Microsoft CEO Nadella Touts Partner Opportunities Of New Intelligent Cloud, Intelligent Edge

Information technology is moving into a new pattern of data creation and consumption that Microsoft CEO Satya Nadella called "intelligent cloud/intelligent edge." This tech transformation, Nadella said, is driving Microsoft's product development directions and creating huge opportunities for the vendor's legions of solution provider partners.

Nadella, in his keynote speech Monday kicking off Microsoft's Inspire partner conference in Washington D.C., offered his vision of the direction of IT as a framework to unveil Microsoft 365 and several other integrated products. But he also touted Microsoft's focus on partners, hinting that it has stayed constant through changing IT trends.

"This ethos of being partner-led is always going to be in everything we do," Nadella said, addressing some 17,000 attending partners in attendance.

[Related: Microsoft Partners Expect More Emphasis On The Channel Following Round Of Layoffs]

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Since taking the reins as Microsoft CEO in February 2014, Nadella has often described the IT industry as being in a "mobile first, cloud first" stage. In his keynote, he said Microsoft sees "a real rapid shift to a new paradigm" that he called "the intelligent cloud and the intelligent edge."

That paradigm will be defined by three key characteristics, Nadella explained: Every computing task and experience will be "multi-device, multi-sense" with multiple means of input and output; artificial intelligence will be built into every application and device; and there will be an increased use of containers, microservices and server-less technologies that provide new ways to develop, distribute and manage applications.

Intelligent cloud and intelligent edge computing will ultimately generate $4.5 trillion in IT spending, Nadella said, in contrast to the $2.5 trillion created by mobile first/cloud first IT architectures.

"With increasing digitization, where every part of our society and economy is being fundamentally transformed because of digital technology, the opportunity is greater than ever before," Nadella said, relating his vision back to his partner audience. "Being in this industry, being in this [Microsoft partner] ecosystem, the opportunity is tremendous."

Relating his vision to Microsoft's product direction, Nadella said the software company's product development would increasingly focus on four areas: the modern workplace, business applications, applications and infrastructure, and data and artificial intelligence.

That led to Monday's product announcements, chief among them the debut of Microsoft 365, an integrated package of the vendor's Office 365 cloud productivity applications, Windows 10 and enterprise device management and security capabilities. The Microsoft 365 software is being offered in two editions: Enterprise, for large companies and Business, for SMBs.

"We want to bring these products together as a complete solution, an integrated solution," Nadella said. While Microsoft 365 addresses the needs of large businesses, Nadella emphasized that the product's capabilities also "have the same opportunity to democratize access to these tools to every small and medium-size business." He called that "one of the biggest takeaways" from his speech because "I know many of you are serving small and medium-size businesses."

"Instead of ordering three things, this gives all of the technology needed to participate in today's transformative workplace, yet in a very secure manner," said Ric Opal, senior director at Oak Brook, Ill.-based SWC Technology Partners. "If I can simplify that in my ordering and provisioning process, and wrap managed security services around that, that's a pretty simplistic way for me to bundle and a pretty simplistic way for a customer to transact."

Nadella also announced between the new Microsoft 365, the Dynamics 365 cloud ERP application set Microsoft launched last year, and the LinkedIn business social network that Microsoft acquired in December for $26.2 billion. That includes links between Dynamics 365 for Sales and LinkedIn Sales Navigator.

"That's the richness that we think is going to create a tremendous opportunity for all of you as partners," Nadella said.

Michael Goldstein, president and CEO of Fort Lauderdale, Fla.-based LAN Infotech, said Nadella's opening remarks had an "inspiring" message. "I was impressed and it's a great start for the three-day event," he said. The demonstration of the integration between Dynamics 365 and LinkedIn was a highlight, and "really shows the full power of the solution set," Goldstein said.

In addition, Nadella introduced the Azure Stack hybrid cloud platform that hardware partners such as Hewlett Packard Enterprise, Dell EMC and Lenovo will carry.

"When we move workloads for our clients right now, there's probably more effort than there should be. Azure Stack is going to make that easier," said Kevin Crowe, executive vice president for strategy at Long View, a solutions provider based in Calgary.

Nadella was preceded on stage by Ron Huddleston, Microsoft corporate vice president and head of the company's One Commercial Partner organization. He outlined the vendor's efforts to streamline its partner operations and provide a single point of contact for partners.

Huddleston noted that he heard feedback from partners that working with Microsoft often felt like dealing with multiple companies. "You told me what you really needed was one way to get connected to all of the opportunities Microsoft has for you to grow across products and programs, one way to get connected with customers, [and] one voice to advocate for partners."

Microsoft created the One Commercial Partner organization in January in response to that feedback. "An organization that's not only partner-led but partner-first," he said.

Huddleston said Microsoft is investing $250 million in connecting partners to customers. This includes creating a new team of channel managers (which Huddleston promised would be very different from traditional partner account managers) to bring partners and customers together.

Huddleston also cited other changes Microsoft is making to benefit partners, including offering its sales representatives a 10 percent commission to co-sell deals involving solutions from Azure ISV partners, and a change to reduce conflict by now paying representatives based on Azure "consumed" revenue instead of Azure "build" revenue.

Last week Microsoft began a massive reorganization of its sales and marketing operations that is expected to result in layoffs of 3,000 or more employees worldwide.