Microsoft CEO Satya Nadella, who’s been absorbed in the technology giant’s “partner-first” culture for nearly 30 years, spends a lot of time contemplating how solution providers are impacted by every decision the company makes.
“One of the things that I want to design in our core is -- whether it’s the move from license to consumption or license to subscriptions -- what is the partner opportunity,” Nadella said in an exclusive interview with CRN. “We want to [know] from day one in any change we make -- whether it’s a program change or business model change -- what does it mean for partners?”
Nadella’s vision for Microsoft is filtered through a channel lens.
“I’ve grown up in Microsoft since ’92, in some sense marking all of our programs and events as a platform and partner-first company,” Nadella said. “That’s the ethos that I live and breathe.”
Nadella’s strategy to keep partners at the center of all things Microsoft is a message that he has constantly reinforced since replacing Steve Ballmer as Microsoft’s third CEO in 2014. And it’s helped him engineer a remarkable turnaround of the 46-year-old company’s business model and fortunes as a hybrid cloud computing force with its Azure platform.
And now Nadella is poised to drive further Microsoft cloud gains as the company urges partners to sell its full technology stack with the goal of longer customer engagements and more consumption. Microsoft wants partners to transform from pure resellers focused on a single product to trusted advisers delivering managed services and creating innovative solutions atop multiple offerings from Microsoft’s increasingly intertwined portfolio.
With some 300,000 partners globally having a hand in 95 percent of Microsoft’s commercial revenue, the Redmond, Wash.-based company’s success hinges on the channel, according to Nadella.
“What I think is unique about the way we approach our business, our business model and the partner ecosystem is we fundamentally wouldn’t exist as a company if not for the partner ecosystem taking what we build, adding value to it and then, most importantly, jointly being as obsessed about how do the outcomes of it help the world get better one business at a time, one community at a time,” Nadella said.
Helping Nadella carry out his partner-led worldview is Rodney Clark, the 23-year Microsoft veteran who was named channel chief and corporate vice president of global channel sales at the end of March.
“The key message from Satya is consistent not only with [me], but with others, and that is … partners are critical to our success—always have been and will continue to be—and we need to continue to invest in their tech capability and enable them to leverage our platform,” Clark said. “And we have to find ways to make it easier and simpler to engage and to transact.”
When Nadella meets with his senior leadership team each Friday, the conversation—no matter what part of the business is being discussed—always comes around to how the company can help partners drive tech acceleration and customer outcomes.
“The biggest thing in those meetings is ultimately how we integrate the partner conversation and discussion into everything that we do,” said Clark, who previously served as Microsoft’s corporate vice president of IoT and mixed reality sales. “What Satya is consistent about—in fact, emphatic about—is ensuring that when we talk about our capability, we’re also talking about how we are enabling that same capability in the ecosystem. You can hear him going through that type of assessment: How are we going to enable this community, this ecosystem to support our broader customers and ultimately help with larger goals and, more specifically, company-specific or country-specific [goals]. That’s kind of his hierarchy.”
The cloud shift
Microsoft’s shift to a more open and collaborative cloud-first strategy under Nadella— backstopped by key sales organization and compensation changes—has fueled customer consumption of Microsoft’s Azure cloud computing services and its cloud-based Microsoft 365 productivity and Dynamics 365 business application lines.
Nadella’s critical moves have resulted in No. 2 Azure narrowing the market-share lead held by Amazon Web Services (AWS). They’ve also been life-changing for Microsoft partners such as Dynamic Consulting, a Chicago-based Microsoft Gold partner specializing in implementations and management of Microsoft’s Dynamics 365, Power Platform and Modern Workplace solutions.
“What he’s done for Microsoft, not just with his vision, but also his ability to execute … he’s been absolutely amazing,” President Jonathan Stypula said. “I first became a Microsoft partner under Ballmer, but it’s the direction Satya has taken Microsoft that has had a lasting impact. He and his team have changed our company trajectory—changed my life, really. Those early and bold decisions made the company what it is today.”
