As the CEO of Interlink Cloud Advisors in the Cincinnati area, Matt Scherocman has been selling cloud for a long time. Having launched the born-in-the-cloud startup after observing the opportunity from inside Microsoft, Scherocman has navigated a lot of change in how Microsoft offers cloud services. In this guest post, Matt shares his secrets for selling to customers under Microsoft's Cloud Solution Provider model and for competing with Enterprise Agreement inertia.
Interlink has seen it all when it comes to selling Microsoft's Cloud Solution Provider (CSP) licensing program. We have had tremendous success over the last eight years of our business, but we also know the tremendous frustration it can bring. Licensing itself is constantly changing, and it can be confusing and complicated.
Microsoft and other partners often ask us what has made us successful and how we overcome challenges. Here are some pointers:
1. Figure Out the Solutions Before the Licensing Program
I know that it sounds simple, but it is amazing how tough this can be. Even I catch myself sometimes talking about a Microsoft bundle of products and what comes in them.
Instead, our success has come from spending more time talking about customers' needs. What initiatives do they have to accomplish this year? Then, take the customer's needs and guide them to the right bundles of products and licensing plan that could be the best fit.
2. Sell the Bundle
Microsoft's bundles are the key to selling larger licensing packages. Knowing what is included in the bundle is immensely important. How many of your salespeople can name the key components of Microsoft's Enterprise Mobility + Security (EMS) suite? Do they even know that the Identity and Threat Protection Bundle exists?
3. Invest in Education
A lot of success in CSP selling comes from real-life experience. Each program has its own challenges, strengths and quirks.
For example, say a customer purchases the Microsoft 365 (M365) bundle, which includes Windows Desktop licensing. The software licenses don't actually show up in the customer's portal until the CSP adds a zero-dollar SKU for Windows to the purchase.
4. Play Up Support
The CSP program's strength comes from the requirement that the partner provide the support. Local partners get to know their clients. They take great notes on what is in their environment and what things coexist with Office 365. We know customers' names when they call in and which support person they like to work with.
We frequently troubleshoot more than Office 365. One small example is an Enterprise Agreement (EA) customer who was on the phone with Microsoft support for more than 24 hours straight for a mail flow issue. When they called to get our help, we referenced their configuration and noted that they had a third-party spam filter. We then helped them troubleshoot the connection between the third-party and Microsoft -- and fixed the issue in less than 15 minutes.
5. Know How To Sell Against EAs on Price
Here are some key points:
- Since October 2018, the automatic discount for purchasing under the EA agreement is gone. This was an automatic discount of 3 percent that EA customers no longer receive. This means that the price of the EA out the door is the same as list price!
- Microsoft reps can offer negotiated discounts for a newly signed agreement. However, these discounts are frequently in the single digits and tied to the products that Microsoft is currently focused on. Those products are going to be the same ones that Microsoft is incenting partners to sell via back-end rebates. So, typically, partners can be competitive with EA pricing.
- The EA requires an annual payment for the entire year of usage of the subscription. Most customers hate the impact that has on their cash flow and would prefer a monthly subscription, charged as they use it.
- "From SA" is a discount that Microsoft used to offer to clients who moved from Software Assurance to subscription licensing. It is a programmatic discount of 15 percent, but it typically means that the CSP provider cannot touch the pricing offered with this discount. However, only a small percentage of clients have this discount.
- In July 2016, Microsoft increased the minimum user count of an EA agreement to 500 users, but it allowed companies a one-time renewal. Thus, partners should start to see a good set of clients with 250 to 499 users no longer being eligible for renewal in the coming years.
6. Know How To Sell Against EAs on Other Factors
Products on an EA are either locked in for the three-year term of the agreement or they can be modified annually. This gives CSP partners a tremendous advantage in that CSP solutions can be changed on a monthly basis. And practically, they can be changed during any month, versus the EA, where quantities of cloud SKUs can only be changed with notice at the anniversary date of the agreement.
Customers hate paying for licensing that they aren't using. So even things like summer interns can increase the cost of an EA agreement even though the licenses are only used a small fraction of the time. Additionally, Business bundles like the Premium offering and M365 for Business aren't available under an EA. These SKUs are limited to 300 users and don't include on-premises use rights.
For many clients, those limitations aren't a problem, or they find that a subset of their users are a great fit for these plans. The Business Premium plan and the E3 plan are more similar than they are different, and the Premium plan is considerably cheaper -- $12.50 per month versus $20. Not every user needs the features of E3, and it gives CSP sellers a $90-per-year cost advantage without sacrificing their margins.
7. Know Where CSP Is Lacking Versus EA
Four things to keep in mind here:
- EAs have step-up offers, in which a client can add single components of things. For example, a customer might have the M365 E3 bundle, but need the EMS E5 functionality added. On an EA, it is easily added for the incremental price. On CSP, it isn't so simple. A client would need to purchase the EMS E5 package, essentially paying twice for the EMS E3 components.
