More than 7500 new partners are joining the Microsoft ecosystem on a monthly basis, driven by increased co-selling through the channel.
Revealed during an exclusive State of the Channel press briefing, such advancements are backed by indirect selling and marketplace growth, alongside increased revenue generated through cloud and managed services.
Specifically, partner revenue through IP co-selling now totals more than US$8 billion globally, 18 months since launch.
“That’s not Microsoft revenue, that’s partner sales,” said Gavriella Schuster, corporate vice president of One Commercial Partner (OCP) at Microsoft. “That is the global impact that we drive together through partnership.”
The program - which offers internal rewards for selling third-party solutions - was rolled out in July 2017, with enterprise reps now being paid 10% of the partner’s annualized customer contract value.
Spanning six months during the vendor’s current fiscal year, 9,000 wins have already been recorded, with 78,000 joint deals in the pipeline.
Such figures dwarf numbers generated during the first 12 months of the program, in which more than 11,000 co-sell wins created roughly US$5 billion in contract value through the channel.
“We’re focused just as much on selling third-party solutions, as our own,” Schuster added. “When partners and customers make more money around us, that’s when we see the greatest growth and success across the board.
“All of this growth is a testament to our work with partners in delivering the technology solutions and services to customers.”
According to Schuster, co-sell deals close nearly three times faster, projects are nearly six times larger, and drive six times more Azure consumption.
From an initial investment of US$250 million, the co-sell offering spans the entire ecosystem of partners, ranging from value-added resellers, managed service providers (MSPs) and system integrators, in addition to independent software vendors (ISVs) and start-ups - “large and small”.
“This incentive lays the foundations to focus on both first and third-party solutions,” Schuster added. “No-one else in the industry is incentivizing their own sellers like this, which is a one-to-one-to-one approach. One partner, one field seller and one customer at a time.”
Schuster said co-sell momentum is being largely driven through security and storage focused ISVs, such as Veeam, Check Point and Rubrik.
Furthermore, cross-industry line of business applications are also driving growth, delivered through Azure-based solutions from Adobe and Sitecore, for example.
“SoftwareOne is also a great example of an evolving Microsoft partnership,” Schuster said. “They went through a deep digital transformation and are now a top 10 IP co-sell partner for Microsoft globally.”
Leveraging more than 20 years of partnership with Redmond, SoftwareOne’s heritage centers around licensing and asset software license management.
The technology provider has since overhauled internal operations and focus, expanding to more than 70 countries through the creation of a US$8 billion services business.
“They realised they needed to transform to continue to deliver value to customers,” Schuster added. “And this is what OCP is all about, which was built to create pathways for success through partnership.”
For Schuster, the OCP roll-out highlights a “modernizing approach” from Microsoft within the channel, transitioning away from historical partnering in the process.
“We used to have basic transactional partnerships,” Schuster explained. “Microsoft made something, partners sold it and serviced Microsoft’s products and technologies. That was what we done, basic partnering.
“We’ve moved from partnering to partnership, in which partners build on top of Microsoft, creating new revenue opportunities that weren’t possible before.
“Through our unified partner and sales organization, we’ve been listening and learning from our partners. We’ve identified gaps and opportunities to improve how we invest in the partner success.”
Alongside co-sell growth, partners transacting via the vendor’s Cloud Solution Provider (CSP) program increased 31% during the past year.
Delving deeper, partners transacting via CSP now serve more than two million customers globally, representing a surge of 52% within the space of 12 months.
“Our partner ecosystem is strong and continues to grow, with CSP now our fastest growing licensing model,” Schuster confirmed. “Through CSP, partners are embedding Microsoft technologies into their own solutions and are delivering more differentiated long-term value to their customers.”