Microsoft To Offer 'Channel as a Service'

Buried in Microsoft's slew of Build-related announcements this week was an expansion of the co-sell program that has already incented the Microsoft field to sell billions of dollars worth of partners' solutions.

Begun as a program for Azure ISVs, the Microsoft co-sell program was a way for Microsoft to get its own salesforce selling the partners' cloud infrastructure-based solutions. Under co-sell, the Microsoft field got 10 percent of the total value of the ISV partner solution, paid by Microsoft, for landing a sale.

Microsoft said at the Build show in Redmond on Monday that nearly 3,000 ISVs whose solutions run on Azure have generated more than $5 billion in revenue over the past 12 months with the co-sell program. That figure is roughly in line with previous figures the company has released about the scale of the co-sell program.

Now Microsoft is leveraging its massive channel to expand the program in two ways.

First, Microsoft is expanding co-sell beyond Azure. It will now encompass Microsoft 365, Dynamics 365 and Power Platform. In a statement, Microsoft said the idea is "to create deeper collaboration in selling line-of-business applications." The capabilities are planned for availability at the start of Microsoft's fiscal year on July 1. The roadmap also calls for later expansions to Office 365 and Dynamics 365 add-ins.

Next, Microsoft is expanding sales incentives beyond its own salesforce. Now Microsoft channel partners will be able to resell eligible ISV solutions through the Microsoft Cloud Solution Provider (CSP) program. "For all ISVs, small and large, this effectively offers 'channel as a service' to accelerate customer acquisition through one of the world's largest distribution channels," the statement said. It was not immediately clear if the field sales incentives would be changed for fiscal year 2020 or what those incentives would be for resellers representing other ISVs' solutions through Microsoft's engine.

Helping to power the co-selling opportunities is the introduction of what Microsoft describes as "transactable seat-based SaaS capabilities for AppSource and Azure Marketplace."

The automation and incentives in the expanded co-selling program, especially on the partner-to-partner (P2P) side, represent an important new phase of the Microsoft Partner Network (MPN). With the hundreds of thousands of partners in the MPN worldwide, the ability for those partners to connect through the Microsoft marketplaces they already use with (ideally) little friction could rapidly accelerate P2P revenues.

Posted by Scott Bekker on May 07, 2019