Microsoft generated 11,000 co-sell wins through partners, amounting to $5B

Microsoft generated 11,000 co-sell wins through partners, amounting to $5B

Azure accounted for US$2.8 billion of the overall contract wins

Microsoft generated more than 11,000 co-sell wins with partners during the past 12 months, equating to roughly US$5 billion in contract value through the channel.

Revealed on the eve of Microsoft Inspire in Las Vegas, Azure accounted for US$2.8 billion of the overall contract wins, spanning the vendor’s entire cloud suite.

The figures are the result of a shift in approach from the tech giant, with the new-look One Commercial Partner (OCP) roll-out designed to drive deeper collaboration between internal direct sellers and partners.

Specifically, the co-sell incentive results in Microsoft’s enterprise sellers now being paid 10 per cent of the partner’s annualised customer contract value.

Billed as the “largest sales transformation” in decades, the internal revamp at Redmond allows partners to enter new markets and scale, through leveraging the customer relationships and technical expertise of the vendor’s enterprise sales team.

“How we incentivise our sellers and partners has really came through during the past several months which means we have a lot of momentum going forward,” said Toby Richards, general manager of OCP at Microsoft.

Since launching in early 2017, the OCP roll-out is split into three primary functions - build-with; go-to-market and sell-with, backed up by co-sell capabilities.

“I think we’ve seen the most traction in the build-with side of the program because this is an area we’ve worked with partners in the past on,” Richards added. “That’s in terms of technical enablement and getting our solutions to market.

“It took a while for the sell-with to gain traction and I honestly think that’s the feedback you would receive from a number of partners also.”

According to Richards, the shift represents a “cultural change” for Microsoft, as the organisation transitions from having a CIO-centric conversation around an enterprise agreement, to having a business development conversation around solutions.

“I think our partners were ready to go on day one, but I think culturally within Microsoft we weren’t,” Richards acknowledged. “That shift has taken quite a while but during our third and fourth quarters, we’ve really seen the traction and customer wins.

“About 75 per cent of the 11,000 wins happened within the last five months, with our sellers really grasping on to the solutions conversation and the opportunity available.”

Spanning the entire financial year - which ended on 30 June 2018 - 95 per cent of Microsoft’s commercial revenue went through the channel, with the vendor providing more than a million customer leads to partners.

Cloud solution provider (CSP) revenue also witnessed a strong 12 months, increasing 234 per cent year-on-year, backed up by over 72,000 cloud partners globally.

With an ecosystem spanning “hundreds of thousands” - believed to be somewhere around the 300,000 mark - more than 7,000 new partners are joining the Microsoft network every month.

The figures also align with those revealed in January 2018, at the half-way mark of the Microsoft financial year.

During this time, alliance partner Barracuda was cited as growing business revenue by more than 300 per cent through co-selling with Microsoft.

“Our global partnership with Microsoft has been a game changer for us,” a company statement read at the time, “due to our co-sell motions and the partner-to-partner (P2P) traction we have cultivated.”

Alongside co-selling capabilities, Microsoft also unveiled new advanced specialisation requirements for the channel, spanning four core areas beyond gold status competencies.

Firstly modern workplace, with spans threat and information protection and GDPR, in addition to Yammer and Teams.

Further specialisations include biz applications across Dynamics 365, as well as applications and infrastructure such as SAP on Azure, Azure Stack and Linux on Azure.

Rounding off the list is data and artificial intelligence, which also includes machine learning, data base migration and cognitive services, as well as big data and the Internet of Things.

“The opportunity we have going forward is to continue focusing on the sell-with but also the go-to-market and how we think about our marketplace offerings,” Richards added.

“They represent a much more significant play in terms of our go-to-market to customers, as well as opportunities around partner-to-partner.”

In reference to the wider ecosystem, Richards said channel collaboration continues to increase as system integrators join forces with independent software vendors (ISVs), while application developers combine also.

“They are putting together a more well-rounded solution for a business development conversation,” Richards added. “I would say go-to-market is where there’s even more opportunities to make that operating model work.”

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