Marching Orders 2018: Diversify Your Microsoft Revenue

What can Microsoft partners do differently in 2018 to make a business breakthrough? We put that question to 16 top experts, including Matt Scherocman, President, Interlink Cloud Advisors. For more tips on finding success in the Microsoft channel in 2018, read our full Marching Orders feature here.

As clients move more of their revenue to the cloud, Microsoft partners need to diversify their revenue streams to continue to flourish and, possibly, just to survive.

My recommendation for 2018 is to diversify your revenue and protect your margins. We are all seeing pressures on revenue and profitability. To me it feels like this is occurring in every industry as the Internet makes geography less of a business advantage. Customers are finding self-service and research easier than ever. Among the pressures:

• Traditional hardware and software sales are going away. So, the opportunities to make big margins on large product transactions is also disappearing.
• Managed services revenue is declining because there are fewer servers to manage on-premises. The reliability of cloud services sets a ceiling on what can be charged.
• Partner of Record fees continue to be changed and reduced by Microsoft. We have seen major cuts in what Microsoft calls the "rate card" again this year, and adviser fees from Web transactions were completely eliminated.

In 2018, look to make investments in new offerings. Technologies like collaboration adoption services, business intelligence, data warehousing and machine learning are just a few that are ripe with customer needs. The biggest challenge to the traditional systems integrator is recruiting talented folks who can lead these new practice areas and evolving the sales teams to be able to clearly articulate these value areas.

Matt Scherocman is president of Interlink Cloud Advisors, a born-in-the-cloud Microsoft partner based in Cincinnati, Ohio.

Posted by Matt Scherocman on February 15, 2018 at 8:37 AM