- The EA pricing for each particular product is locked in for the three-year life of the agreement. If prices are rising, the EA is the best platform. If they are falling, CSP is the best platform. So far, Microsoft has basically kept pricing steady and increased revenue by offering new features and bundles.
- CSP agreements don't include many of the traditional licenses and SA. Customers will likely need another agreement to hold onto these licenses with SA. However, licenses like SQL Server and Windows can now be purchased as subscription licenses, but customers who already have active SA won't want to lose the value of what they have already paid. Frequently, this means that a customer transitioning to CSP will need to keep a second agreement like a Microsoft Products and Services Agreement (MPSA) or Open Agreement for these particular licenses.
- Downgrade rights are also limited in CSP. Office ProPlus, for example, needs to be the current version from Office 365.
The CSP platform has a lot of advantages for customers when it's positioned properly. To do that, start with the basics by figuring out what solution the customer needs and then sell the bundles. Keep investing in education for your people, and make sure your customer appreciates the quality of your support. Finally, stay up to speed on the ins and outs of EA versus CSP pricing, and you'll be able to identify opportunities that are wins for you and for your customers.
Licensing can be challenging to navigate, but a large part of Interlink's success has come from following these seven secrets.
Posted by Matt Scherocman on October 17, 20190 comments
Being a hoster has been a phenomenal business model for many years. The concept was easy: You built a datacenter in your own building or rented colocation space elsewhere, and then you bought hardware and expanded as needed. It was a simple way to earn good money when you did it right with a structured, industrial approach.
For many years, I ran my own hosting company and it was the best of times. But times are changing! With the adoption of megascale cloud computing provided by Microsoft, Amazon Web Services (AWS) and Google, many local hosters are becoming obsolete and losing their customers. Some local hosters will still make a decent living for years to come, but they might benefit from special requirements in a certain vertical or geography.
One good thing is that thanks to the cloud, customers are more likely to accept the concept of moving away from owning and operating their own hardware, so the market for outsourced computing is growing at a rapid pace that should continue. But the odds are against traditional local hosters that are competing with, or duplicating, what Microsoft, AWS and Google are doing.
I have always made sure that my own companies have never been in competition with Microsoft. Instead of trying to play catch-up and come up with odd reasons for a customer not to use Microsoft Azure, it is far better to work with Microsoft and offer something that adds value. Let's be brutally honest: There is no way that a local hoster can keep up with the massive investments that Microsoft (and others) are making. Azure is great today; tomorrow it will become even better and further differentiate itself from the efforts of a local hoster.
If you're a traditional local hoster, what should you do? I think that you should become a virtual hoster and fully embrace the cloud.
Look at what needs your customers have besides just renting capacity. When you do it right, you will realize that the real value is in taking care of workloads, not just providing capacity. At that point, you don't need your own datacenters. When you understand where the real value lies, you can start to decommission your own hosting with little regret and instead use capacity in Azure.
Change your perspective to view Azure as your own datacenter that can offer massive scale, a large number of locations, top-notch connectivity, redundancy and outstanding flexibility when you want to expand or reduce your footprint.
What are the characteristics of a successful virtual hoster? Here's the checklist:
- Owns no datacenter and rents no (or very little) colocation space/hardware.
- Takes responsibility for the application layer and for all dependencies between servers and systems.
- Has written standard operational procedures (SOP) for everything so that tasks are performed in the same way regardless of who is involved.
- Knows advanced networking inside and out.
- Monitors 24/7 and is ready to engage in incident management anytime and anywhere.
- Is a master of prescriptive maintenance and, when systems go down, is best-in-class in incident management so that systems come up in a jiffy (and always does a "post-mortem" and delivers a written incident report).
- Knows how to migrate workloads.
- Knows how to mix virtual machines, containers and software-as-a-service (SaaS) in order to maximize ROI for the customer.
- Has deep knowledge in a few verticals (optional).
- Constantly seeks ways to optimize based on the needs of the customer.
When you see Azure as your best friend and not a competitor, you can become a virtual hoster that is fit for the future. Your people will still be key to your success, as their knowledge is also needed in the era of the cloud. With this approach you will also be able to discover new ways to successfully partner with Microsoft that can elevate your business to new heights.
Per Werngren is an RCP contributor who has held many roles at the worldwide level of the International Association of Microsoft Channel Partners (IAMCP), including chairman and president.
Posted by Per Werngren on September 17, 20190 comments
Over the years, it has been very lucrative for partners to look at where Microsoft is making investments and to make sure that their bets are aligned with Microsoft's.
The level of investment from Microsoft that goes into engineering, readiness, marketing and sales means that partners who make sure to align their businesses with those priorities have a lot of wind at their backs.
For those of us who attended Microsoft Inspire in Las Vegas this past July, there is no doubt that Microsoft Teams has grown in importance. Microsoft is betting hard on Teams and so should Microsoft partners.
