Microsoft Puts Partners at the Center of $4.5 Trillion Transformation Opportunity

 |   Thornthawat Thongnab

As we kicked off Microsoft Inspire in Washington, D.C., the world is on the cusp of major technology disruption – and that brings major opportunity. Digital transformation is a wave of business innovation fueled by cloud technologies like the Internet of Things, augmented reality, artificial intelligence and data. Driving our customers’ businesses forward through digital transformation has opened an estimated $4.5 trillion market opportunity.

According to a study by the Harvard Business Review, 86 percent of companies view digital disruption as an opportunity.  Companies across every industry are seeking ways to use digital transformation to empower their employees, better engage with customers, optimize operations and transform their products. Leaders recognize that successful transformation depends on their employees and culture, which is why both are at the heart of the offerings we are announcing today.  

Introducing Microsoft 365

Today at our annual partner conference, we unveiled Microsoft 365, a new set of commercial offerings that brings together Office 365, Windows 10, and Enterprise Mobility + Security. Microsoft 365 is a complete, intelligent and secure solution to empower all companies and all workers, recognizing that people are at the heart of digital transformation. It puts people at the center, giving them flexibility to work where and how they want and giving them new ways to collaborate with others — all while protecting company data.

We are introducing two Microsoft 365 offerings today. Microsoft 365 Enterprise is the evolution of our highly successful Secure Productive Enterprise offering, and includes Office 365 Enterprise, Windows 10 Enterprise, and Enterprise Mobility + Security. It’s designed for large organizations and empowers employees to be creative and work together, securely.

Microsoft 365 Business, available in public preview starting August 2, is designed for small- to medium-sized businesses with up to 300 users and integrates Office 365 Business Premium with tailored security and management features from Windows 10 and Enterprise Mobility + Security. It also includes a centralized console for deploying and securing devices and users in one location.

Microsoft 365 represents a fundamental shift in how we will design, build and go to market to address our customers’ needs for a modern workplace.  It’s a more cohesive approach and reflects the shift our partners and our mutual customers are making — from viewing productivity, security and device management as individual workloads to seeking a comprehensive approach to secure productivity. Microsoft 365 is great for partners, too. It represents a significant opportunity to increase deal size, differentiate offerings, and grow their managed services revenue. According to a Forrester Total Economic Impact™ Study (Commissioned Studies conducted by Forrester Consulting), Microsoft 365 Enterprise increases partner revenue opportunity by more than 50 percent versus selling and deploying Office 365 alone.

Applications and Infrastructure

As more and more companies transform, it is important for our partners to think bigger and create faster. To fuel our partners’ success and help meet our goal of a $20 billion cloud run rate by 2018, we are excited to announce with our launch hardware partners, Dell EMC, HPE and Lenovo that Microsoft Azure Stack is now available to order. Azure Stack is an extension of Azure that brings the agility and fast-paced innovation of cloud computing to on-premises environments and enables entirely new hybrid cloud scenarios.

Azure Stack offers a truly consistent hybrid cloud platform, providing an ideal fit for customers who want flexibility without having to build applications in a different way.  From Azure datacenters to the edge of the cloud — whether miles underground in a mine shaft, away at sea on a ship, or on a factory floor dependent on continuous real-time operation — Azure Stack enables modern cloud applications that meet all business and regulatory requirements.  A truly consistent hybrid cloud helps customers execute on their cloud strategy faster in a way that makes the most sense for their business.

Azure Stack extends the Azure ecosystem opportunity by helping partners grow their Azure business and reach a larger addressable market through hybrid cloud scenarios.  Many of our partners have already begun to capitalize on the power of Azure Stack including Rackspace, Tieto and Resello.  Partners can learn more about how to build a successful cloud practice through our Practice Development Playbooks or sharpen their Azure skills through our online trainings here

Business Applications

I’m excited to announce two new ways Microsoft is helping our partners connect with customers and bring innovative solutions to market.

