Microsoft Reports Surge In Co-Selling And CSP Partners

The sweeping changes for Microsoft channel partners that were rolled out at the Inspire partner conference in the summer appear to be bearing fruit with increased solution provider participation in key Microsoft programs.

On Wednesday, Microsoft Channel Chief Gavriella Schuster (pictured) reported that its co-selling program—which gives special incentives to Microsoft salespeople to work more closely with solution providers—has seen massive adoption by partners since Microsoft began promoting the program at Inspire. And so has Microsoft's Cloud Solution Provider (CSP) program, which has been a top priority for Microsoft as it continues shifting to a cloud-focused business model.

[Related: The Top 10 Partner Takeaways From Microsoft Inspire]

The number of partners transacting through a CSP has grown by 83 percent in the past 12 months, to reach a current total of 45,000 CSP partners, according to Microsoft.

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"What [CSP] was and what that means is now broadly understood in the partner community, so now we're seeing it being embraced," said Ric Opal, vice president at Oak Brook, Ill.-based SWC Technology Partners. "That gets coupled with the fact that Microsoft has made the partner interaction with their field sales teams relatively seamless at this point, where CSP is completely accepted as a great strategy for customers and partners. And it's viewed that way by Microsoft field sellers as well."

Partners use the CSP program for procuring Office 365 seats and usage of the Azure cloud platform. The program offers a monthly subscription that can be adjusted based on usage from month to month, in contrast to Microsoft's Enterprise Agreement, which involves three-year agreements for on-premises deployments. The CSP approach is seen as more flexible by many businesses as a result of its consumption-based model.

A major change unveiled at Inspire was the launch of new incentives for Microsoft's salespeople tied to promoting the CSP program to customers. Historically, Microsoft salespeople hadn't always had the motivation to work with CSP partners because of mechanisms such as the Enterprise Agreement.

With co-selling, Microsoft has been offering its salespeople an incentive of 10 percent of the contract value on a solution that's jointly delivered with partners.

The result has been an explosion of interest among solution providers in the co-selling program, Schuster said Wednesday during her annual "State of the Channel" conference call. The number of partners involved in co-selling now stands at 9,000, up from 1,400 in July, said Schuster, a corporate vice president and head of the One Commercial Partner organization at Microsoft.

The co-selling program is "not selling Microsoft services, but actually selling partner services," Schuster said during the conference call. Co-selling means "taking an end solution, that meets the customer demand more specifically, and bringing that partner in to sell with us to those business decision makers," she said.

Schuster also signaled during the call that Microsoft is ramping up its efforts on enabling digital transformation, through technologies such as artificial intelligence. Digital transformation could soon be a $20 trillion market opportunity, she said, citing IDC research, and Microsoft aims to "help our partners grab a piece of that pie."

To that end, Redmond, Wash.-based Microsoft on Wednesday launched a new playbook for partners that are looking to develop an AI practice, which provides guidance on creating solutions around machine-learning and cognitive capabilities, Schuster said.