Are you set for success in 2019? Are you ready to build on last year’s growth and innovate in this dynamic market? With wind in our sails, now is the time to capitalize on the opportunities ahead.
Last year was an action-packed year for Microsoft and our partners. The IP co-sell motion we launched at Inspire 2017 has taken off. New numbers show partner revenue through IP co-sell has reached US8 billion, in just 18 months. We rolled out the Azure Expert Managed Services Provider (MSP) program, creating a new pinnacle of partner differentiation to deliver repeatable, high-fidelity managed services on Azure for customers. And we enhanced go-to-market benefits packages, advanced specializations, and brought new capabilities to Azure Marketplace and AppSource,
From our vantage point, this momentum is not slowing down, and the opportunity over the next few years is phenomenal. So, I asked Microsoft leaders from across the company what they believe are the biggest opportunities for our partners in 2019. Today we’re sharing how we believe partners can accelerate their growth in 2019 and beyond.
Characteristics of a modern partner
People often ask, “What is Microsoft’s vision of a perfect partner?” There’s really no such thing. But there are several characteristics that set some apart from others, starting with customer obsession. When partners put the customer at the center, they get a clear view of the partner ecosystem that surrounds every customer and can tailor their offerings based on the organization’s core objectives and needs.
Modern partners provide integrated cloud/infrastructure offerings that utilize the full capabilities of the cloud. Their solutions integrate deeply across the customer’s business. Standout partners also have industry and domain experts who are able to bypass IT and go directly to sales, finance, and marketing leaders, creating a richer relationship with the customer. The connection allows partners to bring the customer the right solution at just the right time.
Modern partners develop IP that is embedded directly into their solutions, which unlocks enormous value. At the end of the day, the greatest opportunity for partners isn’t in reselling technology. It’s the partner’s IP and subject matter expertise that is infused in solutions that generate the most long-term value.
Data. Since everything generates data, the most valuable asset to the customer is the ability to pull all their data together and make sense of it. Modern partners have a focused approach on helping customers with their data estate empowered by AI and machine learning.
Folding these characteristics into your business will set you apart and keep you a step ahead of the pack.
Start leveraging the next generation of building blocks
ISVs have partnered with Microsoft for more than four decades to create business solutions that have leveraged successive generations of hardware and software building blocks. This journey has taken us all from client software through client/server, internet, mobile/cloud, and now to the intelligent cloud and intelligent edge. Each generation changes how we build, sell, and monetize our solutions. As our building blocks have improved, so has our pace of mutual innovation.
In 2019, ISVs can leverage the next generation of software building blocks to enhance their existing solutions and build new ones with advanced capabilities. Internet of Things (IoT), AI, blockchain, mixed reality, and eventually quantum computing will enable a new generation of solutions. For line-of-business ISVs, new tools for robotic process automation like Microsoft’s Power platform will let them automate business processes across Microsoft’s SaaS offerings (Microsoft 365, Office 365, and Dynamics 365) and third-party solutions to support customers to achieve more. In support of this new capability and the opportunity it provides, we not only continue to invest in the Power platform and the Dynamics 365 SaaS services for ISVs, but also the programs and tools to support them. Look for more updates on this work throughout the year here as it happens.
With these new building blocks, we can begin our journey to drive the next four decades of innovation together. I look forward to our journey.
Champion industry innovation
Technology refreshes daily. The pressures of modern customer demand and international regulation challenge industries to transform. I find that what differentiates truly exceptional organizations is their ability to find a partner who understands them, who helps them navigate market challenges, and who helps establish them as an industry leader.
Partners inspire change and set new courses for industries. They offer strategic advice, implement revolutionary technology, and craft iconic experiences. There are amazing examples of this in action. In manufacturing, small support teams manage whole skyscrapers—tracking systems like air, water, and heat remotely. In healthcare, advancements in IT connect patients, caregivers, and clinicians, lowering hospital costs and keeping patients healthy. In retail, technology personalizes shopping experiences on mobile and in redefined brick-and-mortar stores.
Not only do partners have a chance to change a single customer within an industry vertical, they also have a unique opportunity to expand their reach, offering proven results to additional organizations in the same industry. The art of what is possible has never been more exciting, with advancements in collaboration, AI, mixed reality, and unified data. With the investments we are making in industry programs at Microsoft, together, we can support our customers in fundamentally reimagining the digital face of industries.