Nadella has transformed the Microsoft channel with his cloud-first model, driving massive growth and profitability for partners.
“I would do anything for Satya,” Stypula said.
The next channel revolution is centered on driving more cloud consumption with partners leveraging the full depth and breadth of the complete Microsoft portfolio.
“The market has spoken on that one,” Clark said. “The companies that have been successful in this transition have made that commitment to their digital transformation, they’ve made that commitment to their business transformation. And I think it’s critical to the success of our ecosystem for others in the ecosystem to really understand.”
Approximately 30 percent of the Microsoft partner ecosystem has crossed the cloud chasm. They’ve transformed their businesses with Microsoft, or the principals of longtime Microsoft partners went on and started new cloud-first companies, according to Corporate Vice President Gavriella Schuster, a 25-year-plus Microsoft veteran.
“They’re leading-edge,” said Schuster, who passed the channel chief baton to Clark after five years in the role. “Probably a third of them have managed services, have value-added services, have unique [intellectual property] and repeatable services and are really in the process of embracing that consumption economy. About a third of them through that journey are … reshaping their business models. They are delivering the value to the customers. They’re working with us as value-added services [partners] and not just resale, but they’re still in the process of transitioning their compensation systems, their teams, to be more like customer success managers rather than just salespeople.”
Microsoft is trying to develop its partner channel to do more as it simplifies the implementation of its cloud-based offerings.
“Microsoft is moving our workloads around,” Stypula said. “The partner that was really good at setting up SQL Server five or 10 years ago probably doesn’t have a job anymore. Microsoft says that’s low-hanging fruit. They want the partner to go up and become a higher-level consultant—when should a customer be using SQL, what kind of SQL versions should they be using—not just the plumber or not just the mechanic.”
A ‘partner-first’ company
Nadella brought an engineering and computer science pedigree to the CEO’s office after leading the company’s cloud and enterprise group as executive vice president. “I remember the first TechEd or the first Worldwide Partner Conference, and I marked all my life with the passing of those events,” he said.
His turnaround of Microsoft has shifted its focus from on-premises software and dependence on its Windows operating system and Office franchise to being an end-to-end platform and tools provider with a hybrid operating model trained on the intelligent cloud and edge, infused with artificial intelligence (AI). The previously insular Microsoft started looking outward, collaborating with former adversaries including Apple, Oracle, Red Hat, Salesforce, SAP and Sony.
“This is really a completely different thinking—almost a borderless thinking,” said C Vijayakumar, CEO of HCL Technologies, a Noida, India-based Microsoft global systems integrator that eclipsed US$10 billion in revenue in 2020. “It’s a very competitive world, but how do you collaborate to drive more value for a client—I think that approach has been very strong. I think everybody is looking at how to do it, but Microsoft took a lead on how to make different technologies work on their platform.”
Nadella has been instrumental in unlocking the power of Microsoft across cloud, software and consumer technology by betting tech is not a “zero-sum game,” said Hyoun Park, CEO and principal analyst at Amalgam Insights, a Berkeley, Calif., technology consulting firm.
“Although Microsoft definitely wants to win business, they don’t have a ‘win-at-all-costs’ mentality that is more associated with the likes of Oracle or Amazon,” Park said. “Microsoft is more likely to invest in areas where a rising tide floats all boats, and Microsoft can focus on executing on its own vision.”
Microsoft has embraced open source under Nadella, including the Linux operating system once described in 2001 as a “cancer” by Ballmer. Microsoft joined the Linux Foundation in 2016 as a Platinum member and in 2018 acquired GitHub, the open-source code repository service, for US$7.5 billion in Microsoft stock to win over developers.
Today, in addition to Azure, Microsoft 365 and Dynamics 365’s enterprise resource planning and customer relationship management applications, Microsoft’s catalog spans Power Platform and its low-code Power Apps development suite, the LinkedIn professional networking site, Surface computers and tablets, and Xbox gaming consoles and games among other products.
