Microsoft Cloud Growth – the power of the channel partner has spoken!

Microsoft recently released their FY18 Q2 results – with some staggering growth numbers. In addition to surpassing their own expectations for revenue growth, the following areas are of most significant interest for our industry:

  1. Office commercial products and cloud services revenue increased 10% (up 10% in constant currency) driven by Office 365 commercial revenue growth of 41% (up 41% in constant currency)
  2. Server products and cloud services revenue increased 18% (up 18% in constant currency) driven by Azure revenue growth of 98% (up 98% in constant currency)

Interpreting the numbers

Both increases speak volumes for the quality of the Microsoft solution offering but my personal view is that not enough credit has been given to their channel model. Microsoft’s CSP programme may have its admin and process challenges but I think the overwhelming revenue growth has a lot to do with the channel model. This makes sense especially when one considers how the model is maturing and that partners clearly understand how to leverage the benefits.

Azure growth, in particular, highlights the need for quality technical expertise that brings the customer closer to technology vendors. Over and above the partner having more intimate customer contact – it’s the ability to understand customer Azure needs and offer deep consultancy services that has been a key driver in Microsoft’s Azure growth.

Other vendors had better take notice! This growth can only continue as partners and customers embrace the benefits of Microsoft’s channel model!