Microsoft today signaled it would soon give independent software vendors (ISVs) that make their offerings available via a Microsoft online store direct access to partners participating in its Cloud Solution Provider (CSP).
The goal is to increase the volume of business for both ISVs and partners that are committed to consuming resources on the Microsoft Azure cloud, says Gavriella Schuster, corporate vice president for One Commercial Partner at Microsoft.
Microsoft by making it simpler to tap into the Microsoft channel is also hoping to attract many more ISVs to not only build applications on Azure but also employ AppSource and Azure Marketplace to market and sell those applications.
“Microsoft is in a position to build the largest cloud marketplace the world has ever seen,” says Schuster.
In the last 18 months Microsoft has enabled partners via various co-selling initiatives on the Azure cloud to generate $8 billion in collective revenue since last July, says Schuster. Those solutions, in turn, have helped Microsoft increase revenues generated by its commercial cloud services by 48 percent, adds Schuster. Schuster says that partners that co-sell solutions with Microsoft have seen deals now typically close three times faster and are six times larger. That, in turn, has led to a 6X increase in Azure consumption rates, says Schuster.
As part of those efforts, Schuster notes that the original 32 managed service providers (MSPs) that agreed to become part of an Azure MSP program that Microsoft launched last year are now generating in excess of $100,000 a month in revenue. Microsoft recently added five more MSPs to that program.
Overall, Schuster notes channel partners of all types are now joining the Microsoft ecosystem at a rate of 7,500 partners a month. The total number of partners participating in the Microsoft CSP is up 52 percent since it was first launched, with those partners now are serving more than two million customers, adds Schuster.
Microsoft is now clearly focusing most of its efforts on partners that add value on top of its cloud services. In fact, Microsoft today signaled it would be offering additional “curated” be offering curated portfolio intellectual property and services that leverage its complete cloud portfolio.
In addition, Microsoft has recently altered its licensing terms to encourage end customers to consume its services rather than rely on third-party services to handle basic cloud tasks, notes Jason Woodrum, director of public cloud solutions for Ensono, a provider of managed services. That shift will require many partners to make significant adjustments to the services they provide, says Woodrum.
“There’s going to be a need for some partners to engage in some self-reflection,” says Woodrum.
In fact, one of Microsoft’s largest partners this week announced it is changing the structure of its operations as it pertains to Microsoft cloud services. Accenture announced it had formed an Accenture Microsoft Business Group in conjunction with Microsoft and Avanade, an existing joint venture between Microsoft and Accenture.
Schuster also notes that channel partners should get used to seeing more end-user organizations participating in the Microsoft channel. Kroger, for example, as created a retail solution aimed at enhancing the in-store shopping experience that will make available to other retailers via the Azure cloud.
Regardless of the type of partners engaged, Microsoft is now making it clear its online marketplace is now viewed as a distribution channel. In fact. Schuster notes partners that have leveraged Microsoft marketplaces achieve an average of 40 percent reduction in cost per lead, and a 2x improvement in sales lead conversion to sales rates when compared to industry averages.
Obviously, Microsoft is not only cloud service provider trying to drive up consumption of its platform via an app store. But it may very well be the only provider of cloud platform that has a ready-made channel to support ISVs that for the most part have never had the resources required to effectively build a channel of their own.
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