The Microsoft partner community can expect increased investment in industry clouds and technical training during the year ahead.
Microsoft's fiscal year 2022, which began in July, will emerge as "another significant investment year" for the vendor's partner team, according to Microsoft corporate vice president of global partner solutions Nick Parker. Speaking at Microsoft Inspire 2021, Parker noted that partners influence more than 95% of Microsoft's commercial revenue.
At Inspire, Microsoft augmented its industry clouds with a sustainability cloud, which aims to help organizations manage their environmental effects. The company offers industry clouds for healthcare, retail, manufacturing, financial services and the nonprofit sector.
"We'll continue to prioritize deep investments with our industry teams, building solutions with … partners in our industry clouds," Parker said.
Microsoft launched an industry strategy in FY 2018, which spanned sales, marketing business development and engineering.
Partners have benefited from the cloud push into vertical markets. Chris Woodin, vice president of business development and alliances at Softchoice, a technology services and solutions provider based in Toronto, said Microsoft's industry clouds make it easier to market and land vertically-oriented offerings.
"[Microsoft has] engineered capabilities into the platform that uniquely solve a specific vertical use case," Woodin said. Those capabilities not only facilitate sales, but also reduce Softchoice's costs when deploying cloud services to suit a customer's industry needs. That's because Microsoft's engineering accomplishes much of the heavy lifting of industry-specific customization, making it easier for Softchoice to tailor a cloud for a particular client, he noted.
Core BTS, an MSP based in Indianapolis, said Microsoft's industry focus lines up with Core BTS' client engagement strategy. "Over the last few years, we have been working to align sales motions and offers to specific industry solutions," said Tony Guidi, senior vice president of strategic partnerships at Core BTS.
Microsoft ramps up partner training
As for Microsoft's channel training regimen, the company will boost its FY 2022 investment in skilling by more than 250%. The investment will cover programs such as virtual hands-on labs and on-demand digital technical skills content, said Rodney Clark, corporate vice president of channel sales and channel chief at Microsoft.
In addition, Microsoft will focus its training investment in specific product areas such as Power Platform business applications. Citing Forrester Research data, Clark said the business applications addressable market, including associated services, will reach a projected $582 billion by 2023. Low-code applications created with Microsoft PowerApps add another $40 billion to the addressable market, he added, citing Garner data.
Other areas for training investment include Azure, data analytics and AI. Investments in security, compliance and identify, meanwhile, will provide partners with the building blocks for growth, "from training and solutions development all the way to go-to-market," he added.
"These skilling initiatives represent our expansion of the channel's technical acumen," Clark said.
Microsoft channel strategy updates
Other key Microsoft Inspire developments included the following:
- Microsoft said it has committed to increase the representation of Black and African American partners in its ecosystem by 20%. "Creating a more inclusive partner community is our responsibility and can be a huge differentiator for us," said David Totten, CTO of U.S. partner solutions at Microsoft. "Over the next three years, we're also providing new routes and access to capital and personalized guidance and support for these businesses," he said. The Microsoft Black and African American Partner Growth Initiative provides participating organizations with business resources and support.
- Partners with offerings in the Microsoft AppSource and Azure Marketplace digital sales venues will see commercial marketplace fees drop to 3% from the 20% industry standard, Parker said. Marketplaces have become important for IT services partners as a source of revenue.
- Microsoft will continue to invest in co-selling, noting $22.1 billion in contractual co-sell value since FY 2018.
- Go-to-market programs will see an FY 2022 investment growth rate that's four times the FY 2021 pace of investment, according to Microsoft.
Netrix acquires Contegix, expands in Northeast
Netrix, an MSP and professional services firm based in Chicago, has acquired Contegix's managed IT services business unit and plans to pursue additional deals this year.
Contegix, based in Pennsylvania, expands Netrix's reach in the Northeast and mid-Atlantic regions. The transaction also adds scale to Netrix's ITSM service desk and cloud managed services offerings.
The Contegix acquisition follows Netrix's December 2020 purchase of Prosum's managed services business unit, which was based in Los Angeles.