Microsoft gives partners a broad set of capabilities that’s very different from its competitors, said Emma McGuigan, who leads Intelligent Platform Services and the Microsoft Business Group at Accenture—a global systems integrator and Microsoft’s largest partner—and is board chair of Avanade, a joint venture with Microsoft.
“Where we’ve seen real strength in our relationship with Microsoft is we’ve implemented that breadth of technology platform solutions that they have,” McGuigan said. “What that’s allowed us to do in these target industries is to really build on some of the core solutions and then start to drive some of the more innovative thinking. It’s about really unlocking that breadth of opportunity that comes between our organizations.”
Other key moves to Microsoft becoming a major cloud player came in 2017 with a global sales reorganization—then called the most significant change to its sales force in company history— and a defining sales motion decision that shifted compensation away from one-time license bookings to consumption-based pay dictated by customers’ actual use of Azure.
“If we thought we had a fantastic business model and a fantastic opportunity with our ecosystem of partners in the old era of … software licenses, we have now proven that this move to consumption and subscription is a tremendously more valuable thing to our customers and tremendously bigger opportunity for us collectively,” Nadella said. “I feel like this business model is here to stay. After all, a customer is not going to subscribe if they’re not getting value. A customer is not going to consume if they’re not getting value. It puts us, our partners, fully aligned with customer success. I celebrate this sort of alignment, and we will continue to keep tuning it.”
Microsoft also launched a co-selling program in 2017 under which partners, to date, have made US$18.5 billion directly from co-selling their intellectual property (IP) with Microsoft. In the current fiscal year, Microsoft’s sales organization has shared and closed more than 166,000 co-sell opportunities with partners. It’s increasing its co-selling focus on small and midsize businesses this year.
Nadella and Microsoft live by the principle that “great partners make more possible for one another and for clients,” according to Brian Humphries, CEO of Teaneck, N.J.-based Cognizant, a Microsoft global systems integrator and Azure Expert MSP that generated US$16.7 billion in revenue last year.
“Microsoft is a tremendous partner,” said Humphries, whose company purchased Microsoft partners New Signature and 10th Magnitude last year. “By staying in lockstep at the executive level on down, investing in digital platforms based on Microsoft industry clouds and developing joint go-to-market solutions, we’re able to accelerate our clients’ transformation into fully digital businesses and deliver compelling outcomes for them.”
The changes under Nadella have paid off for Microsoft, partners and investors. Microsoft’s annual revenue has increased almost 84 percent under Nadella, from US$77.8 billion in fiscal year 2013 to just over US$143 billion in the last fiscal year that ended June 30, 2020.
Microsoft partners earned an estimated US$9.58 in revenue through services and software for every US$1 that Microsoft generated in 2020—a total of US$984 billion, according to IDC. The market research firm expects that to grow to US$10.04 by 2024, representing a total of US$1.2 trillion. By comparison, IDC estimated that Google Cloud partners earned US$5.32 for each US$1 of Google Cloud technology sold last year. Similar stats were unavailable from IDC for AWS.
Microsoft’s stock, meanwhile, has climbed approximately 540 percent during Nadella’s tenure as CEO. Microsoft hit a US$1 trillion market capitalization for the first time in April 2019, and its market cap now stands at more than US$1.75 trillion, making it the world’s third most valuable company behind Apple and oil company Saudi Aramco.
On-premises ubiquity a key strength
The tech industry saw the “dawn of a second wave of digital transformation sweeping every company and every industry” in the past year, according to Nadella, accelerated by the global coronavirus pandemic that’s fueled Azure cloud migrations and consumption, the growth of Microsoft 365 and the Teams collaboration app, new devices running Windows 10 on increased PC use, and Xbox gaming hardware, content and services.
Microsoft’s revenue hit US$43.1 billion for the fiscal second quarter ended Dec. 31, 2020, the most recent results available. The 17 percent increase from the prior year was driven by commercial cloud revenue—including Azure, Office 365 Commercial, Dynamics 365 and the commercial portion of LinkedIn—which grew 34 percent to US$16.7 billion. Revenue from Azure alone was up 50 percent.
