Microsoft Working to Transform Channel Relationships

To continue to grow its own business, Microsoft is working to find new ways to help its channel partners expand their operations by providing bolstered go-to-market programs and other expanded partner benefits.

In a recent interview at Microsoft’s Redmond campus, Channel Futures spoke with Toby Richards, general manager of the company’s worldwide partner go-to-market and programs office, about how the Microsoft’s approach to its partners continues to evolve.

Microsoft’s Toby Richards

“Our partnerships are changing pretty drastically,” said Richards.

As the channel itself continues to move away from just reselling products to more directly creating its own strategies, products and services to better serve and support customers, Microsoft has been changing to keep up, he said.

For end-user customers, that means partners are in more cases transforming from acting only as resellers into true partners with businesses, said Richards, particularly as technologies including IoT and artificial intelligence become more popular and demand additional assistance for adoption by companies of all sizes.

“That’s just starting,” he said. “We have been working with existing channel partners over the last 18-24 months on these things. There’s just explosive growth in terms of innovation.”

Richards, who has worked at Microsoft for 24 years, said the company has been focusing hard on how it can help partners take advantage of the rapidly changing technology landscape so they can continue to grow and retain their customer bases.

“When we work with partners, we look at partners who are thought leaders,” he said. “We look at what they are building on top of, from Microsoft Azure to Dynamics 365 to Microsoft Office 365.”

Microsoft has been running a Microsoft co-sell program the last few years that’s designed to provide additional compensation to partners for selling specific Microsoft services and applications to drive partner growth.

“In 18 months, we have generated over 20,000 partner solution wins and paid Microsoft partners to help sell Microsoft solutions,” said Richards.

Those efforts have generated about $8 billion in partner revenue in that time, he added.

Other Microsoft resources, including the Azure Marketplace and the Microsoft AppSource business app store, are also being used to help partners – including ISVs, Microsoft solution providers, cloud service providers and others – sell and grow, he said.

Fueling these changes is an IT marketplace that includes some 75-100 million businesses around the world that are out there looking for technologies and IT services to solve their business challenges, especially when it comes to the cloud, said Richards.

“The ways of making technology decisions is really shifting,” he said. “It’s less about selling to the CIO today; now it’s delivering solutions for the business.”

Microsoft itself has experienced these changes on its own as well, he said.

“We worked with partners to deliver our [Windows] desktop solutions 24 years ago. Now we need more partnerships; we need to demonstrate more with every partner that we are providing things for them to connect to more customers to help them differentiate themselves,” he said.

Much of that partner investment has been in Azure Marketplace so customers can find, try and buy not only Microsoft products and services, but also …

… products and services from partners, he explained.

“That is connected to our channel partners, so we can connect one partner to another partner to help with a sale or to penetrate into a new market,” said Richards. “That ties into our Microsoft seller tools for selling Microsoft products. That’s a huge advantage for us when you think of the thousands of telesales and field salespeople we have across the globe. We’re really helping to provide much more visibility to solutions from partners.”

Some 15,000 new partners joined the Microsoft Partner Network in January, giving the company more than 300,000 global partners, most of which are small companies.

To further assist partners, Microsoft offers what it calls “playbooks” which include hiring and on-boarding strategies, resources about IoT, AI, cloud migration and modernization, data platform details and more that partners can use to bolster their training, services and selling, said Richards.

“Twenty years ago we would just send them price books,” he said. “The value today is, how do you build successful partner practices with managed services, subscription-based services and deployment services? In the old days it was offering customers a new product and installing it. The days of talking about margins and feature-by-feature comparisons are over. Today it’s about digital relevance.”