Gartner Blog Network


Doing Business with Microsoft – Inspire part 3

by Stephen White  |  July 18, 2018  |  Comments Off on Doing Business with Microsoft – Inspire part 3

The Microsoft keynote (actually they are calling them ‘Corenotes’) session on Tuesday was without major announcement. The most significant business announcement from Microsoft wasn’t part of the session, however Microsoft did confirm an Azure win with Walmart, whilst significant, it’s of little surprise that Walmart chose not to work with a key competitor.

This retail win aligns to one of Microsoft’s priority verticals. At Inspire 2017 Microsoft announced it would prioritize developing solutions for six key verticals, where the alignment of additional technical resources would enable solutions aligned to vertical domains. On Tuesday the set of priority verticals was expanded to eight for the coming year, adding Media and Automotive to the existing commercial verticals of Financial Services, Manufacturing and Retail, whilst public sector verticals remain classed as Government, Education and Health. Whilst Microsoft are positioned to leverage a ‘we won’t compete with you’ play in Retail, a similar tone was struck reference the automotive industry on Monday reference producing a self driving car.

iStock_000002096856_Medium

Whilst not an announcement of change, one of the statements made during the Tuesday keynote was that 17 million sellers exist in the Microsoft partner channel. Whilst this is said to represent the overall size of the partner channel, it doesn’t mean that 17 million sales reps are set to cold call you next week! The Microsoft partner channel is comprised of varying types of organizations, including;

  • LSPs – software and cloud services resellers, that also deliver professional services, of whom there is only circa 500 organizations globally, yet are responsible for a vast value of Microsoft revenue
  • Domain specialist SIs, or services and solution providers, who exist in vast quantities, and are often small businesses. These partners enable deployment/provisioning, customization, integration and management of domain specific services, and more recently also selling Microsoft cloud services utilizing the Cloud Solution Provider (CSP) model
  • Breadth SIs, and Outsourcers, who act across a broader context than their domain specialist counterparts. In a number of cases these organizations are also LSPs, however most often focus on services.
  • Managed Service Providers and Hosters, who now offer not only their own hosted services but also resell and support Microsoft cloud services using CSP
  • Telecommunciations partners, previously utilizing syndicated models to license Microsoft software (cloud services), but also now utilize  CSP
  • ISVs of varying size who develop a vast array of applications and are core to growth of Azure, selling their own licensing directly and consuming Azure or using Azure Marketplaces
  • OEMs whose own products have Microsoft software embedded or utilize Microsoft cloud services

Perhaps none the of the above is news to you? The purpose of laying this out is twofold.

Firstly, to demonstrate that the Microsoft partner landscape is indeed vast but represented not just by front end or specialist sales but also extensive technical and operational resources. There will indeed be many a sales rep looking to reach you, but those are likely somewhat short of the full headcount. As Microsoft partners continue to grow services capability, the proportion of headcount carrying a sales target will continue to shrink and represent a lesser percentage of the total partner channel talent pool.

Secondly, and perhaps most significantly, beyond the keynote, in another session on Tuesday, Microsoft announced Modern Commerce. That being Microsoft’s approach to digitally enabling execution of it’s own and partner solutions through a single platform, including the capability to execute negotiated multi-year deals for the enterprise (not just acquiring from a list price). Whilst there isn’t any significant press associated with the announcement as yet, this represents a major operational milestone for Microsoft, having operated across multiple agreement structures running on multiple backbones for many years.

Progressive convergence was emphasized, however the acquisition motion should be anticipated to evolve through the coming 12 months.

Expect to hear more about Modern Commerce from Microsoft (perhaps tomorrow).

Additional Resources

Winning in the Turns: A CIO Action Guide

Turns can be economic, geopolitical, environmental social or competitive, to name a few. Winning in the turns demands contrary measures around cost, strategy and talent.

Read Free Gartner Research

Category: cloud  it-cost-optimization  licensing  reseller  

Tags: azure  cloud  licenisng  lsp  microsoft  saas  software  

Stephen White
Research Director
4 years at Gartner
16 years IT Industry

Stephen White is a Research Director in Gartner's IT Asset Management, Vendor Management and Procurement team, focusing on strategic licensing and negotiation strategies, asset management, and reseller engagement. Mr. White leverages his experience in software sales and consulting to assist IT leaders through his coverage of best practices in license life cycle strategy and trends, license metric and pricing practices, contract negotiations, optimizing terms and conditions, sourcing, and relationship management. Read Full Bio




Comments are closed

Comments or opinions expressed on this blog are those of the individual contributors only, and do not necessarily represent the views of Gartner, Inc. or its management. Readers may copy and redistribute blog postings on other blogs, or otherwise for private, non-commercial or journalistic purposes, with attribution to Gartner. This content may not be used for any other purposes in any other formats or media. The content on this blog is provided on an "as-is" basis. Gartner shall not be liable for any damages whatsoever arising out of the content or use of this blog.