With enterprise-class relationships dating back several decades, Wedbush Securities said Microsoft’s deal flow looks strong heading into the rest of the year. It estimates Microsoft has penetrated only about 35 percent of its massive, “unparalleled” on-premises installed customer base on the cloud transition.
That Microsoft on-premises ubiquity is a key strength when it comes to selling its cloud services, according to Bob Bailkoski, CEO of Logicalis Group, an England-based Microsoft Azure Expert MSP with an approximately US$100 million Microsoft practice. With triple-digit growth rates in annual recurring revenue generated through its customers—consumed revenue on the Azure platform—the company expects to double the size of its Microsoft business in a few years.
“And that’s really going to be driven by growth in cloud managed services,” Bailkoski said. “The fact it’s across all of our customer environments—Microsoft as a vendor—that gives you the lead-in to Azure. From a selling perspective, the conversation is much, much easier.”
Microsoft’s cloud approach is providing customers the broadest choice possible, said JG Chirapurath, Microsoft’s vice president of Azure data, AI and edge.
“The Microsoft cloud is really the foundation and instantiation of our promises of the intelligent cloud and intelligent edge,” Chirapurath said. “If you look at things like [Microsoft] 365, we effectively provide the most cohesive and unified platform for people to collaborate and interact with each other. We provide business users, in Dynamics 365, with a broad set of intelligent applications that allow customers to basically lead with every process that they deal with in their business on a day-to-day basis. And then Azure is really a cloud where practitioners, developers, data scientists, IT professionals … come to basically get their tasks done and help their customers, help their own employers with the digital transformation journey.”
Microsoft’s three-cloud offering—Azure, Microsoft 365 and Dynamics 365—is unique, according to HCL’s Vijayakumar.
“It really gives you an ability to play end to end in the digital transformation of an enterprise,” he said. “It’s a very comprehensive offering.”
Microsoft’s seven-year-old Cloud Solution Provider (CSP) program is one of its fastest growing, moving from 45,000 partners in early 2018 to more than 90,000 partners generating 60 percent of Microsoft partner transactions, according to the company. Average revenue per CSP is growing 53 percent year over year.
“When we talk about the partners that have transformed, that 90,000 really represents that two-thirds of the population that we feel have turned that corner, and their primary focus is cloud business,” Schuster said.
Microsoft Azure: ‘scope matters’
Microsoft Azure has continued to gain market clout: Its worldwide market share increased to 20 percent at the end of 2020, from 10 percent at the beginning of 2017, according to the latest quarterly cloud infrastructure data from Synergy Research Group. AWS’ market share has remained in the 32 percent to 34 percent range.
Nadella cited multiple reasons why he believes Azure—which is used by about 95 percent of Fortune 500 companies—is the better choice for customers and partners over AWS and No. 3 Google Cloud Platform (GCP).
“When we think about Azure or for that matter, any layer of our commercial cloud, it’s that scope,” Nadella said. “We have differentiation in Azure. Hybrid is something that we have always led. We have the most differentiated data layer. We have the most differentiated AI layer as it meets tools. We have the most differentiated tool chain, especially with Azure DevOps and GitHub. But the most important thing for us is that line between Azure to GitHub to Power Platform to Microsoft 365 or Dynamics 365 is one integrated commercial cloud opportunity for partners.
“When you are going to a partner or when you’re going to a customer, you don’t want to talk about infrastructure independent of data, you don’t want to talk about data independent of the SaaS applications, because customers care about all of these things together in the context of their business process, business value,” Nadella said. “That’s the unique opportunity: That we are more comprehensive in scope, scale, depth, which then, in turn, translates into partner opportunity and customer value.”
Trust is another factor that Nadella said shouldn’t be “taken lightly in today’s age.” It’s more than trust in technology and security, he said, in an apparent reference to cloud competitors whose broader businesses sometimes compete with customers— such as AWS parent company Amazon.com’s e-commerce site.
