Filling in the Blanks of Microsoft's AI Guidance for Partners

Based on this year's Microsoft Inspire conference, it seems that a cycle of predictions that started a dozen years ago has finally realized its full fruition. Back then, in 2011, Product Manager Bill Patterson did something no one else had done: He launched the 2011 version of Microsoft Dynamics CRM in the cloud before it was distributed on media. As then-Global Channel Chief Phil Sorgen explained to me, "Microsoft only has one job and that is to provide a platform that partners can run their solutions on." This, of course, presupposed that partners had their own solutions.

For his part, Patterson explained that we would someday see "an evolution of solution," suggesting that when solution providers refer to their "solution," they're referring to more infrastructure. "Customers demand business-relevant solutions," explained Patterson. But where would those come from?

Two years later, when he became corporate vice president of Small & Midmarket Solutions & Partners (SMS&P), David Willis implored partners to start thinking about creating their own intellectual property. He foresaw a time when, if you didn't offer your own IP, applications, data transfer methodologies, utilities and more, you'd miss the coming opportunity.

My only question has remained the same for all these years: How did they know? It is sometimes startling how accurate these Microsoft partner execs' predictions were. As reselling products became more of a losing proposition, smart partners heeded the advice of these leaders. They started building, packaging and marketing apps. They focused on verticals, which made their targeting laser-like. They became familiar and then expert at providing once-considered unsellable services like consulting, systems design, project management, business process analysis, information architecture, governance and so much more.

I'm not sure we'll ever really see a repeat of such foresight. At this year's Inspire, Chief Partner Officer Nicole Dezen explained the "new" Microsoft AI Cloud Partner Program with the same glowing terms with which the earlier Microsoft Partner Network, the Microsoft Channel Partner Program and other iterations were introduced: "The next generation of the MCPP, one designed to put partners in position to benefit from the changing and increasingly complex demands of modern customers."

Then came the patriotic ultimatum, a clear echo of the past: "Partners who lean into this new economic opportunity are creating value for their customers, for their own company, and for the greater economy of their community or country."

A dozen years ago, Microsoft was talking about the cloud. Now, they're talking about AI. If he were still at Microsoft, Steve Ballmer would call this the latest "Big Bet."

Save the Mile-High Platitudes -- Where's the Beef?
Perhaps I'm suffering from six decades of listening to all this fluff, but I was looking for the guidance for partners to find where they fit in the new AI "opportunity." It may have been out there, but I don't think it made the main stage at Inspire.

When partners lost the income opportunity from selling servers, they wanted to know how they could replace all that lost revenue by selling cloud services. Sometime around 2006, now-departing Corporate Vice President of Business Applications Vahe Torossian explained to partners that if they didn't embrace the cloud, within four years they'd become irrelevant. Still, the only guidance we seemed to get at the time was that we'd have to sell twice as much to make similar money. (That fell flat, no surprise.)

Now we're all running around like Chicken Little saying, "The sky is falling," worried about whether AI will take away everyone's jobs. Very few partners have the experience, skills and maturity required to determine for themselves how they can best take advantage of the AI "opportunity." The overwhelming majority of partners are struggling to figure that out.

Those of you who remember the Microsoft Professional Certification program may also remember my skepticism at that time. Then I found out that the training was not professional, and didn't lead to any formal certification. I was dismayed, not shocked. The approach to the AI "opportunity" so far seems similar.

Potential Beef
If you possess significant levels of sophistication in high-level development, you're probably already at work on your own applications that integrate AI technology. Bravo. Otherwise, you're back where you were when server sales went away. If you don't do app dev, what do you do next?

The answer will sound familiar, but the reality of AI technology is that the real opportunity for most partners lies in application. AI and machine learning are being incorporated into everything from IT support to retail to transportation, manufacturing and much more. The available applications exist as tools meant to support the activities of human users. They require a veritable slew of additional fee-based services that you can provide, either yourself or through partners. These include user training and support, strategic consulting and planning, provisioning, monitoring, management, regular client meetings to discuss planned improvements, and much more -- limited only by your innovative imagination.

Perhaps the best news is that the providers of these AI/ML-based applications need deployment partners. They are looking for partners who can effectively present their solutions to potential customers, then influence and close project deals. Then they get the opportunity to perform as many of the deployment tasks as possible to earn substantial additional revenue, both one-time and recurring.

Microsoft Beef
I am totally confident that our partners at Microsoft will continue to bring out new AI/ML-based offerings for us to market to our customers. I'm also confident that these products will be excellent by their 3.0 or 4.0 versions. But for right now, here's what partners need to think about and start planning for.

The most direct path to AI/ML success is in the configuration, design and deployment of reliable software platforms and products that incorporate AI technologies. The extra bonus is that the software developer will be there to train, support and guide you. As always, you need to interview them, evaluate their program, research their success rate and reputation, and decide if they're the kind of company you feel comfortable partnering with.

As always, watch out for brash, new startups with no ballast or track record. You may find one diamond that makes all the digging worth it, but better to stick with the reliable partners you've always been comfortable with. They'll be measuring you for your ability to influence and bring in projects that pull through plenty of their licensing. They'll be recognizing that by helping you grow your company in all the right directions.

The Evolution Continues
The predecessor to this column was called "The Changing Channel." At a given point around 2017, we decided that the channel had changed; where there were once resellers, there stood MSPs, then CSPs. We launched "The Evolving MSP" to track the more gradual growth of those who made the transition in earnest.

There's no question that AI and ML are incredible fertilizers for the seeds that service providers have planted in their businesses. The trick is to not try to overshoot your own capabilities: Apply the technology for fun and profit.

Posted by Howard M. Cohen on August 01, 2023