Because Teams is already included with Office 365 and isn't available as a standalone product, you can't really become successful with Teams by reselling it. The opportunity is around adding apps that help companies become more efficient and that improve communication internally and with trusted parties.
There are an increasing number of ISVs that are building apps for Teams, and many of them will have a bright future as the market will grow fast. But Teams is also a great opportunity for custom development -- especially with a vertical twist.
Here's a list of five ways to build offerings with Teams beyond just license sales:
1. Implementing Teams
This is often pretty basic, but it is important to make it happen and to make sure that Teams has the right structure for your customer so that it becomes integrated in the business.
2. Reselling ISV Apps
This is an area with great traction right now, and we will see the number of apps multiply rapidly as more ISVs get involved. Your customers will need someone who knows what works best for them and knows how to implement.
3. Building Customer-Specific Apps that Integrate with Teams
Here's a useful link for how to start. I encourage you to especially look at how to add apps built with Microsoft's low-code platform, PowerApps.
Once you have built an app that works really well, you should consider if you can become an ISV and sell a generic version to other customers.
4. Consulting on How To Make Teams Support the Customer's Business Processes
This will require people with specific business vertical knowledge, and you are likely to be able to bill accordingly if you have the right people.
5. Training on Teams
Training services are always a great opportunity, but don't scare the customer and make it too complicated and expensive. Teams probably calls for less classic classroom training and more one-to-one coaching of super users.
Beyond these ideas, I strongly suggest that you start to use Teams internally. Make sure that you do for yourself what you suggest to your customers. It builds trust when you successfully support your own business with Teams, and it makes it much easier to sell to customers when you can talk about your own experiences. It's also an inexpensive way to educate your own people.
Good luck and please share your success stories!
Per Werngren is an RCP contributor who has held many roles at the worldwide level of the International Association of Microsoft Channel Partners (IAMCP), including chairman and president.
Posted by Per Werngren on August 12, 20190 comments
What are the top steps Microsoft partners can take to help their businesses succeed in 2019? We put that question to top experts, including Microsoft channel veteran and RCP contributor Per Werngren.
I have been a leading advocate for partner to partner (P2P) cooperation for several years and in recent years I'm seeing a hockey stick effect, which is marketing lingo for something that takes off and grows like crazy.
P2P is simply on everyone's lips, and the momentum that I saw last year is a great promise for what 2019 will bring to us.
Not only in IT, but in perhaps every industry, we see that companies partner with others. Great examples are to be found in car manufacturing, aerospace, healthcare and real estate. Perhaps General Electric is evidence of a company trying to do too many things and paying the price.
To be successful, you will need to specialize and surround yourself with partners that work together with you. As a Microsoft partner, you have a large pool of fellow partners that you can work with. And Microsoft has transformed into a wonderful company to do business with; in fact, they are now a great business partner – they will help you sell your solutions and products in a fashion that we haven't seen before. And it works.
When searching for partners, Microsoft or others, it is important to have a great pitch that is welcoming and clearly states the benefits for the partner and for the customer.
Finding partners is sometimes hard. You will need to invest time and travel as in-person meetings are key to make this work. My advice is to attend all gatherings arranged by Microsoft in your proximity and perhaps also join meetings in cities nearby. It will take a while until you find great partners. It is often a matter of knowing people, enjoying their company and then finding opportunities to work together. Spending time with fellow partners pays off.
The International Association of Microsoft Channel Partners (IAMCP) is a great association that is open for all partners and they provide, among other things, fantastic networking opportunities in several locations across the United States and abroad. You are always welcome to attend a few meetings as a guest and you will find your nearest chapter on www.iamcp-us.org.
But in order to become really successful you will need a great plan, and that comes from having a great structure. I am overwhelmed by the uptake on the P2P Maturity Model, and I constantly meet partners that have succeeded with this structured approach. If you haven't yet started to work with the P2P Maturity Model, you can find it at www.p2pmaturitymodel.com.
Going back to where we started, the momentum for P2P is great and working with others has never been so popular as it is right now so it is a risk-free prediction to say that this year will be the Year of P2P.
Posted by Per Werngren on March 22, 20190 comments
With diversity and inclusion top of mind for most companies, both the International Association of Microsoft Channel Partners (IAMCP) and The WIT (Women in Technology) Network are working hard to help businesses build programs and take advantage of education that will foster success. A new joint membership promotion makes it easier for respective members to be part of the unique opportunities each organization is driving.
The IAMCP and The WIT Network share an impressive history, with both organizations demonstrating significant impact on this critical agenda. It is this robust and mutually successful growth that has led to an official alliance between the two organizations.
For almost 25 years, the IAMCP has been dedicated to everything that helps partners in the Microsoft network be more successful. This includes partnering more effectively with Microsoft and other Microsoft partners, advocating for change across the ecosystem, and offering in-person and virtual events for education, training and networking.
