Microsoft: Cloud computing is the new normal

Microsoft continued beating the cloud computing drum on WPC Day 3, saying cloud-oriented partners outperform peers by a number of financial measures.

HOUSTON -- On a mission to hammer home to partners that cloud is the new normal, Microsoft Chief Operating Officer Kevin Turner urged partners attending the Vision Keynote on Day 3 of the Microsoft Worldwide Partner Conference here on Wednesday to lean in and start transacting with Microsoft in the cloud.

“No other company has 22,000 partners worldwide as cloud partners,” said Turner, thanking the early adopters. But clearly the company has a long way to go. “Microsoft wants all of its partners -- meaning the other 630,000 partners -- to also transact in the cloud,” he added.

And, this is the year the vendor wants to see the numbers explode; this is the time to double down on cloud, said Microsoft's channel chief, Jon Roskill.

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What that means is that partners must have an answer for customers who inquire about the cloud. Partners must also be able to stitch together hybrid computing scenarios -- on-premises and cloud-based -- because “that’s where we win,” Roskill said.

The corporate vice president of the worldwide partner group at Microsoft also pointed out that 70% of IT investment will still be on premises in 2016.

Even so, Microsoft cloud-oriented partners outperform their peers in gross profit, revenue per employee, new customer acquisition and growth, according to IDC’s Darren Bibby, vice president of channels and alliances research.

To help partners down the Microsoft cloud computing path, Roskill shared five key insights from a new Microsoft-sponsored IDC report, dubbed "Successful Cloud Partners":

  • Lead with cloud, close with hybrid. Use cloud as a door opener to talk to the customer, especially with new customers who want to have a conversation about the cloud.
  • Get to know the line-of-business leaders: the chief marketing officer, chief sales officer and COO. These executives hold the purse strings on a large portion of the IT budget. Today, 41% of IT budgets come from line-of-business functions, according to Roskill.
  • Optimize your team for cloud. Cloud-oriented partners get higher returns per employee because they optimize, or restructure, their team for the cloud. This can be done by reworking a partner’s existing on-premises engagement model. In the end, companies that optimize their teams for cloud do so with fewer technical experts for more business with more customers. These companies are also able to offer customers fixed fees for project delivery. There is opportunity cost in retraining, but partners realized more value and more revenue per employee.
  • Partners must scale their business with their own intellectual property. Roskill referred to this insight as perhaps the most impactful in the IDC study. This is the value-add that partners will bring to the cloud conversation that they have with customers. And their IP will differentiate them and bring them higher margins, by offering broader services around the Microsoft stack, for example.
  • Take advantage of all the benefits of the Microsoft Partner Network. The average value of MPN membership is $320,000, according to the company, in the form of technical benefits, internal use rights, trainings and incentives. The IDC study found that the successful cloud-oriented partners used their MPN benefits 1.5 times more than traditional IT partners.

Melanie Gass, president of New York City-based CenterPoint Solution and a Microsoft Cloud Accelerate Partner, started a cloud division a year ago to expand her business and to help customers migrate to Microsoft cloud computing -- to Office 365, SharePoint, InTune and Dynamics CRM.

“Some customers believe that it’s a cost barrier to move to new technologies, but we show them that with cloud that isn’t the case,” she said.

CenterPoint is also utilizing Microsoft’s Get2Modern, a joint campaign between Windows and Office to help Windows XP and Office 2003 customers migrate to Windows 8 Pro and the new Office 365 or Office on-premises.

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