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EXCLUSIVE: Microsoft… Carving out a Kiwi channel path to cloud

EXCLUSIVE: Microsoft… Carving out a Kiwi channel path to cloud

“Why am I here? Because there’s huge opportunity in New Zealand.”

Phil Sorgen - Corporate vice president of Worldwide Partner Group, Microsoft

Phil Sorgen - Corporate vice president of Worldwide Partner Group, Microsoft

“Why am I here?” asks Phil Sorgen, Corporate vice president of Worldwide Partner Group, Microsoft.

Leaning forward, preparing to evangelise, the Redmond channel chief paused, looked up at the ceiling and delivered; “Because there’s huge opportunity in New Zealand.”

Sure, Sorgen uses that line on all the partners whether Kiwi, Korean or Kenyan.

“But we can back it up with facts,” he qualifies.

As confirmed by research analyst firm IDC, cloud-related services deals grew to $US2 billion during the past year across the Asia-Pacific region, representing a 43 percent five-year compound annual growth rate (CAGR).

Globally speaking, IDC forecasts the all-up cloud services business to be as much as $US200 billion by 2018, a key statistic Sorgen is keen to promote to partners.

“And to put that into growth terms for you,” he explains, “that represents a compounded annual growth rate of five times the rest of the IT market.”

Sorgen’s cloud advice is not new for partners however, especially for the strong contingent of Kiwis who made the trip to Microsoft’s Worldwide Partner Conference in Orlando last July, when the channel cloud play was unveiled at a strategic level.

Armed with regional statistics, Sorgen says channel partners in New Zealand with a strong focus on cloud, as well as mobility solutions, essentially benefit from greater revenue, higher margins and new customers.

“And we have the evidence that shows this,” adds Sorgen, quick to back up his claims with hard facts.

Referring back to a Microsoft commissioned IDC study across Asia Pacific - shown to Reseller News on the ground at WPC 2015 last year - Sorgen says Microsoft has a “huge ambition” for what it can achieve within the cloud, coupled with an “even bigger” ambition for what partners in New Zealand, much like the rest of the world, can accomplish.

“Cloud is the new norm,” says Sorgen, alluding to IDC statistics that claim cloud-oriented partners, with more than 50 percent of revenues from cloud offerings, make 1.8x more revenues and 1.4x more gross margin compared with non–cloud oriented partners.

Directly addressing the channel, Sorgen believes solutions partners in particular can grow gross margins by 20 percent, while value-added resellers can increase margins by as much as 100 percent by introducing cloud value-added services.

Read more: Microsoft's Azure Stack beta gets new services and DevOps tools

“During the past few years we’ve focused heavily on moving partners to the cloud, but to be honest our approach has now changed,” he adds.

“Most of our partners, and customers, are already recognising the benefits of the cloud and at Microsoft we’re investing heavily in allowing the channel to prosper within this new environment.”

With spending on public IT cloud services expected to reach $US127 billion in 2018, as reported by IDC, Sorgen is quick to remind partners that 92 percent of Microsoft revenue is channeled through its partner ecosystem, as opposed to 39 percent for the rest of the IT market.

New Zealand Cloud

In New Zealand, the Public Cloud market is bubbling along at a healthy rate, with the country once again leading the world in terms of widespread adoption.

With that culture, Sorgen believes comes opportunity for partners, as businesses and organisations nationwide begin to sit up and take notice of the shift.


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