The WIT Network is a new, vibrant community born out of the IAMCP. It is laser-focused on its mission to address the imbalance that exists in the technology industry by supporting women to pursue a career in technology, encouraging more female entrepreneurs to start their own businesses, and helping more women take up leadership positions.
IAMCP Accelerates Partner-to-Partner Business
The IAMCP's largest global event takes place at Inspire, Microsoft's annual partner conference every year. Here, the IAMCP fosters activities that enable partners from around the world to meet, connect, align, form partnerships, drive deals and accelerate their businesses.
It was at this conference that a small group of women in the IAMCP began to run an annual luncheon specifically aimed at enabling female attendees to meet up and expand their networks. The event became so successful and impacted so many that it spiraled into the members' desire to do more than meet with each other once a year. IAMCP WIT was born and attracted a global audience of women in 80 communities and more than 40 countries. They ran local events, training programs, mentoring circles and philanthropic endeavors.
"Forming and developing as a subcommittee was a great way for us to discover what the women in our community want and need," said Christine Bongard, former IAMCP WIT chair and now president of The WIT Network. "But ultimately our goal and mission to support every woman working in the technology industry meant that our members were keen to branch out and pursue a larger mission."
In September 2018, The WIT Network was created, signing up over 2,000 members in its first month.
Diversity and Inclusion
The formal separation of the IAMCP and WIT included an intention for both organizations to continue to find ways to support one another. At the same time, the IAMCP did not abandon its interest in diversity and inclusion, and the IAMCP board created a new diversity and inclusion position to develop programs that support partners in initiating and fostering a stronger diversity and inclusion culture within their respective companies.
"We are very happy and supportive of the success at The WIT Network," said Sérgio Baptista, president of IAMCP International. "We are equally excited to be working with Microsoft to roll out our D&I [diversity and inclusion] initiatives with our new chairperson, Sarika Malhotra."
"Closing the gender gap while fostering D&I is a big challenge for our industry," said Bongard. "There is no 'one size fits all' approach or mentality. Both IAMCP and The WIT Network are offering unique programs and opportunities. That is why we believe that our members can continue to receive value if they join both organizations."
| IAMCP: What You Get |
The WIT Network: What You Get |
| Local meetings at chapters around the world |
Local meet-ups at communities around the world |
| Philanthropy at the chapter level, aligned to local interests of each chapter |
Philanthropic mission to provide STEM training to less advantaged communities with programs currently running in Haiti and planned in India |
| P2P Maturity Model: Online training |
Roads to Revenue: Sales skills training for women in technology |
| Ongoing P2P activities and programs to foster and drive meaningful partnerships |
Global Mentoring Circles: Align with a mentor in a virtual community |
| Diversity & Inclusion: Designed to reach all levels of IAMCP and its members for measurable results. |
Diversity & Inclusion Training: Unique program developed specifically for WIT |
| "Ask IAMCP" Webinars on Demand: Topics of interest are presented to members |
We've Got WIT Webinar Series: Monthly webinars promoting topics of interest for members |
| Online membership portal for access to materials and a global calendar of events |
Online membership portal for access to materials and a global calendar of events |
| Annual kick-off, meet-up and activities at Microsoft Inspire |
Annual Leadership Conference in-person event on International Women's Day |
|
The IAMCP and The WIT Network are continuing to work at the local levels to run joint in-person events. "When we looked at our membership lists, we realized that the crossover was only about 10 percent," Baptista said. "It made total sense that we could each broaden our reach by teaming up locally."
"Both organizations provide value," Bongard said, "and there is really no overlap in our programs. We want to make it easy for members who need to belong to both organizations."
The IAMCP and The WIT Network are offering a limited 25 percent membership discount until June 30, 2019. After that, the mutual discount will remain in place at 10 percent.
If you would like to know more about how to sign up for joint membership in the IAMCP and The WIT Network, and to learn more about the associated benefits, please e-mail [email protected] or [email protected].
Gail Mercer-MacKay is an executive blogger and board member for The WIT Network and IAMCP Canada.
Posted by Gail Mercer-MacKay on March 21, 20190 comments
What are the top steps Microsoft partners can take to help their businesses succeed in 2019? We put that question to top experts, including Howard M. Cohen, Senior Resultant, The Tech Channel Partners' Results Group.
It has now become incredibly easy to know how to optimize your Microsoft relationship and enjoy the best of their support and attention. Easier than ever.
From the very beginning of the Microsoft Partner Program (MSPP) through to the Microsoft Partner Network (MPN) it has always been all about "The Big Bet." While the current Big Bet at any given time has changed regularly, causing partners to have to be very light on their feet, there has always been at least one Big Bet.
Smart partners kept a close eye and an ear to the ground to stay ahead of what the next Big Bet was going to be. At one time long ago it was Windows itself. At another time it was the internet and Internet Explorer. Windows Server took its turn. As it emerged, System Center occupied the Big Bet space for a while. More recently SharePoint was the Big Bet, then Office Communications Server (OCS), which would become Lync.