Netrix aims to build a national MSP and is also looking at international expansion, said Netrix CEO Rob Dang. Increasing the company's recurring revenue also motivated the MSP acquisitions, he noted.
Other deals could emerge in 2021, although they won't tie directly into the MSP sector, Dang said. The next transactions will focus on cloud refactoring, application development, data intelligence and product development. Netrix, which was recapitalized by OceanSound Partners in 2020, also aims to grow organically, Dang said.
Cantey Tech looks to expand with PE backing
LNC Capital Partners, a private equity firm that specializes in midmarket business services companies, has invested in Cantey Tech Consulting, an MSP based in Charleston, S.C.
Cantey Tech focuses on SMBs in the Southeast, while its Cantey EDU subsidiary provides IT support services to the education market. The MSP experienced average growth of above 20% annually over the past 13 years and the management team has set aggressive goals for the future, said Cantey president and CEO Willis Cantey.
LCN Capital Partner's investment will provide support and resources to fuel Cantey Tech's growth while maintaining its customer service levels, Cantey said. He cited the PE firm's track record of supporting portfolio companies' expansion, including growth through acquisitions.
Cantey Tech's acquisition strategy involves acquiring MSPs across the Southeast. Ideal acquisition candidates will have more than $2 million in revenue, significant recurring revenue from SMBs and a strong team, Cantey said. "We are currently evaluating acquisitions as far west as Texas and as far north as Virginia," he said.
Focus Investment Banking, an investment banking firm, represented Cantey Tech in the transaction.
In other deals this week, CompassMSP, based in West Hartford, Conn., acquired the assets of Tarrytech Computer Consultants, based in Tarrytown, N.Y. The company will rebrand as Tarrytech: A CompassMSP Company and operate within CompassMSP's Northeast region.
In addition, AllCloud, a cloud professional services company, acquired Integress, a data analytics company based in Philadelphia. Integress is a Snowflake Select Partner and an AWS Select Partner. AllCloud CEO Eran Gil said Integress' data and analytics practice helps platforms such as AWS and Salesforce meet in the middle, connecting back-office and front-office operations. AllCloud operates AWS and Salesforce practices.
- SoftwareOne, a Waukesha, Wisc., company that provides software and cloud offerings, partnered with Commvault. Under the arrangement, SoftwareOne becomes the first global partner to deliver Commvault's Metallic backup and recovery-as-a-service product. SoftwareOne will sell the SaaS data protection offering as BackupSimple. Manoj Nair, general manager for Metallic, said SoftwareOne will build managed services on top of Metallic.
- Anexinet Corp., a digital business solutions provider based in Philadelphia, added Ping Identity to its partner roster. The partnership will combine Ping Identity's identify access management technology with Anexinet's cybersecurity assessments.
- Aerospike, a NoSQL database company, expanded its partner program, which focuses on systems integrators, ISVs, cloud service providers and value-added resellers (VARs). Updates to the Aerospike Accelerate Partner program include investments in technical, marketing and sales resources, according to the company. Program participants can access a solutions lab, migration factory and the company's Ignite Go-to-Market Workshop. The latter identifies real-time data opportunities with partners.
- LogicMonitor, a monitoring and observability platform provider for MSPs, added 13 VARs to its partner network: AE Business Solutions, Alchemy Technology Group, Compunet, Empowered Networks, Evolving Solutions, GDT, Myriad360, OneNeck IT Solutions, Prescriptive Data Solutions, Software1, Technology Group Solutions, Thundercat Technology and Trace3.
- Komprise, a data-management-as-a-service provider based in San Jose, Calif., will support the AWS for Health initiative, which aims to facilitate cloud migration. The arrangement provides Komprise's reseller partners "a pathway to accelerate healthcare and life sciences customers' cloud adoption through a no lock-in approach to cloud migration and tiering," said Komprise global strategic alliance leader Caitlyn Possehl.
- Upstack, a web platform that sells cloud services through sales agents, named Meghan Hambacher Wilkinson as senior vice president of customer experience. Wilkinson was previously CRO at Telarus.
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