For Microsoft, partners play an intrinsic role to bolster its growth for its cloud business.
The company had made several changes to simplify its channel engagements and remove all the barriers that will allow its partners to seize the new digital transformation
opportunities. Speaking exclusively to CRN, Rajiv Sodhi, General Manager – Partner Ecosystem, Microsoft India, talks about the channel directions for 2018
Could you explain Microsoft’s One Commercial Partner(OCP) and its need?
Starting our last financial year, we made a big shift in our partner approach. The first change was making Microsoft more partner-centric. We are a fairly large and complex company. Previously, there were 17 different teams inside Microsoft who used to work with different partners to talk and manage partners; and every team had its own views on partners. Based on our partners’ feedback, we decided to merge all 17 teams into one unit called ‘The One Commercial Partners’ organization, a global initiative. The reason behind this move was simple. We’re bringing together partner-focused teams from across the company into one organization. One Commercial Partner harnesses our partner expertise and knowledge – technical, marketing, business development, and programs. It brings together the things that work so that every partner can benefit, regardless of size, business model, or geography. This organization is not just partner-led, it’s partner-first, and it was designed to put our focus on your success and growth. All of our partner-facing roles will have the responsibility to work with you in one of these three primary functions: Build with, Sell with and Co-selling. Earlier in the past we had combined ‘Build with’ and ‘Sell with’ team, but now we have separated the two out. One is focusing on building partners’ capabilities and other is taking them to market.
Can you dwell more on Microsoft-Partners co-selling concept?
Our focus on selling with partners and bringing new solutions to market and connecting with customers is an area where we are seriously focusing. A third big change we had introduced was the concept of Co-Selling – what it does is, in this partners and Microsoft are selling together in front of the customers. As we want more solutions to the market and in co-selling, we retire our own sales teams quota based on the partners build solution/IP that he will sell. So now you have sales force team inside Microsoft which is fully vested in the partners’ IP and partners’ solution being sold in the market and paying our own people on their solution. In co-selling, we are taking these IPs which partners are building solutions based on our platforms and when the deal gets closed, we take the portion of that and retire the quota. This way we are reducing all kind of friction between Microsoft and partners. Co-selling provides comprehensive sales and marketing support for partners building solutions with Azure. Azure is the only public cloud providing partners with this incredible benefit through which Microsoft sales representatives are paid up to 10 per cent of the partner’s annual contract value when they co-sell qualified Azure-based partner solutions.
How do you ensure partners’ profitability within OCP?
Partner Profitability is the most crucial proposition we offer to our partners whether you are doing business on cloud or on-premise or somewhere in between, Microsoft ensures partner profitability for our cloud focused partners with >50 per cent cloud mix having 2X growth, 1.5X gross margin than non cloud partners. Global research suggests Microsoft partners generate 19 per cent higher margins than competition. Moreover, we have doubled our investments in FY 18 driving Azure and CSP motions, our partners can earn >50 per cent of the revenue they generate via Azure on CSP range of programs supporting pre-sales, sales and consumption.
How is the cloud partners ecosystem gaining momentum compared to on-premise business?
We are seeing that our cloud ecosystem of partners has been accelerating year-on-year. With the newly discussed changes, we will further strengthen our cloud journey with our partners’ support. Overall, we have 9,000 partners in India and about 430 new partners are getting added every month. One in nine is a unique cloud partner in India. Globally, 95 per cent of Microsoft’s revenues comes from partners and we have the largest cloud partners ecosystems as compared to our competitions.
Will the new partner-focused initiatives will bring more business opportunities?
The reason we carried these enhancements was to keep our partners ready to address the need of customers’ world. We know digital transformation is the over-arching theme with every customer, as the data is getting bigger and doubled. In every two years the total world data is getting doubled, but what is fascinating is that just less than five per cent of this data is getting analyzed. Without data insight, this data has no value. Having said that, we see that startups are investing more on driving meaningful insights from this data. For example, companies like Uber, Netflix, Flipkart and Skype do not control underlying asset they offer. The underlying strength of these companies is the software platform. Today, Microsoft sees these opportunities with every customers. With the wave of digital transformation, data is being used in multiple departments for better decisions. Every inch of a company is opening up that means we will need more solutions and partners who will build such solutions. We need partners to reach out to these customers using our platforms and drive our cloud business.
What are the top three channel direction Microsoft has set for its partners in 2018?
We are very clear with our channel directions; one is that partners need to have complete insight about its customers’ businesses by spending more time with the customers and their business needs and challenges, so that our partners can build a strong alliance and contribute largely for business success. The second direction is building the right capabilities. We have invested resources to bring out the right capabilities in our partners and their teams. We are emphasizing on these directions at various forums developed for our partners. Recently, we have concluded our quarterly partner leadership conclave in Gurugram, where 200 partner leaders and 100 of Microsoft’s top leaders met together. It’s a giant partner networking event in which we carry out around 300 meetings in six hours.