive sales through digital marketplaces, is now available worldwide in public preview. At Microsoft’s inaugural Marketplace Summit this week, company officials shared their road map for the new program.
The ISV Success Program is a critical component of the new Microsoft Cloud Partner Program. Microsoft has built the program around shifting software sales and distribution through more efficient digital marketplaces. Since revealing the ISV program during this summer’s Inspire partner event, more than 1,000 ISVs have participated in the private preview.
Charlotte Yarkoni, Microsoft’s president for commerce and ecosystem, said the marketplace would help partners accelerate growth and cash flow.
Microsoft’s Charlotte Yarkoni
“We are putting marketplace at the center of our ISV and partner strategies,” Yarkoni said during Microsoft’s Marketplace Summit. “We are at an inflection point in marketplace adoption.”
Citing Bessemer Venture Partners’ research, Yarkoni said marketplaces will become mainstream in 2023. Bessemer Venture Partners forecasts cloud marketplace revenue to grow from $8 billion this year to $50 billion in 2025. At that point, 80% of all sales will transact through digital channels, Yarkoni noted.
“Once just an experiment, a side hustle between cloud providers and partner alliance teams, is now becoming a core go-to-market strategy, top of mind for CEOs, CROs investors and boards,” she said.
According to Yarkoni, Microsoft’s ISV Success Program gives access to Microsoft’s sales force of 35,000 people and 90,000 cloud services providers (CSPs), or they can sell direct via digital storefronts. The new program includes marketplace rewards, which give ISVs listing optimization, marketing support and cloud credits calculated on sales.
Yarkoni showcased a participant in the private preview, Wiz, a fast-growth startup that provides cloud-based threat detection services. The two-year-old startup has grown to over $100 million in annual recurring revenue (ARR) in 18 months. The company’s co-founder and CEO, Assaf Rappaport, said Wiz couldn’t have grown ARR that fast without the Azure Marketplace.
“For us, this is the main distribution channel,” Rappaport said.
Initially, Rappaport didn’t expect that to be the case, but a major customer insisted on going through the marketplace.
“A CISO told us, ‘It’s going to go through the Azure Marketplace; otherwise, I’m not going to do business with you,’” he said. “That’s where our customers are.”
As Microsoft continues to roll out the ISV Success Program, four key teams must work together to drive cloud marketplace success for ISVs, said Techaisle industry analyst Anurag Agrawal. The teams are sales operations, partner marketing, business development and sales alliances.
Techaisle’s Anurag Agrawal
“And Microsoft has yet to demonstrate that it has built that cohesion within its organization,” Agrawal noted.
Microsoft announced that ISV Success Program participants would be eligible for up to 50 hours of business and technical consultations for applications with higher estimated cloud consumption. According to Anthony Joseph, Microsoft’s VP of marketplace and ISV journey, the offering is set to become available in private preview soon.
“The core package has a retail value of over $125,000 and offers valuable one-to-one consults, while the expanded package has a retail value of over $145,000, with up to 50 hours of one-to-one consults,” Joseph said.
Jake Zborowski, general manager of Microsoft’s commercial marketplace, outlined some of the program’s features that are now available. Among them are the ability to configure multiyear terms for both SaaS and virtual machine deployments. Both are available on Microsoft’s new private offers platform, which allows custom pricing.
Microsoft’s Jake Zborowski
“Enterprise sales and private are the areas where there is maximum traction,” Techaisle’s Agrawal said.
According to Techaisle research, 60-70% of enterprise deals are through private offers, midmarket is 40-60% private, and SMBs are predominantly public, Agrawal noted.
“And Microsoft has cleverly avoided focusing on SMB customers,” he said.
The private offers plan allows partners to offer customized programs and pricing configurable in the Microsoft Partner Center.
“Our aspiration is to extend beyond our own user experience and portal to allow you to actually manage and manage offer creation and deal-making and your own systems and tools,” Zborowski said.
Yarokoni said private offers are the key to closing seven- and eight-figure deals via the marketplace. Over the past year, Yarkoni said Microsoft saw a nearly 300% rise in build sales on SaaS apps, a 319% increase in customers buying with consumption commits, and a 200% increase in private offers sold through partners.
Microsoft has released APIs for publishing and creating private offers, Zborowski added.
“These APIs are fully documented and are directly available to our partners and to companies who build on top of our marketplace enablement,” he said.
During the past nine months, Microsoft has completed an overhaul of its lead generation platform. Now, Microsoft is generating more leads through those marketplaces, Zborowski noted. Zborowski said more than 4 million unique users visit its web storefronts each month, resulting in 1.7 million leads for partners.
Jeffrey Schwartz has covered the IT industry for nearly three decades, most recently as editor-in-chief of Redmond magazine and executive editor of Redmond Channel Partner. Prior to that, he held various editing and writing roles at CommunicationsWeek, InternetWeek and VARBusiness (now CRN) magazines, among other publications.
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