Sunday, June 23, 2019
Microsoft focuses on AI and higher incentives to bolster partner ecosystem: an interview with Joe Macri, VP, UK Commercial Partner.
Joe Macri has been at Microsoft for over 23 years in a number of roles, but his current position as Vice President, UK Commercial Partner is significant as he has been responsible for leading a newly formed commercial partner organisation in the UK.
Microsoft has a large ecosystem in the UK which covers 20,000 organisations, and collectively these companies employ about 570,000 people.
“It’s an ecosystem that we’ve had with us for quite some time, although it has been through a lot of changes and transformation, and over the last few years we’ve been driving an initiative on developing skills and capabilities around the cloud platform,” says Macri.
Macri says the primary focus on the partner ecosystem is to grow their partners’ business on Microsoft’s platform while helping to serve customers. The secondary focus is for partners to create new opportunities and new channels to market.
“When I joined the organisation, the channel was very established and client service computing came along and our focus back then was around building the ecosystem around professional services, which is still what is in place today. The big trend that is happening today is around artificial intelligence and so there are new opportunities being created for our partners, and it’s about how they can create new channels to market and develop solutions leveraging AI,” he says.
The third focus for Microsoft is helping to transform their partners’ businesses as a result of disruption in every customer’s industry.
“Microsoft is transforming and the partner ecosystem needs to reform too – so there has been a shift from transacting with customers to delivering customer lifetime value. The work we’re doing is helping them modernise their sales and marketing,improve their skills and establish differentiated services,” Macri states.
UK leading the way in cloud
Sixty-three percent of Microsoft’s UK commercial business is in the cloud and this is increasing every quarter. Perhaps surprisingly, the UK is leading the way in the cloud rather than the US – but the Nordic countries, Australia and North America are not far behind.
Despite a focus on cloud and increasing numbers of partners and customers opting to use the cloud, does Macri believe it will ever get to 100 per cent?
“We still have customers that choose to have their solutions on-premise and what is core to our strategy is it’s about a distributed hybrid cloud rather than picking between on-premise, public cloud or private cloud – so we still expect to have customers, but the growth for us and our partners is fuelled by cloud so we’ll still see that rising,” he says.
As Microsoft competes with the likes of AWS, Google and Salesforce, it needs a differentiator in the way it works with its partners.
According to Macri, some of the main reasons that its partner ecosystem continues to grow is Microsoft’s “capability, pedigree and connection with enterprise customers”. He suggests that Microsoft’s three key cloud platforms – Azure, Office 365 and Dynamics 365 are all equipped with AI tools that partners can seamlessly use to help customers.
“We also have the largest global systems integrators, advisory firms, service providers, IP partners and traditional fulfilment channels – we see a lot of partner to partner co-operations going on within our customer base,” he says.
In addition, Schuster, who Macri reports in to, suggested that Microsoft are between 50 and 80 percent higher than AWS in terms of the actual incentive opportunity that a partner can have.
Macri says that this prediction was true, but highlighted that incentives were only part of the attraction for partners to work with Microsoft.
“Incentives are a part of the mix but are not the complete story about profitability. Firstly, business model fulfilment is a less profitable business model and secondly there is a shift towards cloud-based managed services, automation and DevOps. Traditional systems integrators have been disrupted by born-in-the-cloud providers; they’re moving to a more profitable model which is cloud-based managed services,” Macri explains.
“Finally, the third trend is around developing intellectual property (IP). IP can deliver a differentiation for the customer and then drive profitability for the partner – it can be developed in-house, acquired, or driven partner-to-partner, so every discussion I’m having with the largest partners is somehow talking about these three trends,” he adds.