Opportunities according to Microsoft
Updated: Jul 1, 2021
I have been part of the Microsoft ecosystem in South Africa for over 20 years. More specifically, I have been involved in the Partner ecosystem as a systems integrator.
It is always interesting to look at the research Microsoft performs periodically with the IDC to show the opportunities for companies working alongside Microsoft.
The last study I could find that looked at the international market was the "Digital Transformation Opportunity: Aligning business strategy to the digital transformation market opportunity".
The essential points made in the article was, for every $1 of revenue Microsoft makes, the associated partner revenue is $9.64. This shows that there is a significant opportunity.
However, this is hugely dependent on your geographic location, and in South Africa, I expect the revenue earned by partners is less than $9.64 for every $1 to Microsoft.
It also talks about the expected size of the technology market, $1.7 trillion. The customers will become more digitally transformed where 45% of their revenue is generated by "future of commerce" business models.
Microsoft drives its platform plan and states that partners' opportunity is where they have that aligned to this plan.
The areas are:
Cloud mastery, providing cloud services to customers.
Modern technologies, using cognitive services, big data and IoT to transform customers.
New skills, where prospective employees will require AI and analytics skills and employers will need to create digital programmes to fill these skills.
Recurring revenue, partners need to offer managed services and packaged IP to generate higher margins.
These areas are areas for growth in my experience, though competition will be high from other platforms, partners, and from the mega-vendors themselves.
Microsoft competing with the partner base was brought home to me in an article on ZDNet, which spoke about Gavriella Schuster, Microsoft Corporate Vice President of Commercial Partner, leaving Microsoft ( https://zd.net/3dKjp3R ). The report states, "Microsoft last year stepped up its direct sales focus with its increasingly strategic Microsoft Consulting business."
So, competition is fierce.
The South African Context
A study, specifically relating to South Africa, was done in June 2020, "The Impact of Cloud in South Africa", talking about the customer views on adopting the cloud and the areas of importance for customers.
It reinforces the importance of cloud, modern technologies and skills and their importance in 4IR.
The market opportunity in South Africa is $14.6 billion, which is less than 1% of the global opportunity but sizable enough in the South African economy.
Some interesting insights from the article are:
The top 5 business priorities are cybersecurity, innovation, customers, cost and efficiency and performance.
The adoption of cloud will grow 29.8% (CAGR) between 2019 and 2023
Key influencers of adoption are access to the latest technology, improved security, standardisation, business agility and the visibility of IT costs.
The top expected business benefits, operational efficiency, improved quality of IT service, reduced CAPEX, digital transformation of the business and improved security and resilience.
While the benefits of Microsoft's investment in the cloud and Azure data centres still needs to be realised, there are certain areas that partners can support and work with South African customers to achieve.
Foley, M.J. (2021) 'Microsoft veteran and partner chief Gavriella Schuster is out as CVP of Commercial Partner', ZDNet, 30 March. Available at: https://www.zdnet.com/article/microsoft-veteran-and-partner-chief-gavriella-schuster-is-out/#ftag=RSSbaffb68.
International Data Corporation (2018) 'Digital Transformation Opportunity: Aligning business strategy to the digital transformation market opportunity'. Available at: https://assetsprod.microsoft.com/mpn/digital-transformation-opportunity.
Ranjan, M. and Soliman, A. (2020) The Impact of Cloud in South Africa. Available at: http://www.idc.com/mea