Cloud use boosts profitability

Cloud-oriented partners, which make over 50% of their revenue from cloud-related sales, have been benefiting from 1.6 times higher gross profit, 2.4 times more new customers, 1.3 times more revenue per employee and 2.4 times faster overall business growth, according to a new IDC study sponsored by Microsoft.

"Cloud alone hasn't caused these impressive numbers, though that is absolutely part of it; top-performing partners were visionaries that took on cloud technologies before their peers," said Darren Bibby, program vice president of Channels and Alliances Research, IDC.

"We're at the point in the industry's overall cloud transition where partners that don't move some of their business to the cloud likely won't survive. And some partners that are getting ready to sell their business or retire may be okay with that. Most won't be," he added.

In the Asia Pacific, there are currently 9,000 Microsoft Cloud Partners, out of 28,000 partners registered in the Microsoft Partner Network in the region. According to Microsoft, Microsoft Cloud Services -- predominantly Office 365 and Azure -- have experienced 150% growth year on year in the APAC.


Single cloud service provider preferred

Concerning customer buying preferences, the IDC research also showed the importance of a comprehensive cloud vendor and its ability to offer various deployment options. The relevant findings were:

  • 63% of customers expect to have a single cloud service provider to meet their needs.
  • 67% expect to purchase a wide variety of cloud services from a single vendor.
  • 74% expect their cloud service provider to be able to move a cloud offering back on-premises if needed.

"IDC's data reveals that businesses prefer to buy end-to-end IT solutions from a single cloud vendor and want to work with a company they have an established relationship with. With Office 365 now on a $1 billion annual revenue run rate and more than 250,000 customers using Windows Azure, with thousands more added every week, our partners are in a prime position to support this," said Jon Roskill, corporate vice president of the Worldwide Partner Group, Microsoft.

"This research validates our belief that the most successful partners are the ones that offer a hybrid approach to IT. Microsoft is the only vendor equipped to help partners offer their customers a suite of on-premises and cloud solutions in both public and private cloud environments. By offering a hybrid approach, it better addresses customer needs and, in turn, helps our partners make more money."

Varying APAC cloud momentum

Jon Roskill, corporate vice president, Worldwide Partner Group, said, "Today the cloud is the topic. Although we are seeing a hybrid scenario developing, there will be many years before companies go into a pure hybrid cloud environment."

"In the last six months, the Singapore market has surprised me, as there were big customers moving to the cloud with the help of our partners," said Alvaro Celis, vice president, Microsoft APAC.  


"The Hong Kong market is watching. Like New York that blends the old and new together, organizations in Hong Kong tend to be more traditional, and favor the hybrid cloud approach more.""As for China, cloud adoption has just got started, as we've seen Chinese cloud customers buying through Hong Kong. Office 365 and Azure are the two predominant cloud products that the Chinese customers are buying, though the products are hosted outside of China. And we've seen quite a few Chinese partners in the conference," Roskill said. In China, there are currently 13,000 registered partners in the Microsoft Partner Network, 3,700 of them being Cloud Partners.

This article originally posted on Asia Cloud Forum