Cloud Profits on the Rise for Microsoft Partners

**Editor’s Note: Click here to see and read highlights from Microsoft WPC.**

Partner business transformation is a journey and costs partners money. So high on the list of what partners really care about is profitability — the pot of gold at the end of the rainbow. Jen Sieger, Microsoft’s senior business strategy analyst with partner profitability in the worldwide partner group, is tasked with a single mission — to help partners build a profitable cloud business.

And from the way things look today, some cloud partners are already off and running profitably. For every dollar that a Microsoft cloud partner – who reaps 50 percent or more of annual revenue in the cloud – sells or deploys in their cloud business, they make $5.87 on attached services, according to recent IDC research.

At Microsoft’s Worldwide Partner Conference (WPC) 2016, Sieger told us that to rally more partners to the cloud, she has three core focus areas: working directly with them and meeting with them one on one; making sure Microsoft’s partner-facing field teams are well-trained and are in a position to understand how partners can build a profitable cloud business (today about 3,000 field reps have completed the online training); and, working with industry analysts to do a deep dive into the area of partner profitability, and using the study findings to create tools for partners. {ad}

“Microsoft doesn’t just want to be a technology partner; we want to be a business partner to our partners,” she said. What that means is sharing best practices and tools.

In conjunction with research firm IDC, for example, Sieger’s group did three global surveys, as well as a 25 channel-firm study, essentially taking a deep dive into cloud partners and the levers for profitability. Research findings started rolling out in March.

At that time, Microsoft released its first eBook based on the IDC research – “The Modern Microsoft Partner Series, Part 1: The Booming Cloud Opportunity, 2016” – which looks at market trends and how customers buy. IDC forecast that by 2020, the greater cloud opportunity would reach $500 billion.

“That includes project services, managed services, infrastructure as a service, PaaS, SaaS — so that’s the opportunity by 2020,” said Sieger.

Some other eBook info is about customer adoption. IDC found that 80 percent of 11,000 global customers are actively …

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… deploying or are embracing the cloud, and only 8 percent of customers weren’t interested in cloud, a figure that’s down from about 21 percent just one year ago.

With the cloud opportunity looking very here and now, it’s no wonder Microsoft’s messaging to partners is “everything cloud” and the vendor’s biggest enablement endeavors are focused on the cloud and helping partners modernize their businesses.

Not only are business customers embracing cloud, they’re picking up the pace. Again, 9 percent of survey takers reported that they’re “cloud optimized” or fully leveraging the cloud; however, 45 percent said they want to move to a more mature cloud state – or be cloud-optimized – in two years.

Since March, Microsoft has rolled out four additional eBooks – “Part 2: Differentiate to Stand Out”; “Part 3: Modernize Sales and Marketing”; “Part 4: Optimize your Operations”; and, “Part 5: Deliver Customer Lifetime Value,” which was launched this week at WPC.

“These [pillars] are the attributes we see in partners building a profitable cloud business,” Sieger shared with us.

On day three of WPC, Microsoft channel chief Gavriella Schuster talked about additional enablement investments the company is making in cloud partners.