Marching Orders 2018: Place the Right Bets

What can Microsoft partners do differently in 2018 to make a business breakthrough? We put that question to 16 top experts, including PER WERNGREN, CONTRIBUTING EDITOR, REDMOND CHANNEL PARTNER MAGAZINE. For more tips on finding success in the Microsoft channel in 2018, read our full Marching Orders feature here.

Every year someone is moving the cheese. To be successful you will need to identify what has changed and determine how to act.

Being a Microsoft partner in 2018 will be great as Microsoft continues to bet heavily on innovation and to embrace the partner channel. But it is important that partners also make an effort to innovate on their own because doing that in combination with Microsoft's investments will help us all to grow our collective market share. We need to win more in Apple-land and Google-land. The economy is expected to grow throughout 2018 and parts of 2019, and IT is being integrated even more with how to drive a successful business. These are great times to be in IT as long as you place your bets right!

In the past, the Microsoft partner conversation was often about Microsoft Competencies (i.e. practice types). But now we see a big change as we care more about which verticals we serve. Several verticals are underserved and have a great demand that is driven out of Digital Transformation. I am personally convinced that health care, finance and public sector are great bets from a vertical perspective. Be aware, though, that if you're new to public sector, the processes associated with selling within that vertical are often slow and complicated.

From a practice and technology perspective I am convinced that artificial intelligence, machine learning and augmented/virtual reality are truly safe bets for the future. There is a great demand from customers in these areas and investors are eager to jump on the bandwagon and support such companies. But competition is stiffening, and it is important to not only have great knowledge. You will also need to make sure that you know how to go to market and sell your products or services. Marketing and selling is often a weak point for Microsoft partners as many have not fully embraced digital marketing and learned how to sell without sending out guys in suits to make expensive customer calls.

When you combine the right vertical with a deep knowledge and great technology offerings you will have a very successful combination. And don't forget that subscription-based recurring revenue models are always more fun than repeatedly having to sell projects.

Where not to bet? This sounds negative but it is important to recognize that there are several areas that will not be successful going forward. One of them is to be to general as this is the era of specialization. Customers wants to deal with partners that are great at something rather than good at everything. Try to narrow down your portfolio of offerings and find partners that can help you with the areas that are outside your own scope. I would be negative to traditional infrastructure practices unless you have carved out a very special niche.

Setting up and managing servers with a focus on hardware and operating system is an area that is best handled in the cloud where tasks that previously demanded specialized staff are now commoditized and can be handled by less skilled people (or even automated). Many traditional systems integrators will need to either retrain their staff or downsize if they don't find out how to be relevant dealing with services in the cloud.

Another pitfall is if you just resell without adding any additional value. Without adding your own IP, reselling is a race to the bottom. Customers will no longer do business with you just because you are a nice guy. Instead they want to deal with someone who can truly provide value. If they just want a reseller, you will face competition that will be hard to beat and leave you with a less than acceptable margin.

Everything above is important also for the ones that see 2018 as the year for them to merge or make an exit. In order to attract someone to invest in your company you should make sure that you are geared for the future and not stuck in the past as that will help you get a premium offer. Investors love someone that has a clear vision of their position in the future.

Lastly, I think that cybersecurity will continue to grow in importance and there are great opportunities for managed service providers as the villains becomes savvier and customers need proactive protection. This market is enormous as everyone needs to protect themselves – both companies and households which means that you can easily find a sweet spot in the market to address.

There's opportunity out there this year. Enjoy!

Per Werngren is a serial IT entrepreneur based in Sweden and a staunch advocate of partner-to-partner relationships in the Microsoft ecosystem. He has held many roles at the worldwide level of the IAMCP, including chairman and president.

Posted by Per Werngren on March 22, 2018