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Microsoft’s Billion-Dollar Partner Spending Spree

Microsoft is introducing a slew of new investments in partner programs and product updates as it proclaims to spend “billions investing in partners every year”.

In 2019, the vendor plans to launch new specialisations and competencies as well as new programs within Azure, Dynamics 365, Teams and a new Business Applications ISV Connect Program which will be revealed at its annual Inspire conference.

In the lead up-to Inspire, Microsoft revealed the types of changes it was making to itsPartner Network, namely cutting off benefits such as internal use rights licenses for partners with Microsoft Action Pack, Silver and Gold competencies, as well as on-premises product licensing support.

The decision was not well received by Microsoft’s channel community, with one Australian partner going as far as to launch petition against it. At the time of publication, the petition was close to its target of 5000 signatures.

But as Microsoft One Commercial Partner vice president, Gavriella Schuster, said during a media pre-briefing, “sometimes we have to make some really hard decisions.”

“Even though we spend a billion dollars, there’s many different things we want to invest in, and a lot of different partners that service different customers globally. We still have to make trade-offs,” she said. “The number one thing we can do for our partners is to help them reach more customers and generate more opportunities, which is the core of their profitability.”

Schuster said as it moved into cloud services, it didn’t think through the impact it could have on internal use rights licenses, until recently when the bills were piling up.

“If our partner ecosystem, with 7000 new entrants every single month, continues to grow like this, we can’t afford this. We have to figure out how do we help our partners to use the products so they can sell them – demonstration purposes, training, proof of concepts for their customers and dev/test environments,” she said.

“We can’t afford to run every single partner’s organisation anymore, because it’s not free.”

She further revealed that 70 per cent of its customer opportunities is driven by the channel, with about 95 per cent of its revenue going through partners.

The co-sell program introduced 24 months ago has already generated US$9.5 billion in annual contracted partner revenue, sending 350,000 leads to partners every month that have Marketplace listings, therefore driving US$90 million per month in transactions through the marketplace, Schuster said.

“With new investments in our co-sell program we expect the coming year to bring even more growth for our partners,” she said.

“We’ve invested a lot in go-to market services and we’re helping them to create their value proposition, and how to do digital engagement with their customers.”

Where the money is being spent in 2019

New pricing models, rewards program and route to market are also rolling out for partners that publish transactable offers in Microsoft’s expanded commercial marketplace.

Specifically partners who publish SaaS software and services built on one or more of Microsoft’s clouds across 365, Dynamics 365 Power Platform and Azure, will access new tools and a single on-boarding process to help them publish transactable offers into Microsoft AppSource and Azure Marketplace.

The new pricing model includes monthly and annual SaaS billing; flexible custom pricing options; standard contracts and free SaaS trials that can convert to paid engagements.

Publishers will also be able to create private marketplaces with custom catalogues, metered billing, contract amendments and governance. A new badging criteria will also be introduced for apps listed in AppSource and Azure Marketplace.

“We’re enabling partners transacting through CSP, to pull those Marketplace offers through in their CSP offerings. We’re incentivising the CSP to actually go sell it,” she said. “Those are big and new investments we’re making to help them reach more customers and we believe that is going drive the biggest value in growing their businesses this year.”

To help solve migration pain points, Microsoft unveiled the Azure Migration Program that offers partners proactive advice, tools to help mitigate risks and address ‘common’ issues with moving workloads to the cloud.

A new security competency is on the cards for partners to provide security-related services on Azure and Microsoft 365. Advanced specialisations within Teams will also be available in the months ahead.

New advanced specialisations for Microsoft Azure migrations will also be put forward for Windows Server and SQL Server; Linux and Opensource Databases; Data Warehouse; Modernisation of Web applications in Microsoft Azure and Kubernetes on Microsoft Azure.

Also on the Azure front, partners will have access to Azure Lighthouse, which provides a single control plane to view and manage Azure at scale across all their customers, offering higher automation and efficiency, and makes way for cross-tenant management of customer estates. This allows partners to service more customers, larger workloads and mission critical apps.

Specifically within Teams, Microsoft said it will be introducing several new features including ways to support new first line workers, along with new partner integrations featuring support for contact centres, compliance recording and cloud solution providers.

From 1 August, Microsoft will also be launching a Teams trial whereby Microsoft 365 partners can initiate six month trials for Exchange Online only or non-cloud customers. To date, Teams maintains more than 13 million daily active users and 19 million weekly active users.

“That momentum is bringing new opportunities for partners to build differentiated solutions for customers on top of the Teams platform,” she said.

Furthermore, Microsoft is launching an Azure AI Accelerate Program that will put the spotlight on machine learning, knowledge mining, AI apps and agent offerings.

On top of this, a new analytics service called Azure Data Share will also be introduced that will help organisations share big data safely and easily.

Microsoft vice president of AI and ISV engagement Steven Guggenheimer revealed the launch of a new Business Applications ISV Connect program, whereby ISVs can get to market faster through being able to publish their solutions across both AppSource and Azure Marketplace.

The program is a revenue-sharing model whereby Microsoft will provide ISVs with technical, marketing and sales enablement benefits. It is also throwing in co-selling and co-marketing benefits.

Guggenheimer began to preview elements of the program in April and, following feedback, decided partners required two key things: ways to reduce development time and go-to market support for increased business opportunities.

For ISVs building on Microsoft’s platform, the software giant is also offering new pre-packaged elements like APIs, business logic, entities and workflows for Dynamics 365 and PowerApps so ISVs can connect line-of-business apps to core business data without having to build new integration points.

Microsoft is also expanding its Dynamics 365 industry accelerators for ISVs to include two new verticals including automotive and financial services.

“Partners benefit from a strong ecosystem and with this new program, Microsoft will ensure that only healthy apps are part of the ecosystem by requiring certification,” he said.―AR Net


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