Microsoft’s channel was on roll last year and will leverage that momentum this year, prioritizing its commercial cloud business, and taking a bite out of what’s projected to be a $20 trillion digital transformation opportunity over the next five years, according to Gavriella Schuster, corporate vice president of Microsoft’s One Commercial Partner (OCP) organization.
In a State of the Channel update, Schuster highlighted that its channel ecosystem partners are already earning $9.64 for every dollar of revenue that Microsoft generates—double what was projected just two years ago. That’s 19 percent more margin than the nearest competitor, according to Microsoft. What is more, the demand for value-added services from partners is strong.
“Imagine how much more opportunity each partner can develop within their markets and capture of that $20 trillion,” she said, pointing to the company’s four solution areas: modern workplace, business applications, applications and infrastructure, and data and artificial intelligence (AI).
It's worth to note at this point that Microsoft partners generate 95 percent of the company’s revenue.
The vendor exceeded a $20 billion commercial cloud annualized revenue run rate goal it set two years ago and, is moving full speed ahead with Azure and its cloud partners. Microsoft encourages all partners to skill up, build cloud expertise, and co-sell with Microsoft, as is spelled out in its OCP sales effort. Microsoft currently has 68,000 cloud partners, a 33 percent year over year increase. The number of partners transacting though Microsoft cloud solution providers (CSPs) last year, was up 83 percent.
The biggest hurdle, though, is a shortage of skilled cloud professionals. While Microsoft has developed an Azure skills training curriculum and has delivered over 100,000 courses to individuals to date, Schuster knows it’s not enough and said that the company continues to focus on doing more to help partners train or retrain employees for the cloud.
With Microsoft’s focus on digital transformation, cloud is everything as is a new consumption-base business model.
Schuster, pictured below, stressed how Microsoft reimagined how the company sells with partners, moving away from selling Microsoft services to selling partner services, with a consumption model driving the value proposition. OCP, Microsoft’s sales model turnaround, recognizes how customers are buying technology, and that’s via business decision makers looking for technology solutions for their line of business (LOB).
“Co-selling is about selling partner services. Taking the end solution that a partner has built on Microsoft technology that meets a customer’s demand more specifically, and bringing a partner in to sell with us to those business decision makers,” Schuster said.
While Microsoft’s co-sell program was initially opened to ISVs when announced at last year’s Inspire conference, it’s now open to any partner building IP on Azure. Do that and you could qualify for the co-sell program.
One of several key solution areas for co-sell is AI. To help partners seize AI opportunities in 2018, Microsoft released a new and free AI Practice Development Playbook for partners interested in building a practice with the Microsoft AI platform, and enhancing current services with machine learning, computer vision, natural language communication with chat bots, or speech recognition.
This is the latest Practice Development Playbook offered by Microsoft. The company introduced the first five in 2017.