“The idea that the partner and the platform provider in Microsoft fundamentally are aligned with the customers’ business success matters a lot,” Nadella said. “You talk to a retailer, you talk to a packaged goods, direct-to-consumer company, you talk to an automaker—talk to anyone—they’ll always care about, ‘Look, can I trust my vendor chain to be mostly motivated by my success?’ And that, I think, is another element of differentiation.”
Microsoft Azure has a strong off-the-shelf, Platform-as-a-Service (PaaS) offering, said Chris Garvey, executive vice president of cloud services at Seattle’s 2nd Watch, a cloud migration and managed cloud service provider and Microsoft Gold partner.
“They do quite well with application modernization PaaS services … such as IoT and data analytics,” Garvey said. “Their data lake and ancillary services that support the aggregation of information for advanced analysis are well-integrated with their other business software offerings.”
Atmosera, a US-based Microsoft Gold partner and Azure Expert MSP, is 100 percent focused on Azure, with 70 percent annualized growth in the last five years.
“Azure has more [cloud] regions—60, compared to Amazon’s 25, with more preparing to come online,” CEO Jon Thomsen said. “This allows for better service and more options for our customers. There is also Azure Government, which is specifically hardened and dedicated for government entity use.”
Thomsen ticked off a list of other Azure strengths, including costs, innovation and integration capabilities: Running Windows and SQL Server workloads can be five times more expensive on AWS; Azure has delivered more than 1,000 new capabilities in the last year, including support for quantum computing; and Azure Active Directory-based identity security integrates seamlessly with Office 365 and third-party identity systems, he said.
Thomsen also singled out Azure’s interoperability.
“The solutions and services provided by Microsoft can be connected with multiple clouds and on-premises, reducing the feeling of ‘vendor lock-in,’” he said. “In addition, GitHub and Azure DevOps both support deployments of code to Amazon, GCP, Azure and on-premises.”
The company does not believe cloud is “one size fits all,” Microsoft’s Chirapurath said.
“Now, more than ever, customers need more choice, more flexibility in how they approach the cloud,” he said. “We’ve always wanted to meet our customers and partners where they are. We want to reflect the choice that customers have in their own IT infrastructure and IT choices. We want to be able to tell a customer if they choose Oracle to run their database applications, that’s perfectly fine. We will absolutely work with Oracle to make sure that their database choices in Azure related to Oracle are the best in the world—same with SAP.”
Microsoft’s hybrid cloud offerings center on the Azure Stack family of services, Azure Arc and IoT capabilities.
“Microsoft built Azure to be hybrid from day one, so we didn’t sort of back into it,” Chirapurath said. “Hybrid is ultimately an operating model. We believe that we have the most comprehensive approach to this whole hybrid proposition.”
Microsoft launched Azure Government, a cloud for U.S. government customers, in 2014. Now it’s expanded into industry-specific clouds, announcing five since October. They combine common data models, cross-cloud connectors, workflows, APIs and industry-specific components and standards with security solutions and cloud capabilities from Azure, Microsoft 365, Power Platform and Dynamics 365.
The first, Microsoft Cloud for Healthcare, will be updated this month with new features for virtual health, remote patient monitoring, care coordination and patient self-service, and support for eight new languages. Microsoft Cloud for Retail, unveiled at the National Retail Federation’s flagship conference in January, moved to public preview in March. It’s designed to deliver more personalized shopper experiences and consolidate customer data insight to help employees improve operations, sales and customer service.
Microsoft Cloud for Financial Services is in public preview, and Microsoft Cloud for Manufacturing and Microsoft Cloud for Nonprofit are set for public preview in June.
“We believe that digital transformation has extraordinary gains to offer in any industry,” Chirapurath said. “We want to essentially create these offerings that help participants in a particular industry hit the [ground] running. You can expect us to continue to invest in these industry-specific clouds across these verticals as a next evolution of how we see our cloud journey come around.”
Microsoft’s industry cloud strategy plays to its existing strengths, Accenture’s McGuigan said.
“Microsoft has chosen to really double down on the industries where they’ve already been commanding a lot of opportunity,” she said. “Pulling an industry cloud solution together is a very natural next step for them.”
