Microsoft is looking to bring its channel toward the digital transformation opportunity, but like many in the channel, its channel chief says channel partners are seeing difficulties in the IT skills gap and evolving customer buying habits.
According to Gavriella Schuster, corporate VP of One Commercial Partner at Microsoft, the number of partners transacting through Microsoft's Cloud Solution Provider program grew 83 percent in 2017, with a 64 percent increase in Gold Cloud competencies. The vendor says it now has over 68,000 cloud partners, a 33 percent increase year over year.
However, a lack of available workers proves to be a continuing challenge for Microsoft channel partners, as well as the broader channel.
"The top challenge I continually hear is the war on talent. We continue hearing from partners that there is a skills gap in the market, there's a lack of people trained to work in the cloud," Schuster, who became channel chief in December, said in a press conference today.
In response, a year ago Microsoft launched Azure Skills Training, which has seen 100,000 courses completed to-date. Schuster said cloud training will continue to be a focus area for Microsoft this year.
"The good news is that there are a lot of individuals in the technology ecosystem that we can help retrain into new roles in the cloud to help participate in this new economy," she said.
Adapting to the market
According to an IDC study this year, for every $1 of Microsoft revenue, its partner ecosystem makes $9.64, which Schuster says is double the number reported in 2016. Microsoft claims 95 percent of its commercial revenue comes from partners.
As such, the vendor is banking heavy on partners as it hones in on four solutions areas: modern workplace, business apps, apps and infrastructure and data and artificial intelligence services.
In order to succeed in these areas, partners will have to be able to adapt to changes in the way customers buy.
"Our customers are buying technology differently. They're not buying it from within the centralised IT. More of the business decision makers are actually thinking about their line of business and how they want technology to play a role," Schuster said.
"So in order for us to get them the kind of information and insight [they want], the way the technology can really help them, the right solution, we have to think about the way we sell our technology differently."
She pointed to Microsoft's co-selling program, where Microsoft and partners co-sell Microsoft and partner services and solutions to business decision makers together with consumption-based compensation. The vendor claims in the six months since its launch, the pilot generated $6 billion in partner pipeline and over $1 billion in partner revenue.
Highlighting partners like Adobe, Barracuda Networks, application software vendor OSIsoft and data management software vendor DataStax, Schuster said the pilot led to 5.8 times larger deal sizes than Microsoft selling alone and deals closing 2.75 times faster.
Because of demand, Microsoft has expanded the program beyond ISVs to include any partner building IP on Azure.
"The partners … see higher cloud consumption, which is higher cloud consumption of their services," Schuster said. "Our co-sell notion works because it incentivises Microsoft sellers and enables us to sell together with our partners, and it expands our partners' sales capacity, particularly as we move into large-scale enterprise customers where some of these partners may not have the in, the credibility, or the foothold to have the conversation with the business decision makers of these organisations."
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