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Microsoft Adopts Partner-First Strategy, Sheds Partner-Led

Strategy

MICROSOFT INSPIRE — Digital transformation, digital disruption – call it what you will – is a $4.5 trillion market opportunity of which IDC expects Microsoft and its partners to garner $1 trillion in revenue in 2017.

To help achieve this goal this year and beyond, Microsoft expanded on how it’s bringing its partner-facing roles into one organization to inspire partners to innovate more, go to market faster, and connect with the right customers at the right time.

Microsoft's Satya Nadella

Microsoft’s Satya Nadella

Kicking off this week’s Microsoft Inspire in Washington, D.C., company CEO Satya Nadella addressed how the company goes to market with partners to conquer the four key opportunities, or ingredients, of digital transformation: the modern workplace, business applications, applications and infrastructure, and data and artificial intelligence (AI).

He also talked about the next paradigm shift from a mobile-first, cloud-first era to an intelligent-cloud and intelligent-edge era, characterized by three key things: mobile device, mobile sense; artificial intelligence; and serverless.

“The opportunity is tremendous. And the way we’re going to capture the opportunity is to come together to address the four transformational outcomes: empower employees, engage customers, optimize operations and transform products,” Nadella said.

More than 17,000 attendees from more than 140 countries are in Washington, D.C. at Microsoft Inspire, the vendor’s flagship worldwide partner conference, formerly known as Microsoft Worldwide Partner Conference (Microsoft WPC). Tens of thousands more are tuning into the virtual event.

On the news front, Microsoft made several product announcements around digital transformation:

  • Microsoft 365 is a set of commercial offerings – Microsoft 365 Enterprise and Microsoft 365 Business – that represent a shift in how the company goes to market with commercial offerings, i.e. bringing together productivity, device management and security into one comprehensive solution.

So, for example, Microsoft 365 Enterprise includes Office 365 Enterprise, Windows 10 Enterprise, and Enterprise Mobility + Security. The product is designed for enterprise customers.

Microsoft 365 Business includes Office 365 Business Premium, security and device-management features for Office apps and Windows 10 devices, all in a centralized IT console, and targets small and medium-size businesses (SMBs).

What this new go-to-market strategy means to partners is an opportunity to increase deal size, differentiate their offerings, and grow managed services revenue by 50 percent versus selling and deploying Office 365 alone, according to Forrester Consulting.

  • The vendor also announced the general availability of Dynamics 365 apps and LinkedIn integrations coming in July. The two aspects of this news: Microsoft Relationship Sales, which is a joint product — LinkedIn Sales Navigator and Dynamics 365 for Sales; and new business applications for the enterprise such as Dynamics 365 for Retail.
  • Microsoft also announced that Microsoft Azure Stack is ready to order from its large hardware partners, Dell EMC, HPE and Lenovo, soon to be followed by Cisco and Huawei. Microsoft expects to begin the certification process for orderable Azure Stack integrated systems with initial systems shipping in September.

The Azure Stack Development Kit (ASDK) is available as a free single-server deployment option for trial or proof of concept purposes via web download. Partners can use it to build and validate applications for integrated systems deployments.

Azure Stack, an extension of Azure, is core to Microsoft’s hybrid cloud strategy, consisting of APIs, some DevOps tools and a portal for increased developer productivity, the company said.

  • Microsoft also announced two key investments to help partners compete and succeed: ISV Cloud Embed and Co-Sell Investment.

The goal of ISV Cloud Embed is to make it easier for partners to modernize existing applications and build new ones using a Microsoft business applications platform to add sales automation, service line and operational backend functionality to their own apps.

Later this year, Microsoft will extend the number of higher-level services available as embeddable building blocks to include: Microsoft Flow Embedded; PowerApps Embedded; and Power BI Embedded, and partners will be able to buy the embedded building block capabilities at discounts of up to 50 percent.

Partners also receive tiered go-to-market support and can showcase apps through Microsoft AppSource.

The Co-Sell Investment enhances incentives and support for all partners and bolsters the vendor’s Azure co-sell program piloted last year. In the first six months of that initiative, the program helped close more than $1 billion in annual contract value for Azure partners, created $6 billion in Azure partner pipeline opportunity and generated more than 4.500 partner deals, Microsoft said.

How it works: Microsoft sales reps are compensated when they co-sell qualified Azure-based partner solutions. The increased investment in the Co-Sell program includes the creation of a new dedicated channel-manager role that will be completely focused on supporting partners’ go-to-market efforts and success.

“We heard you: Our goal is to tear down walls and work together,” said Ron Huddleson, corporate vice president, Microsoft’s One Commercial Partner Organization.


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