By: Kyle Alspach
The past 12 months marked a period of transformation for Microsoft and its channel partners. The next 12 months, however, will be all about acceleration. That’s the message from two of Microsoft’s key channel leaders Monday, during keynotes kicking off the Inspire 2018 partner conference in Las Vegas. In their keynotes, Judson Althoff, executive vice president of Microsoft’s Worldwide Commercial Business organization, and Gavriella Schuster, corporate vice president of Microsoft’s One Commercial Partner organization, outlined the key opportunities for partners and the investments that Microsoft is focused on making in the coming year. Schuster pointed to IDC research that suggests partners earned nearly $1 trillion over the past fiscal year through working with Microsoft services — and that figure, she said, will only grow in the future. “As we stand on the threshold of this new frontier, we need to lean on each other more than we ever have before — and we need to learn from each other more than we ever have before,” Schuster said.
What follows are five key takeaways from Schuster and Althoff’s keynotes at Microsoft Inspire 2018.
Doubling Down On The Intelligent Cloud, Intelligent Edge Strategy
One year ago at Inspire, Microsoft CEO Satya Nadella (pictured) emphasized the opportunity for “intelligent cloud and intelligent edge” as a guiding focus for the company. During his keynote, Althoff summarized the progress since then: “The intelligent cloud and intelligent edge is real — it’s here and it’s now.” The “ubiquitous compute” afforded by intelligent cloud and edge capabilities will “allow us to shape the world of computing for the next decade,” Althoff said. “This new wave of computing, intelligent cloud and intelligent edge, will shape everything that we build together for the future to come.”
Althoff cited work by solution provider BlueMetal to bring processing, computation and reasoning at the edge for freight railroad operator Burlington Northern Santa Fe Railway, leading to major improvements in efficiencies. Ultimately, Althoff said, “the intelligent cloud and the intelligent edge will create more opportunity for the Microsoft ecosystem than we have seen in our history.”
Partner Opportunity Is Surging With Dynamics 365
In her keynote, Schuster (pictured) noted that Dynamics 365 — Microsoft’s combination cloud CRM and ERP system — saw 65 percent growth during the first three quarters of the company’s fiscal 2018 (Microsoft’s fourth-quarter results come out Thursday). Althoff used his keynote to urge partners,that haven’t gotten involved already with Dynamics 365 to do so in the coming year. “There is no better place to invest than in our Dynamics 365 business today,” Althoff said. If there’s a top area to look at in order “to build forward, and really grow and expand in the next year, without a doubt it’s investing in a Dynamics 365 practice,” he said.
“We’ve never had a stronger year than this past one in business applications, and it will only be usurped by this year and the years to come,” Althoff said. “It represents tremendous opportunity for all of you.”
Commercial Model Remains In Place
Microsoft overhauled its commercial model one year ago, dividing its sales groups into two categories — enterprise and small/medium/corporate — while reorganizing its sales teams by industry focus and by product category. During his Inspire keynote, Althoff (pictured) assured partners that there is no new reorganization to announce this year. “The commercial model remains steadfast. We aren’t making major changes in FY19, but rather [we’re] tuning the model so that we can build strength on strength in FY19 together as an ecosystem,” he said.
Among the focus areas for the coming year is “getting even deeper” into strategic enterprise accounts through means such as increased coverage density for technical resources, greater co-sell opportunity in top accounts, and continuing to tie Microsoft compensation to partner solutions sales, Althoff said. “It means that we need more and more ISV solutions, more and services practices, to invest in industry-differentiated solutions in the enterprise — while at the same time growing the breadth in our small, medium and corporate spaces,” he said.
Investments For Customer Acquisition And Retention
Althoff also outlined the strategy for bringing more customers to the Microsoft cloud with partners. Measures include investing “heavily” in account-based marketing — so that Microsoft “can feed relevant, contextual leads to all of you,” he said. Other moves include advancing into new customer territories — “territories, frankly, that’ve never had customers on the Microsoft cloud,” Althoff said. “We’re going to focus on bringing forward those opportunities and working with you. We’re going to add specialists dedicated to those territories. And we’re going to provide an incentive model that compensates our people, as well as you, more for doing the hard work of breaking through with customers.”
Meanwhile, in terms of investments in customer retention, Althoff said Microsoft is continuing to add customer success managers and cloud solutions architects.
Poised For Acceleration
Schuster said that Microsoft and its partners had “an incredible year together” over the past 12 months, with huge growth in areas such as Azure, Office 365 and Dynamics 365. One key metric: Cloud Solution Provider (CSP) revenue is up 234 percent compared with a year ago, she noted. “I don’t know if [the growth] was in spite of, or because of, all the changes” at Microsoft, she said. But going through the massive reorganization means that Microsoft and channel partners are now in an even better position for growth in the coming year — something Microsoft is hoping to ramp up even further by bringing its own salespeople together with partners at Inspire this year for the first time. “We’re going to learn together, we’re going to build together, we’re going to plan together,” Schuster said. “This is the week that gets us off to the fastest start to a fiscal year that we’ve ever had.”