Accenture was part of the beta run for Microsoft Cloud for Healthcare and is leveraging its infrastructure to power Accenture’s Healthcare on Azure data platform. Accenture built applications and capabilities related to virtual health and patient insight on top of Microsoft Cloud for Healthcare to extend its capabilities.
“We provide expertise that feeds into those health solutions, so it’s like an extra layer on top that allows us to accelerate the pace at which we can implement solutions,” McGuigan said.
Nadella on emerging partner growth areas
The coronavirus outbreak resulted in great momentum around digital transformation for the smallest of businesses to the largest of institutions, Nadella noted.
“Whether it was remote work, remote education, remote health—take anything—it suddenly became important that, in order for any business or any institution to stay operating, you needed digital technology,” he said. “And I think that there’s no going back. A lot of things have accelerated.”
A newer form of hybrid computing is among the emerging technologies that Nadella sees as future growth areas for Microsoft partners. It’s a complete, new space, he said.
“Just the other day, I was looking at all of the deployments of 5G, Azure edge and the cloud,” Nadella said. “Every place, whether it’s the Starbucks coffee machines or whether it is the Purell hand sanitizer … you put MCUs [microcontroller units] in them, you connect them, you connect it to 5G, and you suddenly have a very different type of hybrid computing. It’s not the hybrid as a transition phase from old to the cloud. There is a complete birth of cloud- and edge-class applications that partners are deploying in many, many interesting places.”
Low-code, no-code development promises tremendous partner opportunities, Nadella said, including by continuing to extend Teams with business process applications. He also cited innovation in the data and AI space around the Azure Synapse analytics service and Azure Cosmos DB, Microsoft’s fully managed NoSQL database for modern app development.
“This is every layer of the stack,” Nadella said. “Whether it’s the infrastructure with hybrid, with data with its next generation of large-scale data warehouses with Synapse or operational stores with things like Cosmos DB and Hyperscale SQL—or what’s happening with Power Apps, what’s happening with Azure DevOps and GitHub or Teams—[it] shows a very fresh modern stack with plenty of partner opportunity.
“One of the things that we also see is that connective tissue—it’s not one layer at a time,” Nadella continued. “You could start in Teams, deploy Teams, write a Power Apps, and the Power Apps is using Azure DB. You’re a partner of all of those technologies. But, more importantly, you are a partner who is driving faster time to value for customers.”
Microsoft Teams: partners need to ‘ride the wave’
Microsoft’s approach to Teams is to offer in one place all of the communication and collaboration tools that people need to get work done inside and outside their organizations. These tools include calls, meetings, chat, document collaboration, project management and a number of other features.
Launched in 2017, Teams already had been one of the fastest-growing Microsoft products ever created even before the COVID-19 pandemic. But the outbreak-induced move to remote work and learning catalyzed organizations to transition more quickly to the cloud and modern collaboration tools, and Teams benefited, said Jeff Teper, corporate vice president of Microsoft 365 collaboration. There are now more than 115 million daily active Teams users—up from 32 million on March 12, 2020, the day after the World Health Organization officially declared the global pandemic—including nearly 60 million on mobile devices. More than a half-million organizations use Teams.
At the start of the pandemic last year, Accenture and Avanade used Teams to quickly provide enhanced communication and collaboration capabilities to the National Health Service (NHS), the United Kingdom’s publicly funded health-care system. The companies worked with NHS Digital to build and test a Teams integration within a week. They rolled it out to 1.2 million employees at 16,000 NHS organizations in England who use NHSmail, the NHS’ email service, enabling them to securely send instant messages, complete audio and video calls, and host virtual meetings. Avanade worked with the NHS to stand up virtual clinics using Teams.
“Teams is built both as this user experience scaffolding and a platform from day one to bring multiple things together—both asynchronous and synchronous communications, that is, video meetings … and chat together as one communications infrastructure,” Nadella said. “We bring together collaboration with Office collaboration as part of the same application. It’s not as if work only happens in meetings or work only happens in chat. Work happens before meetings—because we are collaborating on a document—during meetings and after meetings. We really thought of that in the context of Teams.”
