This article was originally published in the Summer 2018 issue of The Record.
Last July, Microsoft made some big, bold changes to how it works with partners. Tell us about those changes and why they were made.
Last year, we set out to make dramatic changes. At Inspire, we introduced the One Commercial Partner organisation, and transformed how we engage with our partner community by bringing all of our partner facing roles into one organisation. We aligned all of those partner facing roles to three motions: build-with; go-to-market; and sell-with. This has simplified our partner engagement, driven increased collaboration and fostered a culture of work that puts our partners first.
As part of the sell-with motion, we introduced a new role called the channel manager. This role has strengthened the relationship between Microsoft field sellers and the selling teams of our partners. The channel manager role has proven to be invaluable. We have seen some remarkable success this year generating more than 240,000 leads and opportunities for partners.
We also introduced rewards for co-selling third-party solutions from our partners. From that we have closed nearly US$2 billion in revenue for our partners in more than 8,000 customer wins. We intend to continue this programme and expand our co-sell motion even further next year with enhancements to our marketplaces – AppSource and Azure Marketplace. We will also start facilitating opportunities for partners to co-sell with each other.
How are you helping partners to reach more customers?
The top request that partners have made of us is to better connect them to customers. Helping partners take the solutions they’ve built to market and reach more customers will be a significant focus for us going forward. The marketplaces are one way we’re doing that, and both AppSource and Azure Marketplace now allow partners to publish both apps and services as offerings. In addition, we have a referrals engine in place that makes it easier for customers to find a Microsoft partner with a solution that meets their needs. Over the past few years, we’ve made available marketing and sales content and customisable assets that a lot of partners have found valuable, and now we’re making go-to-market services available to partners to better enable demand generation, channel development and more.
We’ve made these moves because we cannot serve our customers without partners. Our partners continue to be a critical ingredient in our business model. Microsoft is squarely focused on enabling partners of all types to deliver services around the world on any platform. This open and cloud-focused approach allows us to provide more value and more choice to customers in four solution areas: Modern Workplace; Business Applications; Apps & Infrastructure; and Data & Artificial Intelligence. Through these changes, we want to help partners innovate more, go to market faster and connect with the right customers at the right time.
Five years ago at the LeWeb Conference in Paris, Satya Nadella said: “Over the next ten years, we’ll reach a point where nearly everything has become digitised.” At the halfway point between prediction and outcome, how do you think Nadella’s quote holds up to scrutiny? Where do you think that Microsoft is leading the way with this digital transformation agenda?
For Microsoft and our partners, digital transformation is more than a trend; it’s a new way of life. The opportunity around digital transformation continues to be staggering. According to research Microsoft conducted with IDC, digital transformation is now an executive mandate, and more than 60% of enterprises will begin implementing a digital strategy by 2020. By the end of 2019, IDC predicts US$1.7 trillion in spending worldwide to create new business models, products, operational efficiencies and customer experiences. By 2021, spending on cloud IT and services will more than double and, according to IDC, the Microsoft partner opportunity related to digital transformation solutions will reach more than US$2 billion by 2022.
Digital transformation is at the heart of our amazing partner multiples. In 2017, partners earned US$9.64 in services revenue for every dollar generated by Microsoft, and this growth is expected to continue through 2022. We’re doing everything we can to help partners get ahead of the game, and partner value extension – especially intellectual property – will continue to be key in driving successful customer transformation.
I think one of the most incredible things is how we’re able to help our partners take advantage of this opportunity, to better help customers. We recently published a new e-book series on digital transformation, with great insight into the market and digital maturity of customers. It describes business attributes needed for successful transformation and how partners have aligned business strategy with cloud tech (such as AI and blockchain) to improve operations and monetisation. IDC also confirmed that Microsoft’s digital transformation pillars are a roadmap to aligning customer aspirations.
What are the key areas that offer the biggest opportunities for partners to innovate and to deliver their solutions and services to both enterprise and public sector customers right now?
There are several key areas. First, the modern workplace is empowering employees by giving them new ways of working, communicating and collaborating. Then there’s business applications, which are helping customers to rethink how they run their businesses and optimise their operations, particularly using cloud services. Dynamics 365, for example, enables our partners to extend our business applications into the industries in which they work through our Cloud Embed programme.
Apps and infrastructure also present opportunities, using the scale and security of the cloud platform, the hybrid platform with our new Azure Stack. This enables partners and customers to seamlessly move between their own data centre and the cloud and enables them to unlock their data in new ways.
Data and artificial intelligence also holds huge promise. When partners help customers unlock their data, it generates huge value to the customer’s business. In 2018, every Microsoft partner will be adding new data and AI services into their applications, solutions and services, delivering powerful insights and new capabilities.
Finally, there’s new legislation. Directives such as the General Data Protection Regulation (GDPR) in Europe are really impacting companies globally. Companies have had to figure out how they get their data out of the manual state and into a common data format, to use it for GDPR. Partners need to be taking advantage of that opportunity to help customers see that they’re not simply complying, but they’re unlocking a set of immense opportunities.
How do you see this landscape evolving in the coming financial year?
We anticipate huge growth and adoption of digital initiatives. By 2019, IDC predicts that 40% of digital initiatives will be supported by AI, big data and IoT. To lead the digital economy, partners must shift training efforts to focus on delivering transformative services. To help our partners natively build this new capability into their businesses we released an AI Practice Development playbook and a guided practice-building experience on partner.microsoft.com earlier this year. We have taken nearly 4,000 through Microsoft boot camps and virtual training, with more to come in 2018.
As this edition of The Record is published you and your colleagues will be getting ready for Inspire in Las Vegas. What can partners expect from this year’s global gathering? What are you hoping the event will do to enrich the work that they, in turn, are doing with Microsoft customers?
As always, partners can expect exciting events, panel discussions and news that will help them meet their goals. There will also be a multitude of opportunities for them to network with other partners and Microsoft contacts, as they discover new ways to innovate and go-to-market more quickly.
The road ahead for our partners in the coming financial year is paved with opportunities and evolutions:
1. Expanding into new businesses
2. Helping customers on their journey to become digital businesses through micro-revolutions
3. Looking for cross-industry cloud innovation to inform customers’ cloud transformations
4. Having a General Data Protection Regulation (GDPR) strategy
5. Adding customer insights and generating new opportunities through data and AI services
6. Redefining what’s possible for their customers with IoT
7. Rethinking how they’re talking about technology to embrace the new technology buyer
8. Deepening customer relationships by helping them build and manage their cloud applications and services to support business outcomes
This year, Microsoft Inspire will be in Las Vegas at the same time as Microsoft Ready, creating opportunities for the first time to bring the internal sales conference and Microsoft sales team together with partners onsite. Together with our partners and customers, we’re going to accomplish a lot in the year ahead.