AI for customer solutions
AI, data, and cloud are ushering the next wave of transformative innovations across industries. With Azure AI, our goal is to empower organizations to apply AI across the spectrum of their business to engage customers, empower employees, optimize operations, and transform products. Partners with their in-depth industry knowledge, geographic reach, and implementation expertise are critical in making AI real for businesses.
We see partners using Azure AI to deliver customer solutions across three key areas:
- First, using machine learning to build predictive models that optimize business processes.
- Second, building AI-powered apps and agents to deliver natural user experience by integrating vision, speech, and language capabilities into web and mobile apps.
- Third, applying knowledge mining to uncover latent insights from documents.
According to IDC Spending Guide, worldwide spending on cognitive and AI systems is forecasted to reach US77.6 billion. We have seen over 200 percent growth year over year in partners building AI practices. This industry and partner momentum speaks volumes to the fact that AI is going mainstream. What a great opportunity for us to work together.
Cloud marketplaces will become a core software acquisition method, even for the largest enterprises
Customers are changing their software buying patterns, especially among the biggest enterprises that increasingly want to learn, try, and buy online. Forrester Research predicts enterprise adoption of cloud marketplaces will grow quickly from 29 percent to 75 percent in the next two years. Our marketplace investments are designed to serve customers of all sizes with the broadest catalog of enterprise software solutions from both Microsoft and our extensive partner ecosystem.
With over 8,000 apps and services in our cloud marketplace, we work closely with customers to recommend the best solutions for innovation in their digital transformation. Offers from ISV, MSP, and SI partners now sit alongside Microsoft services like Office 365, Dynamics 365, and Azure in our product catalog, providing customers with the most extensive set of options available direct and from our reseller channel. Partners should consider which storefront is best for them to reach more customers and expand their distribution potential, either AppSource, with a focus on industry-tailored solutions, or Azure Marketplace, home to state-of-the art cloud software.
Partner-to-partner relationships are key to your go-to-market plan
It’s a top priority for us to connect partners with customers to market and sell their apps, services, and solutions. Microsoft Partner Network members have access to a portfolio of go-to-market resources that range from marketing training and customizable content to services that help you optimize your marketplace listing, website, social presence, and more.
Partners shouldn’t overlook partner-to-partner (P2P) opportunities when creating their go-to-market plans. IDC estimates that partners can increase their revenue by up to 20 percent, and our own data suggests that win rates increase by up to 15 percent, when partners work together to contribute their expertise and deliver integrated solutions that address the needs of small and large businesses, and unique industry needs. You’ll see opportunities for P2P connection begin to surface in the Cloud Solution Provider program, in AppSource and Azure Marketplace, by participating in referrals, and through co-sell.
If partners use these resources to go to market with Microsoft and each other, opportunities to excel with new solution design, geographic expansion, and new business growth opportunities are sure to follow.
Behind every great customer is a great partner
As more and more global companies put their trust in Microsoft and our technologies to power their digital transformations, our partners continue to play a critical role in implementing cutting-edge solutions for customers.
Behind nearly every deal we sign with a customer—big or small—a Microsoft partner is helping customers drive new digital innovations for their businesses. In fact, the depth, breadth, and expertise of our partner ecosystem is one of the core reasons why our customers choose to work with us.
For me, the most exciting thing about working at Microsoft is helping customers drive transformation in their industries and seeing the innovative solutions partners are building on our platforms to make that happen. The work our partner Fellow Inc. is doing with BevMo! to use Fellow Robots for supply-chain efficiency is a great example of a Microsoft partner creating new capabilities for a customer. TokyWoky’s use of Azure AI and Power BI to create new chat solutions for craft retailer Michaels and LiveTiles building innovative new bot platforms for global jewelry brand Michael Hill also stand out as examples of partners building intelligent retail solutions for customers.
In the year ahead, to maintain the momentum we have seen, my advice for our partner ecosystem is to stay laser-focused on doing everything possible to maximize the value offered to customers. That will require helping customers realize their desired business outcomes today and into the future by building solutions for key industries, such as financial services, healthcare, retail, manufacturing, government, and beyond. This is what digital transformation really means, and I am eager to see how our partners can make more possible for customers.