The digital transformation phenomenon has moved past being a directional beacon. Today, it’s easy to see the path to unprecedented growth goes through the cloud and requires intelligent technology to lead customer innovation.
Your customers have already seen disruption to their industries. To drive continued change, you must have the right conversations and align your business strategy with current technology.
The Microsoft Digital Transformation Series
To that end, we’re delighted to announce Microsoft’s Digital Transformation Series of e-books. They outline partner opportunities to speed up digital transformation and become technology leaders. We worked with International Data Corporation (IDC) to develop five e-books to help you drive transformation and interpret for customers what’s happening in their industries.
Using both quantitative research (an IDC study of 639 partners worldwide) and qualitative partner interviews, we discovered how partners are positioned to utilize this opportunity.
And we mean OPPORTUNITY. By the end of 2019, IDC predicts USD1.7 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 by 2022, digital transformation opportunities will reach more than USD2 billion.
Research shows that digital transformation is now an executive mandate, and more than 60 percent of enterprises will begin implementing a digital strategy by 2020. Partner services will play a key role in helping incorporate modern technology and making the cultural shift. You must lead on both fronts.
While 84 percent of partners are using a digital strategy, most are just starting out. Those that incorporate specialized solutions will quickly help their customers disrupt their industry.
The first e-book in the series, The Digital Transformation Opportunity, contains 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 monetization. By 2019, IDC predicts that 40 percent of digital initiatives will be supported by AI, big data, and IoT.
IDC also confirmed that Microsoft’s digital transformation pillars are a roadmap to aligning customer aspirations. Our upcoming e-books will describe how digitally mature partners are focusing on the following pillars to drive revenue growth:
- Engaging customers
- Empowering employees
- Optimizing operations
- Transforming products
Digital transformation is at the heart of our amazing partner multiples. In 2017, partners earned USD9.64 in revenue for every dollar generated by Microsoft, and this should continue through 2022.
Those multiples rely on a high ratio of partner products and services. Partner value extension, especially intellectual property, will continue to drive successful customer transformation. In fact, developing IP is directly tied to partner digital maturity. According to the IDC survey, partners with IP services show the highest margins, reaching north of 70 percent.
To lead the digital economy, partners must shift training to focus on delivering transformative services. By 2020, IDC predicts 85 percent of new hires will need analytical and AI skills, and 25 percent of companies will have digital training programs and digital cooperatives.
The urgency increases when we realize half the Global 2000 will grow revenue from information products and services at twice the rate of their portfolio average, according to IDC.
Investors view digital businesses differently, and being known as a digital company affects valuations. According to IDC, measures of platform participation, data value, and customer engagement will account for over 75 percent of valuations by 2020.
With digital transformation, the challenge equals the opportunity. Keep following this series for insights into successful partner strategies and requirements for your own journey.
Share with the Microsoft Partner Community about your digital transformation here.