More than 400,000 businesses across the world are part of Microsoft's Partner Network, which works to bring innovative products and services to global customers. For almost 30 years, Microsoft's partner program has been developing industry-specific solutions that have helped numerous businesses thrive in today's dynamic marketplace. They have aided companies in adjusting to the pandemic and seizing growth possibilities that have arisen as a result. Microsoft is dedicated to providing its partners with the resources they require to help their clients across industries and enterprises undergo a digital transformation.
Changes in the Microsoft Cloud Partner Program: Let’s Take a closer look
On October 3rd, 2022, "Microsoft Partner Network" officially became "Microsoft Cloud Partner Program". This significant initiative is part of Microsoft's commitment to the Cloud as a critical lever for innovation and growth.
MCPP six core area competency
Microsoft's new strategy for supporting its partners reflects the growing shift of business operations to the cloud. The goal seems to be bringing the sales strategies of Microsoft's partners closer in line with the ways in which customers buy and use those products.
The Microsoft Cloud Partner Program is for all partners in their ecosystem, whether they sell services, software, or devices. There are six solutions highlighted that are compatible with the Microsoft Cloud and will be important areas for partners to invest in future and deepen their relationship with Microsoft.
- Business Applications
- Modern Work
- Security
- Azure Data and Artificial Intelligence
- Azure Infrastructure
- Azure Digital and Applications Innovation
Looking ahead, Microsoft seems to be redesigning how partners are categorised and their abilities are evaluated in the hopes of better aligning with customers. The following are two potential qualifying yardsticks that can help clients better understand a partner's abilities:
- Attaining predetermined criteria in each solution area, which may be reflected in a partner capacity score, determines a partner's solutions partner level.
- Expertise and certifications in certain solution areas allow solution partners to set themselves out from the competition and demonstrate their technological prowess.
In addition to helping customers choose partners with technical competence and a history of producing creative solutions in one of the specified solution areas, these two certification categories can help certify a partner's potential to address specific and expanding client requirements.
Microsoft's commitment to expanding its partner ecosystem has led to a heightened focus on measuring partners' capabilities about specific solutions. Microsoft has introduced the "partner capability score" as a way to evaluate the efficiency, expertise, and satisfaction of its partners concerning their customers. To calculate the 'partner capability score,' factors like certifications, new customers, successful installations, and expansion are taken into account.
Some restrictions and benefits for current partners, however, will not change. Let's examine the new programme criteria to see what has changed and what has remained the same.
- Nothing will change for partners' businesses or programs before October 2022). This includes anniversary dates and benefits.
- Partners may continue receiving their current benefits or upgrade to more comprehensive plans that better meet their needs.
- IURs, which include on-premises licences, cloud service subscriptions, and Azure credits, is now known as "Product Benefits."
- Between October 2022 and September 2023, there will be no adjustments made to any partners' incentive eligibility.
Microsoft is finally putting gold and silver in retirement with this update. They are simplifying the process of joining the network. According to Rodney Clark, Microsoft's Global Channel Chief, they have a base membership that's available to all partners in their ecosystem and newcomers that join the Microsoft Cloud Partner Programme.
Potential Impact and Opportunities
Microsoft is positive that its approximately 400,000 current partners will benefit from the new partnership program.
Large-sized partners, who serve customers in a wide range of sectors including healthcare, finance, retail, and others, given their scale of relationship with Microsoft would certainly continue to evolve the relationship as part of the new partnership program. Many of these large partners, know that the decision is about How they will evolve their relationship and not whether they would do so. They have been communicating their intent with Microsoft senior executives and channel partner support to create a road map to better understand the changes in the partners' programs and what opportunities this could create for them. Their intent is clearly to do what is necessary to acquire the new Microsoft Cloud Partner Program qualifications by investing heavily in staff certification, training and empowerment.
However, for SMB(Small and Medium Business) channel partners, given the relative scale, many partners, are looking to make key decisions around their future strategy as it relates to Microsoft Cloud and evaluating how to make the required investments to acquire and maintain the new program qualifications. For some of the existing Microsoft partners, it may be necessary to reprioritise or balance resources between client-based projects and certification up-skilling to achieve new capacity certifications required to meet program qualification criteria. This could be a major obstacle for some, given their limited resources and potential impact to revenue-generating client projects. They must either make investments and build internal processes to coach their current staff in phases to adapt to the new initiatives or hire new employees exclusively for the new program needs. Nevertheless, both approaches for SMBs will require further investment and likely external funding, which if done right, will create growth opportunities for partners who are better prepared for the future.
In response to the challenges that Microsoft foresees its various tiers of partners encountering, the company has made available to them a subset of the services offered through the Microsoft Cloud Partner Program. Services like a cloud enablement desk, help and support inquiries, digital marketing content on demand, and marketplace rewards will now be easier to access and available to all partners.
SA’s Perspective
SA expects a significant rise in investments and channel consolidation trends in response to Microsoft’s new cloud partner program, as many partners are exploring new ways to advance up the capabilities ladder, collaborate or raise growth financing to achieve increased investment levels, or merge capabilities with larger strategic partners who can assist them in crossing the chasm, while they fill a key capability gap in one of the six solution areas. Smaller partners may need to combine resources with larger partners that have previously invested to attain scale and demand. This creates a sense of urgency and presents many opportunities for smaller managed service providers to speed expansion if they can rewrite their playbook to win in the new environment by selecting the right areas for specialisation and thinking strategically. Smaller partners with clients in diversified areas like healthcare, telecom, and BFSI must establish a "narrow and deep" plan and improve their Partner Capability Score by September 2023.
How can SA help Microsoft Partners capitalise on this Growth Opportunity?
We think most Microsoft partners' top priority over the next year should be to become certified as a "Cloud Solutions Partner." Many small and medium-sized Microsoft partners are searching for alternate paths and methods to re-calibrate the investment and resources they may need by September 2023 to meet the new certification standards.
We see this as an opportunity to expand along the new expertise areas and consolidate their place in the new Microsoft Cloud Partner ecosystem. SA continues to be a relevant partner advising such clients on their growth and investment strategy as we work with key Microsoft NCE partners to explore complementary investments and on a selective basis, acquisition-led transactions, where there can be a case for large value creation.
We are prepared to help small and medium-sized Microsoft partners secure expansion capital to meet new programme standards. We are seeing both private equity and strategic investors exhibit a heightened interest in investment opportunities within the Microsoft Cloud partner ecosystem and this trend may further accelerate in the second half of 2022. We believe this creates tremendous potential for partners that can adapt swiftly to the new environment and capitalise on strategic investment options for accelerated expansion, given the strong demand for specialised Microsoft partner capabilities across the ecosystem.
Send us an email at [email protected] with your opinions on this blog or observations on the Microsoft Cloud Partner Ecosystem.