But now the very nature of the Big Bet has changed, and every partner's recognition of that has become an existential challenge.
When he became CEO, Satya Nadella told us flat out what the Big Bets would be for the foreseeable future: "Microsoft will be the platform and productivity company." He was referring to Azure as the platform and Office 365 as the productivity. Today, if you ask Microsoft sales "blue-badges," they'll tell you that they no longer receive compensation for on-prem anything. Just cloud. Just online services.
But it is a mistake to think that selling Azure and Office 365 will keep you in Microsoft's good graces. It's no longer quite that simple.
Investing as enormously as Microsoft has in the infrastructure that is meant to replace all infrastructure, and choosing a consumption-based pricing strategy, Microsoft has required itself to be successful or perish. It's not enough for customers to simply enter into Azure subscriptions. If they don't use the services, they don't pay. If they don't pay, those subscriptions mean nothing.
We've been down this road before, with tremendous pressure to deploy all the "shelfware" customers ended up with when signing Enterprise Agreements (EA). But in that case the software was already paid for and Microsoft was targeting renewals.
Microsoft is now targeting survive-and-thrive.
You may notice that Independent Software Vendors (ISV) who sell apps that run on Azure have become the premier partner for Microsoft. Anything that drives more consumption falls within the province of this new Big Bet.
My last several Marching Orders have focused on the importance of developing your own intellectual property (IP) for resale. If your IP requires more Azure consumption, you will find unbelievable support in marketing it from Microsoft. Truly, you may have to ask them to stop offering you more marketing programs. They shower you with love when you increase Azure consumption.
The other way to be a Big Bet Superstar is to sell and deploy anything that requires more Azure consumption. You don't have to learn how to code, or otherwise build apps. Partner with those beloved ISVs and you, too, will be a better Big Bettor.
It has never been harder to divine what the long term future looks like for the Microsoft partner ecosystem. This has been the most all-consuming change of all for Microsoft. You need to sit down with your team and talk about how you're going to plan for the future. Many ISVs are marketing to partners now to get them to use their tools to service customers, rather than sell them licenses. Which will you choose to partner with? How will you let Microsoft know that you're driving increased Azure consumption?
If you truly believe that this advice doesn't apply to you, it has been very nice knowing you.
It's that serious.
Posted by Howard M. Cohen on February 21, 20190 comments
What are the top steps Microsoft partners can take to help their businesses succeed in 2019? We put that question to top experts, including Mark Rice, General Manager, Managed Services Partners, Microsoft.
As customers digitally transform themselves, all partners are also going through some level of transformation necessary to take advantage of the growing customer demand and opportunity in the cloud. The promise of the recurring revenue of long-term cloud managed services is a clear end game to their customer engagement. This is a journey, and can be looked at in three pillars: business transformation, capability transformation and sales and marketing transformation.
Business Transformation
Customers are looking for dynamic solutions focused on business outcomes from their partners, who can help them navigate the move to the cloud. But they're not just looking for partners to help navigate, they're looking for help optimizing and governing their use of the cloud. Partners who are best positioned to deliver this to their customers are those who can deliver a full customer cloud engagement lifecycle. This sounds very simple, but taking a customer from plan/design through migration, application modernization, optimization and running requires solutions, tooling, automation and, of course, a ton of talent. Partners who adapt to guide customers through this cycle will have a competitive advantage over their peers in the coming years.
Capability Transformation
Higher value cloud services are driving profitability and higher margins for partners. Many partners tend to offer basic IaaS management services, but those who can build and manage agile, cloud native apps will see margin differentiation. Many are finding that to sustain and grow margins, significant investments in IP, tools and people are needed. For most cloud partners this means striking a balance and finding the right inflection points in their businesses to accelerate transformation from existing business models to new ones, such as migrating from traditional hosting to modern cloud-managed services.
Sales and Marketing Transformation
The transformation of sales, GTM and operational excellence is a clear challenge for partners as they move to a cloud model. These range across 're-wiring' their customer management systems (automation), sales compensation models (moving from large deals to incremental consumption through new service offering penetration) and leveraging digital marketing. The shift also includes how they partner with ISVs, other services companies and even their historic competitors. However, although these changes may be challenging at first, being able to provide high value cloud offerings to customers will open up a whole new world of opportunities and profit to partners.
It is an exciting time for our partners, the business opportunity is incredible, as is the potential to impact our customers' business. Although there may be growing pains while making the necessary transformations, the impact and reward in delivering optimized cloud services far outweighs the costs.
Mark Rice is general manager for managed services partners at Microsoft.
Posted by Mark Rice on January 29, 20190 comments
What are the top steps Microsoft partners can take to help their businesses succeed in 2019? We put that question to top experts, including Keith Lubner, Chief Strategy Officer, Sales Gravy.
Your success will be predicated upon how well you can manage your time in 2019.
Collectively, we are consumed by inordinate amounts of data, by vast arrays of communication methods, and by the demands of an "instantaneous" society. As professionals, we are being asked to respond quicker, be more thoughtful and compete in more situations.