Microsoft also thought about business processes, Nadella said. A customer or partner can build an inventory tracker using Power Apps or integrate with Workday, for example, take that workflow and put it right into Teams, so that people on the frontlines or knowledge work side of businesses can collaborate, he said.
Nadella isn’t worried about Teams becoming less relevant once organizations return to some semblance of in-office work and in-person learning. “When we ‘come back’ from the pandemic, hybrid work is here to stay—whether it’s somebody in the field working with somebody in the headquarters, or somebody at work working with a bunch of people who are remote or working from home,” he said. “The flexibility that is built into Teams and all the modalities of communications, collaboration as well as business process that are built into Teams … are going to be of paramount importance. It’s a real platform opportunity for partners.”
Microsoft has a “fantastic” road map for Teams with enhancements on the end-user feature, security and IT, and developer sides, according to Nadella.
“That’s why it’s exciting whenever we think about Teams,” he said. “It’s like talking about Windows or really talking about Azure. Teams is as much of a platform opportunity as it is an end-user tool.”
Recently unveiled Teams features include PowerPoint Live, a presenter mode to customize how presenters’ video feeds and content appear, invite-only meeting controls, end-to-end encryption for one-to-one Teams calls, and Microsoft Teams Connect to help organizations collaborate with outside parties through shared channels.
Microsoft Viva, a new employee experience platform, will be integrated into Teams. And Microsoft plans to integrate Microsoft Mesh, its new Azure-powered, mixed-reality platform that will allow people to interact holographically.
“There’s no better way for partners to make money right now than to help organizations retool their real estate, their employees and their applications for the hybrid workplace,” Microsoft’s Teper said. “If I was talking to the CEO of any one of our partners, I would say, ‘Ride the wave.’ I don’t think there’s a product in tech that creates as many opportunities as we’re going to create with Teams over the next five years.”
The partner opportunities start with deploying Teams as organizations prepare their post-pandemic workspaces.
“Conference rooms and shared workspaces were already in a state of transformation, but they’re going to be evolved for hybrid work,” Teper said. “Employees may not go to the office all the time, but they’ll collaborate in touchdown spaces. Conference rooms will not just be the place where one or two people call in remotely, but you’ll have large-screen videos of people and tracking of status on Teams meeting room devices that will make those meetings more inclusive for remote participants.”
Partners will continue to see work transforming and integrating business applications into Teams and custom-building new ones. ISVs already have built more than 800 Teams apps, and systems integrators and other Microsoft partners have contributed tens of thousands more—if not hundreds of thousands—building and integrating them via Power Apps, SharePoint or Visual Studio, Teper said.
In January, German enterprise application software provider SAP unveiled plans to integrate its solutions into Teams, including SAP S/4HANA, SAP SuccessFactors and SAP Customer Experience.
“And then we see lots of partners working with companies to help them engage their employees,” Teper said. “It’s top of mind for every CEO about how to transform, evolve their workplace, their skill set.” Microsoft Viva presents a “huge set of partner opportunities, thinking through what content and training and applications should be targeted to what employees,” Teper said.
‘Trillions of dollars’ in partner opportunities at stake
Those Microsoft partners, more than half of which are MSPs, are in countries across the globe.
“One of the things that I feel the most-proud of as a company is when you go drop yourself anywhere on the planet, there will be a Microsoft partner ecosystem,” Nadella said. “And for the most part, if you say what is the software industry of that country or that region, it’s essentially these partners. In 2021, that is more needed—that is, that ecosystem building, that ability to take digital technologies and democratize their access across industries, across first-line and knowledge work.”
There are “trillions of dollars” more in opportunities at stake, Nadella said.
“Today, 5 percent of the world’s [gross domestic product] is spent on tech,” he said. “In 10 years’ time—in fact, this COVID crisis may have accelerated it—that’s going to be 10 percent. We are lucky enough to be in an industry that’s going to double, and the partner opportunity therefore is clear.”