CRN USA sat down with Microsoft corporate vice president of worldwide channels and programs about the impact digital transformation is having on Microsoft channel partner margins, the untapped Microsoft Azure opportunity, and how Microsoft outshines Amazon Web Services as a cloud partner for solution providers.
What's the primary thing you're focused on right now as far as Microsoft channel partners and what you're trying to get them to do?
The big thing is moving to this next level of transformation. The next level of transformation is helping customers with their digital transformation, so it's going well beyond just 'what is a cloud service' and how do you actually think about the industry that a customer is in and the challenges that they're facing and the way that technology can help them.
Partners have to ask customers different kinds of questions?
Partners have to ask different kinds of questions. Really, they have to hire different kinds of [sales] people in a lot of cases. If you realise, 'Hey, my business actually is a lot of accounting. I spend a lot of time selling to accounting companies,' maybe you should hire an accountant because it's hard to think like a customer if you don't actually have the skills [to understand] what that customer is. If what you're delivering is professional services to lawyers, you should spend some time with lawyers or hire a lawyer.
It's about having them think about the fact that we want them to go from being generalists to specialists to having a specialty because I think that that's really important in the competitive environment that we're in, in the way that the technology has evolved. It's not about just reselling services; it's about actually building unique value-added services, and it takes more resources to build a value-added service, so you can't do everything. You have to figure out where your specialty is.
Should that always be a vertical specialty?
It's not always a vertical, so lots of horizontal specialties, too, but it's about picking something that is unique and differentiating and building your services capability. Your capability, it could be about managed services, it could just be about a specialty in understanding the customer and being able to create repeatable offerings for that specific kind of customer, whether it could be a CMO, it could be a CFO, picking a customer.
I think that the key to success at this moment in the technology revolution is having a unique differentiation and being able to make that repeatable. A lot of our partners have actually made the move into cloud services now. We have over 60,000 partners who are now delivering our cloud services with us, but the next step of that is to make sure it's a specific value proposition that we're offering.
What grade would you give the Microsoft channel on how far along are they in making this transition?
The digital transformation? I think we're just at the beginning of it. Part of our big push has actually been helping our own field understand how to make that shift, how to talk to [business decision-makers], how to think about what we're delivering not as a platform but bringing that platform together with a partner as a set of solutions for the customer.
What are you doing programmatically to help the partners make these transitions?
We are building out best practices and IP and reference architecture for different solutions. We're building solution maps, so we've focused ourselves on seven different industries, and then specific areas of those industries. For instance, in health care we're focusing on pharmaceuticals and life sciences, and then really thinking through and building a map for what the customers need at their various stages of their own digital transformations in this industry and then sharing that with our partners, helping them find and build that area specialisation.
For a long time, we have done a lot of 'sell with partner' partner activity. A lot of what we were focused on is just how do we connect the partner to the customer and get the right partner into the customer. That's a lot of 'sell with' activity. We're at this moment where what we really have to do is also refocus on helping them build. How do you build a new practice, how do you build a new capability, how do you build a new service and a new offering? We're going to re-pivot a lot of our own resources back to helping partners build as well as, obviously, keeping a lot of the trains running on the sell, but really shifting more towards building.
Next: How difficult of a shift is this going to be for channel partners?