These distractions have caused an immense amount of pressure to be placed on individuals.
The way to solve this dilemma is by being deliberate in blocking out each hour of day. The result is that you will force yourself into powerful hours of intense productivity.
The irony is that managing your time is simplistic in nature but difficult to maintain. Most people struggle with being efficient and effective, but the winners in 2019 will master the time blocking discipline and will find ultimate productivity.
Keith Lubner is Chief Strategy Officer at Sales Gravy and Managing Partner at C3. Keith acts as an advisor, mentor, and executive coach to several of today's leading sales and channel focused organizations on strategies, tactics and programs to accelerate growth. He is a world-wide recognized expert on sales, sales enablement, channels, marketing and leadership. His training programs and workshops have been delivered across the globe to several start-up and multi-national organizations. Keith can be reached at [email protected].
Posted by Keith Lubner on January 24, 20190 comments
What are the top steps Microsoft partners can take to help their businesses succeed in 2019? We put that question to top experts, including Toby Richards, General Manager, Partner GTM and Programs, Microsoft.
Going into 2019, we're hoping more and more commercial partners, including services partners and independent software vendors, take advantage of the Microsoft portfolio of go-to-market services. Partners should focus on attaining technical competencies and delivering validated solutions in order to remain competitive.
In the past year, Microsoft has released new programs that help partners differentiate themselves in the marketplace, including the Azure Expert MSP program, the release of the company's security competency later this year, and advanced specializations in the area of SAP solutions on Azure and Azure Stack partners. I encourage partners to take advantage of these programs that work in tandem with Microsoft to differentiate.
By going to market with Microsoft, partners will have access to new and improved partner referral and solution marketplace capabilities (Azure Marketplace and AppSource); access to the Cloud Solution Provider program that allows partners to package value-added services with Microsoft cloud platforms for fully integrated solutions; earned benefits that connect partners with regional marketing services to create awareness of new solutions; and the opportunity for connection to Microsoft sales teams through partner solution co-selling.
Creating new partner-to-partner market opportunities that deliver on integrated solutions for small and large businesses, and which address unique industry solution needs, will be a key integrator for success in the coming year. If partners use these resources to go to market with Microsoft and each other, opportunities to excel with new solution design, geographic expansion, and new business growth opportunities are sure to follow.
Toby Richards is general manager for Partner GTM and Programs at Microsoft.
Posted by Toby Richards on January 24, 20190 comments
What are the top steps Microsoft partners can take to help their businesses succeed in 2019? We put that question to top experts, includingMike Harvath, President & CEO, Revenue Rocket.
The cloud is a means, not an end.
Success in modernizing IT in 2019 and beyond, through the cloud, will be driven by a complete standardization and through intentional growth strategies.
What we're seeing is that cloud adoption has been increasing at a rapid pace. According to research from Forbes and Gartner, cloud-specific spending is expected to grow more than six times the rate of general IT spending through 2020. Many companies, both large and small struggle to get the full value of this trend of moving their enterprise systems to the cloud, despite many organizations finding success by implementing specific software-as-a-service (SaaS) solutions or adopting cloud-first strategies.
What we've found is that companies tend to fall into the trap of confusing moving IT systems to the cloud with the necessary transformational strategies centered around the full value of the cloud. Simply taking legacy applications and moving them to the cloud through a "lift-and-shift" mindset won't automatically yield the benefits that cloud infrastructure and systems can provide. In most cases, that approach can result in IT architectures that are more complex, cumbersome, and costly.
The real value of cloud doesn't come from an approach that's focused on tactical decisions. Instead it's one that's part of an overall strategy that pursues digital transformation through the enablement of standardization and automation through an open API model. This strategy must be focused on aspects like developing a modern security posture, working within automated agile constructs, all the while leveraging new capabilities to drive innovative business solutions. The cloud certainly isn't a prerequisite for any of these features, but it does enforce them. Firms who embrace cloud capabilities using these methodologies will create a next-generation IT culture where the result is business growth and innovation in this rapidly evolving digital era.
Lift-and-shift
Cloud solution providers such as Microsoft, Amazon and Google will appeal to many firms because of their platform benefits such as pay-per-use, scalability, network resiliency, and self-service. In 2019, we're expecting that these platforms will lead to much lower IT costs, quicker go-to-market, and better Quality of Service (QoS) when compared to traditional IT offerings.
As firms begin to adopt new methodologies in cloud optimization and modernization, there will be two major issues.
One, business applications created using the traditional IT paradigm won't automatically function with all the dynamic features of the cloud. Because of this, applications must be configured for fixed and/or static capacities in data centers.
