Times are good for Microsoft. The tech industry titan recently reported 17% revenue growth to a whopping $43.1 billion in its second fiscal quarter, not to mention a 34% spike in commercial cloud revenue to $16.7 billion and 50% growth in Microsoft Azure revenue. Given that partners make $10 for every $1 of revenue Microsoft pockets, the company says, those figures are good news for channel pros too.
“It shows the partner opportunities are significant and they’re concrete, and that partners that bet with us grow with us,” said Nick Parker, corporate vice president of Microsoft’s Global Partner Solutions group, yesterday during the company’s 2021 state of the partner ecosystem briefing.
Parker and other executives spent much of that event outlining opportunities for partners to build on current momentum. Among them was participating in Microsoft’s co-sell program, in which Microsoft salespeople drive demand for partner solutions. Since that program’s debut in 2017, the company says, co-sell transactions have produced some $18 billion in partner services revenue. In the last six months alone, Microsoft and its channel have closed 166,000 co-sell deals.
SMB partners can expect to participate in more of those deals going forward, as training additional co-sales attention on the small business and medium enterprise customer segments is among Microsoft’s top partner revenue priorities for the current fiscal year, which concludes in June. That effort includes targeted SMB marketing campaigns and extra investment in makers of SMB software.
“This is a huge growth opportunity for our partners,” said Gavriella Schuster, corporate vice president of Microsoft’s One Commercial Partner organization.
In a further reflection of the increased attention SMBs are getting from Microsoft, the company launched a Small and Midsize Business Management advanced specialization last month for implementors of SMB solutions with Microsoft Dynamics 365 Business Central.
With adoption of cloud solutions surging among home-based knowledge workers during the coronavirus pandemic, and global cloud spending set to exceed $1 trillion annually by 2024 according to IDC, participation in Microsoft’s Cloud Solution Provider (CSP) program is an important partner opportunity as well, Schuster stressed. Microsoft calls CSP its “primary partner sales motion for small and midsized businesses and for smaller corporate customers,” according to a recent company blog post.
“We now have more than 90,000 partners utilizing CSP as a means to connect customers to the cloud, each with their own unique offerings,” Schuster said. CSP enrollees have been authorized to sell perpetual software licenses for on-premises products for use in hybrid cloud solutions since last month, she noted.
A new online commerce platform Microsoft is introducing this year will make buying cloud and other Microsoft products easier by unifying traditionally separate purchasing venues. “We’re consolidating all of those multiple channels into a single common platform,” Schuster said. “We want to create a consistent and simplified purchase experience.”
Another website set to reach an important milestone this year will further simplify life for channel pros, Schuster said. The Partner Center, a centralized portal that has been rolling out in stages for multiple years, will be feature complete by this spring, enabling users to manage their participation in the co-sell and CSP programs, as well as their solutions published in Microsoft’s commercial marketplace, sales leads, and partner program benefits, in one centralized place.
“We’ve brought everything together so organizations have one pane of glass to manage their business with us,” Schuster said.
Though cloud computing is one of IT’s hottest markets at present, there’s money to be made in PCs as well, according to Microsoft. Fueled by sudden, exploding demand for work-from-home hardware, sales of desktops, notebooks, and workstations climbed 13.1% in 2020, according to IDC, the biggest annual increase since shipments rose 13.7% in 2010. While desktop revenue will decline in 2021, the analyst projects, laptop revenue will grow another 3.2%. Microsoft is comparably bullish on the PC market.
“We project revenue, for example, of premium PCs shipped to sustain at $130 billion, even with a projected potential market downturn in the economy,” Parker said.
There’s hardware revenue to be had beyond PCs as well, according to Nicole Dezen, vice president of devices partners. “In the coming year as industries prepare for the next normal, we expect a big focus on enabling hybrid workforces,” she said. “We see an amazing opportunity for our partners in videoconferencing and collaboration devices, with an estimated market opportunity of 48 million meeting rooms with only a 6% penetration rate.”
Schuster spent some of her presentation recapping partner assistance efforts Microsoft introduced last year after the arrival of COVID-19, which included extending deadlines for renewing Microsoft competencies. In January, the company gave partners further time to requalify. Partners with most competencies that have anniversary dates between January 1 and June 30 of this year are now eligible for a one-year competency extension to 2022.
