Microsoft has had a lot to say in terms of cloud computing developments in recent months, and this latest report in association with IDC may come as no surprise: channel partners who have more than 50% of revenue in cloud are experiencing major payoffs in business growth.
The report surfaced at the company’s Worldwide Partner Conference (WPC13) in Houston, and found that cloud partners perform better in various KPIs; revenue per employee, higher gross profit, higher customer acquisition, and of course faster growth.
But how many partners are there? The stats from the opening day’s play at WPC13, as The VAR Guy reports, were impressive.
3.2m businesses currently use Office 365; 150,000 partners worldwide are able to sell Office 365 and Microsoft cloud services. Over the past 12 months, 22,000 partners did sell Microsoft public cloud services – certainly impressive figures. But what other trends did the research uncover?
We’re a one-provider organisation
The key takeaway evident from the research was that, for two thirds of respondents (63%), they expected their cloud computing needs to be taken care of by a single service provider. Similarly, 67% said they expected their one CSP to provide a wide variety of cloud services, and nearly three quarters (74%) expect their CSP to move their cloud back to on-premise if necessary.
In other words, customers don’t want a litany of service providers. This may spell bad news for smaller players, yet the report advocates they build and sell on PaaS platforms to counter this.
In keeping with current trends, the report advocates that the best performing partners are adopting a hybrid strategy. “A partner’s ability to offer hybrid options to customers results in optimal revenue capture opportunities,” the report notes. Yet even though cloud is growing five times quicker than the IT industry as a whole, “the reality is that customers will continue to have on-premise technologies for a long time to come”.
The report also examined the ‘next wave’ of cloud applications. Business apps excluding ERP were seen as the next biggest thing, followed by CRM and ERP financial/accounting apps. It’s certainly a long way since collaboration and email were the only workloads customers needed, as the report notes.
As inferred by this site yesterday, North America (44% public cloud share in 2016) will continue to dominate against other continents (Western Europe 25%, Asia Pacific excluding Japan 20%), with LATAM experiencing the fastest growth.
And this growth can only mean good news for those affiliated with Microsoft. According to the report, companies less than five years old are the most likely to move into the cloud – primarily because there’s less chance of them building an old school data centre.
It’s not just the cold hard cash where companies benefit either; cloud can influence the bottom line both directly and indirectly. As the report shows, partners believe that cloud is a great way to meet new prospects because it’s “topical, companies are perplexed about options, and they need advice.”
Why? Again, this is where hybrid kicks in – even ‘born in the cloud’ companies believe they need their share of on-premise technology.
“This research validates our belief that the most successful partners are the ones that offer a hybrid approach to IT,” Jon Roskill, Microsoft Worldwide Partner group corporate VP said. “Microsoft is the only vendor equipped to help partners offer their customers a suite of on-premises and cloud solutions in both public and private cloud environments.
“By offering a hybrid approach, it better addresses customer needs and, in turn, helps our partners make more money.”
Do you agree with these findings? Is there more likelihood that companies will only need one CSP in future?