Second, the current typical technology workforce is well versed in developing business applications in a traditional IT framework and will have to be reskilled for the trending cloud environment shift. A great example of this is IT security. Traditional IT environments are ones that adopt a perimeter-based "castles and moats" approach to security. Ideally, they should be creating cloud environments that are more like modern hotels where a keycard is necessary to access floors and rooms. Moving and migrating to the cloud, based on the traditional approach, will most definitely have an adverse impact on cybersecurity unless legacy applications are developed, deployed, and reconfigured for the new security model. As a result of the lift-and-shift dynamic, we've found that many firms are stuck supporting both their inefficient traditional data-center environments or inadequately prepared for trending cloud implementations.
Best process to cloud optimization and transformation
Perhaps the best process in executing cloud optimization and transformation is understanding the upside and investments needed.
This is because this long-term approach needs active commitment and a clear mandate from the CEO, technology leaders, and stakeholders. Specifically, there's four key points companies should address for successful cloud adoption.
1. Sourcing
The struggles are that most companies won't build their own cloud technology stack, and these same firms will find it even more difficult to maintain it. Partnering with public cloud providers and their partners through sourcing relationships in order to build/manage the cloud stack is much more practical. By doing this, the end user clients will find that achieving success will be much more scalable.
2. The right cloud operating model
Public cloud requires IT to manage infrastructure as code, unlike most traditional operating models.
This requires software architects and engineers who understand coding, storage, and security protocols of public cloud. This equates to a massive upskilling of the infrastructure organization as well as the operating model in which they work. Specific teams need to be assigned to configure and manage the production environment, and this will be the foundation of the future cloud operating model.
3. Remediation of legacy applications
In order to align with security and capacity requirements, existing applications will need to be refactored at the infrastructure level. Security must be built into these applications, and must work in a more automated fashion, which will require significant attention from application teams. There will be challenges in this and companies can address this hurdle by creating a clear business case for modernizing legacy-applications by aligning migration schedules with major application upgrades or replacements aka modernization of said applications. Adopting foundational solutions with open API's will make these remediation efforts much easier.
4. Building IT teams with the right skills
IT and technology professionals must be able to build and code applications on the cloud in a secure and timely manner. Companies won't be able to do this without hiring and training the right cloud experts, then introducing them into development teams for retraining or upskilling their existing workforce. The expectation is that this aggressive approach will reply on commitments from leadership in the form of money and time. Typically, these types of approaches can take two to three years and that's because multiple things need to happen for cloud transformation to take place with the right people and right skillsets. This approach has significant management challenges, but with strong leadership, it's the fastest path to transformation.
We're seeing both an excitement and reluctance as many partners take the plunge into cloud. The reluctance is usually driven by concerns from a lack of buy-in, or a reluctance to invest the required resources in a multiyear effort. Conversely, organizations who embrace the new methodology of optimization AND modernization of the cloud achieve significant benefits in the medium to long term, by adopting the cloud's agile and automated operating model within their traditional IT approaches. Our prediction for 2019 as part of our Marching Orders will be that partner organizations who approach their cloud strategies this way will be ready and prepared for a very bright future indeed, in helping their clients with successful cloud transformation efforts.
Mike Harvath has spent his entire 30-year career advising partner companies on implementing winning growth strategies and facilitating mergers and acquisitions. As president and CEO of Revenue Rocket, he and his team have advised over 500 partner companies on reaching their growth goals.
Posted by Mike Harvath on January 22, 20190 comments
What are the top steps Microsoft partners can take to help their businesses succeed in 2019? We put that question to top experts, including Gavriella Schuster, Corporate Vice President, One Commercial Partner, Microsoft.
It's 2019, are you ready to give customers what they're craving? Customers have sky-high expectations of both Microsoft and our partners. We all need to rise to the challenge to meet customers' needs. The good news is, with our technology and your expertise, IP and services capabilities, we have the perfect ingredients for success.
In 2019, Microsoft is calling for partners to up their competitive edge through collaborative innovation as we develop even more effective resources and investments for our partners to win in the market. The demand for cloud and other emerging technology is high, and the innovations from Microsoft -- coupled with the incredible partner leadership in our ecosystem -- present both opportunity and a responsibility to delight our customers with solutions that drive their digital transformation.
The creativity of Microsoft partners never ceases to amaze me. We're seeing major trends in partners building unique value that addresses customer needs, particularly around industries and verticals. This added value is accelerating the way customers drive forward on digital transformation. In 2019, we want to make sure partners that have unique IP -- particularly ISV organizations focused on packaged solutions -- are getting their applications into Microsoft's Appsource and Azure Marketplace. Doing so makes their offerings more discoverable and helps drive the co-sell motion that connects with the full partner ecosystem. With all of the opportunity ahead of us, partners need to be where customers can see them. Change is happening. So now is the time to take advantage of the unmatched exposure available in Azure Marketplace and Appsource.
The past year has been full of fast and furious change for our partners and Microsoft, as technology and the demands of customers continue to grow. Together, Microsoft and our partners have been more flexible and responsive to the market than ever before. It's exciting to see the resulting momentum in partner engagement and co-sell; cloud adoption and spend is growing by double digits, and CSP growth is in the triple digits. But this growth can only be sustained through commitment and partnership from both Microsoft and our partners. Our unique advantage is you, and the value you bring to customers.