Last year we piloted a new Azure co-sell program to provide comprehensive sales and marketing support for partners building solutions with Azure.  In its first six months in market, this 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.

Azure is the only public cloud providing partners with this incredible benefit through which Microsoft sales reps are paid up to 10 percent of the partner’s annual contract value when they co-sell qualified Azure-based partner solutions.  This means Microsoft is uniquely incenting its sales reps to work hand-in-hand with Azure partners to drive new business together and enabling partners to leverage the Microsoft salesforce to grow their business globally.

To build on this incredible momentum, we are making additional investments to accelerate Azure co-sell over the next 12 months.  We are also creating a new dedicated Channel Manager role that will be 100 percent focused on supporting partners go to market efforts, helping ensure their solutions reach new customers and integrating with our co-sell motion. Together, these represent a quarter of a billion dollar investment that materially increases our partner-dedicated personnel, and adds to Azure co-sell incentives.

We also are making it easier for partners to modernize existing business applications, and build new ones, with a new program we are calling ISV Cloud Embed. Through this new program partners can purchase core Dynamics 365, Power BI, Power Apps and Microsoft Flow capabilities as embeddable “building blocks” at discounts of up to 50 percent. In the same way that partners today build their apps on Microsoft Azure, they can now also use our business applications platform to easily add sales automation, service line and operational backend functionality to their own apps.  This helps lower development overhead and costs by putting our engineering resources to work for them.  Partners receive tiered go to market support and an opportunity to reach Office 365’s 100 million active monthly users and a growing community of Dynamics 365 customers through Microsoft AppSource.

From building on Azure to industry leading co-sell support and new embeddable business application services, no other vendor provides a more comprehensive approach to helping partners accelerate their transformation and their business.

Putting Partners First

Our mission is to empower every person and every organization on the planet to achieve more, and our partners bring that mission to life every day with our customers. Our partners employ more than 17 million people around the world, and IDC estimates that Microsoft and its partner ecosystem will garner almost a trillion dollars in revenue in 2017, according to IDC Microsoft Footprint Model 2017. 

Together, we are helping companies in every industry grow faster and more efficiently than ever before, through business innovation fueled by cloud technologies like the Internet of Things, artificial intelligence, data, and through opportunities like the integration of LinkedIn Sales Navigator with Dynamics 365 and the expanded global Mixed Reality Partner Program announced today. At Microsoft Inspire, executives from KPMG, Schneider Electric, Sephora, Adobe, Track’em and more were demonstrated how they are driving digital transformation in their respective industries. KPMG, for example, is working with us to create the KPMG Digital Solutions Hub and, with KPMG “Clara” on Azure, will be the first of the “Big 4” professional services firms to bring its auditing platform to the public cloud.

However, the transformation our partners drive with customers is not new.  For more than 40 years, we have been a partner-led company, which is proven by fact that we generate more than 95 percent of our business through our robust and constantly evolving partner ecosystem. Today, Microsoft has more than 64,000 cloud partners — more than AWS, Google and Salesforce combined.  Our partners tell us they choose Microsoft because we are more than a technology provider– we are their business partner. Notably, 30 percent of our partners joined our network in the past year, and we are adding more than 6,000 partners each month.  But, we can achieve more together. 

To help partners innovate more, go to market faster and connect with the right customers at the right time, we are transforming how we engage with our partner community by bringing our partner-facing roles into one organization.  We have aligned all partner-facing roles to three primary functions: Build-With, Go-To-Market, and Sell-With. This will simplify and optimize our engagement, drive increased collaboration and foster a culture of work that puts our partners first.

Microsoft Inspire gathered more than 17,000 people for our most important partner event of the year. More than 145,000 meetings take place during the event, and past exhibitors have experienced a 30 percent year-over-year sales increase. In a world where transformation is inevitable, the opportunities for our partners are endless.