Microsoft is pleased with the initial impact of the dramatic channel program and sales organization changes it announced six months ago.
“The commitment is really paying off for our customers and partners,” said Gavriella Schuster, corporate vice president of One Commercial Partner, the re-branded and remodeled partner program Microsoft officially introduced at its Inspire partner conference in July.
Schuster, who delivered an online “state of the channel” address to members of the media yesterday, took command of One Commercial Partner in December, following the abrupt departure of former channel chief Ron Huddleston. She and Huddleston both played instrumental roles in the creation of the new program, as well as the new partner account management structure and sales incentives Microsoft outlined for Inspire attendees.
Those changes, which Schuster called the largest of their kind at Microsoft in decades, split what was formerly a single partner account management team into two groups, one dedicated to helping partners create end-to-end, industry-specific solutions and another responsible for connecting customers to the right partner solution for their needs.
Since July when that new approach went into effect, Schuster said, Microsoft has sent over 80,000 referrals to its partners and realized its goal of growing its cloud-related revenue to an annualized run rate of $20 billion.
“We have had some incredible momentum behind us,” Schuster said.
The “co-selling” initiative Microsoft also announced at Inspire last year is generating strong early results too, she added.
Based on a proof-of-concept test Microsoft conducted in its previous fiscal year that pumped $6 billion into the company’s partner sales pipeline and generated over $1 billion of incremental partner revenue, that program rewards the vendor’s salespeople for closing deals involving third-party solutions based on the Microsoft Azure public cloud, paying them up to 10 percent of a transaction’s annual contract value.
“We saw an opportunity to think differently about the way we go to market and the way we service our customers,” Schuster said, noting that Microsoft has allocated $250 million to co-sales commissions.
Since Inspire, she continued, the number of partners participating in the co-sell program, which is open to any software developer building on Azure, has jumped 543 percent.
Without diving deeply into specifics, however, Schuster suggested that the launch of One Commercial Partner hasn’t been trouble-free. Some members, for example, are confused about their new points of contact within Microsoft.
“Change doesn’t come easy,” Schuster said. “We’ve had to change the way our sales teams think and work, and that as you can imagine is an ongoing process.”
At least one partner gives One Commercial Partner high marks just the same.
“We are raving fans of Microsoft, and the changes to the partnership model brings us great success,” said Carl Mazzanti, CEO of eMazzanti Technologies, a provider of cloud, network, and point-of-sale solutions headquartered in Hoboken, N.J. The company’s Microsoft-related revenue is up 1,000 percent, he added.
Still, Mazzanti worries that partners incapable of keeping pace with Microsoft as it aggressively embraces “digital transformation” technologies like artificial intelligence and the Internet of Things could be in for tougher times.
“I fear their engagement with Microsoft and ability to survive is nearing an end,” he says.
Partners that pivot successfully with Microsoft stand to make a lot of money, however. According to Schuster, citing data from analysts at IDC, digital transformation will produce $20 trillion of economic value worldwide in the next five years, a figure equivalent to more than 20 percent of global GDP.
“That’s a figure I can’t even fathom, and presents an incredible opportunity for our partners,” Schuster said yesterday.
To help partners tap into the artificial intelligence portion of that opportunity, Microsoft published a new and free “playbook” yesterday that’s designed to walk partners through the steps involved in developing an AI solution or service practice.
“It provides a process partners can follow to turn their vision into a solution,” Schuster said.
Microsoft distributed five other playbooks on topics like cloud infrastructure and data analytics last year. According to Schuster, the company has recorded some 50,000 unique downloads of those guides so far.
