Global Internet Network

Margin calls

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16 March 2016

Okay, so it’s not as catchy as The Fellowship Of The Ring, nor does it fire the imagination like Harry Potter and the Philosopher’s Stone or The Lion, The Witch and the Wardrobe, but The Modern Microsoft Partner Series, Part 1: The Booming Cloud Opportunity, could prove equally inspiring for channel partners.

While this e-book ‘focuses on one of the greatest profitability areas for partners today, the cloud’, it is part of a series of five which will also look at the successful attributes of a modern partner.

If you are presently a modern and successful partner but were unaware of what those attributes were, they are:

  • Differentiation as a means to stand out in the competitive cloud market
  • Modernising sales and marketing engines to adapt to shifts in the customer buying process
  • Optimising business operations to create a more streamlined, profitable business
  • Deliver customer lifetime value by building lasting relationships to increase average revenue per customer

I should point out at this stage that using famous works of fantasy as examples of long-running series of books should not be taken as suggesting that e-books concerning the modern Microsoft partner are equally fantastical. Also, by listing the subject matter of the other four e-books in the series, I apologise if I’ve spoiled the ending for anyone.

Anyway, the press release announcing the e-book series provides some figures that should pique the interest of partners still considering whether the cloud is worthy of their attention and investment.

For example, it predicts that worldwide public IT cloud services (SaaS, Paas, IaaS) will reach $141 billion revenue in 2019. In addition to achieving an impressive growth rate of 19% year-on-year, it is also close to six times higher than the rate of overall IT spending growth. It also finds that “greater cloud spending” on hardware, software and the professional and managed services surrounding public and private cloud technology, is expected to exceed $500 billion by 2020. You don’t have to be a Harry Potter fan to think that’s an almost magical figure.

However, none of those figures answer the most important question for all the relevant parties: ‘What’s in it for me?’ Happily, Microsoft does provide some answers. In terms of partners, those with 50% or more of their revenue in the cloud have twice the growth, one and a half times the gross profit and nearly twice as much the recurring revenue of other partners.

It also reports that for every $1 of Microsoft cloud services they sell, cloud partners typically attach $5.87 of their own offerings. You have to admit that looks pretty impressive at first glance. Second glance too. To put it in context, the average value added partner sells $4.14 of its own offerings, so the difference might not be massive but it’s marked.

In any case, whatever you may think of the literary merits of the Microsoft e-books, there are two things that separate them from the likes of Lord Of The Rings and Harry Potter: they might help you make money and they’re a lot shorter.

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