Gavriella Schuster is corporate vice president of the Microsoft One Commercial Partner (OCP) organization. At Microsoft since 1995, Schuster has held top worldwide partner leadership roles for Microsoft since May 2014.
Posted by Gavriella Schuster on January 17, 20190 comments
So you're a startup? Congratulations on a wonderful and highly exciting journey!
I have started and sold companies my whole life. Now, I focus on investing and helping entrepreneurs. Based on my experience, here's some advice from the trenches.
1. Focus, focus, focus! Don't try to do two things at the same time. I often hear excuses that developing a new offering didn't take much effort, that this might be a new opportunity, or that we got to send a bill for this special assignment. But what I really hear is that your scarce resources are being spread out, making everything weaker. As an investor, I want your core focus to be on one thing -- and if that one thing is not viable, then let's find another thing to focus on.
The jack-of-all-trades era is gone. With stiff competition and innovation on a global scale, you will need to focus on being great at one thing rather than mediocre at two things. Stick with your business idea or develop a new and better one. But only one idea at a time, please! When you become bigger and stronger, you can, of course, consider adding new offerings. But that will be tomorrow and not today.
2. Margins should be high. Great software products and great service offerings will give you a great net margin. That means that your marginal cost needs to be low. (Think of an airline selling one more seat; the marginal cost is limited to a bag of nuts.)
3. Selling should be done over the Internet through digital marketing, not by sending out bodies to meet with potential customers. Sending out bodies might work in your hometown, but it will be super hard for you to scale up and sell in other cities, counties, states and countries. If you can sell without sending out sales reps, then I will listen.
You can, of course, do this through a network of partners. And I don't like it if you have a call center doing outbound sales calls; that is just a little bit better, but not good enough. I don't mind an inbound call center helping customers with their experience.
4. A global mindset. Being able to sell outside your local market and win on a global scale has never been easier than today. This is something that you should always have in mind as you start your new venture and make sure that this is influencing your decision-making. I find many companies with great business models and wonderful offerings, but they are hard to bring to other markets. Therefore, I most often decline making an investment.
5. Subscriptions will give you recurring revenue, and that is a fantastic thing that everyone loves. It will take longer for you to get the revenue compared to selling projects or traditional licenses, but when it finally comes, it will be more robust and more predictable. And investors love recurring revenue! When you're selling your company, you will thank me for this advice, as it will give you a much higher valuation or enterprise value (EV).
6. Live the digital life and love digital marketing. I often meet companies that are in the technology space, but they do not understand the value and concept of digital marketing. They have a Web site, perhaps a blog, a Tweet now and then, but they have no plan or strategy for how to regularly create new content and make it visible to their audience. I honestly think that most Microsoft partners are better at talking about this to others than doing it themselves.
Digital marketing is an area where I always advise my companies to invest more. When you master digital marketing, you'll be king!
7. I love artificial intelligence (AI), but I want to hear a decent story. Just adding AI with no real purpose will not excite me.
But if your solution is driven by AI and this is a differentiating factor, then I will listen and fight to invest. AI will change our lives and there are many ways for a startup to leverage the AI bandwagon, so this is really an area with a great future.
8. Don't be afraid to fund your company with revenue. There is nothing bad about building revenue. When you've got revenue and you're cash flow-positive, you'll be in a much better position to talk to investors. Having customers that are willing to pay for your services is proof of what you're doing, and it will help you pay the bills and arrange external investments -- which you may not even need if your revenue is great.
9. The team is crucial for success. Many investors say that they invest in the team first and in the product second. The right team will find the right product and the right business model. It is important that the team has multiple talents and has the right combination of experience and disruptive thinking (i.e., inexperience). It is crucial to get along with each other, both within the team and with investors. Teams that don't get along well will never perform!
10. Embrace diversity. Your customers are diverse and your team should be the same. Embracing diversity will also give you access to a much larger talent pool. And you'll be in a better position to understand your customers' needs. This is especially important when entering new markets.
11. Don't forget the customer. Having the customer top-of-mind will help you become successful. If your services are highly appreciated by your customers, it will be hard to not become successful -- and satisfied customers are the best advocates to help you win new customers. Being customer-centric should be part of your DNA, and I want you to be proud of what you do for your customers.
12. Be honest; don't try to hide your problems because, eventually, I will find out. Instead, involve me in what is not working and seek my advice for how to resolve it. The true advantage with investors and what differentiates them is often the quality of their advice and the value of their networks. A fellow investor friend told me, "They will surely take your money, but what they will really value is your advice."
And remember, being a startup is a fantastic journey that will reward you in wisdom, knowledge, freedom and, hopefully, financially. And when you've become successful, don't forget to give back to new startups!
Posted by Per Werngren on October 10, 20180 comments