Microsoft's partners are on track to double their earnings from cloud in two years. Here's how much money Microsoft makes from its partner program.
MicrosoftMicrosoft CEO Satya Nadella delivers the keynote speech at Microsoft's partner conference Inspire 2018
- On Thursday, Microsoft revealed that it has generated $9.5 billion in annual contracted partner revenue in the past two years.
- In two years, partners' earnings from cloud-based services are expected to more than double, according to an MDC Research survey of nearly 1,000 Microsoft cloud partners.
- The biggest way partners are helping customers is through data and server migration.
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Microsoft's partner program - a network of partners who help resell Microsoft's software to large customers- is a major part of its business.
In fact, 95% of Microsoft's commercial revenue flows through partners. On Thursday, Microsoft revealed that since the partnership program was introduced two years ago, it has generated $9.5 billion in annual contracted partner revenue. Microsoft also boasts that for every $1 it gets in cloud revenue, a partner makes about $10 on average.
An MDC Research survey of nearly 1,000 Microsoft cloud partners also gave insight into what partners are investing in. According to the survey, partners are choosing to invest more in their cloud businesses. In two years, their earnings from cloud-based services are expected to increase from 26% to 59% in revenue.
"Microsoft is a very partner driven organization," Gavriella Schuster, corporate vice president and One Commercial Partner channel chief, told Business Insider. "We know that in order to deliver value to our customers, we need partners across the industry to finish those solutions and bring them to market. Cloud services has actually accelerated that strategy."
This survey also revealed that partners mostly help customers with dealing with business data, which includes storing it and migrating it to the cloud. It said that 71% of partners deliver data migration solutions and 68% deliver server migration.
Besides that, 27% of partners deliver analytics and AI solutions. This includes Internet of Things or connected devices (22%), intelligent edge (9%), and mixed reality, which includes virtual and augmented reality (5%).
For example, surgeons may use mixed reality devices, like Microsoft's own HoloLens, to see how they can operate on a patient. They may also use robotics, powered by Microsoft's software for connected devices, to do the surgery.
Or, farmers may use connected devices in the soil to inform them of the best time to plant and water crops.
"Those are probably the most profitable practices a partner can build," Schuster said. "Data intelligence is a lot like bunnies in an organization. Once you let someone learn something about their business, they want to learn more. It creates a lot of projects and a lot of opportunities. That's one thing that makes it profitable."