Microsoft Partner Report Uncovers Surprises in Transition to Cloud

Tuesday, June 28, 2016

Partners Step in to Help With Rapid Office 365 Updates While Expanding Beyond Microsoft

BOSTON, Mass. today released its second annual report on the transition to the cloud for Microsoft ecosystem partners, “The Evolving Microsoft Cloud: Opportunities and Challenges for Microsoft Ecosystem Partners,” based on an April survey of more than 200 Microsoft partners around the globe. Building on the 2015 report, this year’s results revealed that partners are witnessing Office 365 technology updates, refreshes and changes outpacing their customers’ ability to keep up with them. Increases in cloud migration and adoption are driven by organizations wanting to gain access to the latest technology improvements, pushing cloud costs savings as a secondary benefit. Given the complexity and rate of change, partners see new opportunities to step in and provide the much needed bridge to help companies keep up. And, despite increased confidence in Microsoft’s cloud strategy, partners continue to adapt to the new cloud realities by expanding their capabilities beyond the Microsoft ecosystem.


“As Microsoft continues to innovate in the cloud, its rapid release of new capabilities is overwhelming its customers who are struggling to make sense of them,” said Yaacov Cohen, CEO of “This creates opportunities for Microsoft partners to offer consulting services and innovative products that hide complexity and simplify the evolving Office 365 user experience. It’s a win-win.”


This finding is borne out by the fact that this year, partners report staying current outweighs the cost savings of moving to the cloud for companies. The majority say customers place greater value on user access to the latest application versions (69 percent), trumping cost (56 percent) as a primary reason for their customers adopting Office 365. As Microsoft continues to release updates at a rapid rate, and as IT continues to push for increased access to the latest refreshes, business users find it hard to keep up and make the most out of the technology. As companies seek cloud solutions that are easily consumed, partners see an opportunity to build user-friendly solutions around Office 365, with 31 percent adding services to address and enhance the user experience. Additionally, 24 percent cite such services as having the greatest potential for revenue growth, a 148 percent increase over 2015.


Compliance and information governance are now front and center on the partner and customer agenda, with partners focusing on the importance of managing, classifying, storing and retrieving emails. In response to a rising push for compliance and record management across all customer segments, more than half of partners now offer compliance services (56 percent) and/or provide information governance and records management services (53 percent).


Partners are also learning to live with Microsoft Professional Services. As the pace of change outstrips organizations’ ability to absorb the information or allow them to develop materials to train the trainers, Microsoft Professional Services is also experiencing challenges in keeping up with the pace. This is likely contributing to partners’ dwindling concerns about Microsoft Professional Services as a competitor – only 26 percent view competition from this group as a major challenge versus 38 percent in 2015.


Due to the rapidly evolving cloud market, partners are unable to rely solely on the Microsoft ecosystem. While partners express increased confidence in Microsoft’s overall cloud strategy, they see new growth opportunities in a best-of-breed world. Two-thirds indicate they partner with cloud providers other than Microsoft across a wide array of functional areas, with backup, recovery and archiving the most common category (38 percent), followed by CRM and help desk and support at over 20 percent each. Those who look to expand their capabilities are vying the enterprise file synch & storage (52 percent) and content management and collaboration (48 percent) as their new competency investments.


Additional findings from the report include the following:

  • With Microsoft partners now readily embracing Office 365 and preparing to usher in the next generation of SharePoint, crafting hybrid services is being increasingly explored as a front-and-center strategy.
  • With Microsoft’s APIs in hand and the growth of the Office 365 platform, partners are seeing opportunities to create complementary solutions that simplify user experiences and enhance overall productivity.
  • A year further along in the transition to the cloud, partners have greater confidence in their ability to create strong cloud/Office 365 competencies, with almost every challenge category showing reduced concern by respondents over 2015. Up-leveling team skills remains the top concern at 41 percent, with partners relying on self-education (73 percent), Microsoft training (64 percent), conference attendance (32 percent) and hiring trained people (32 percent) to help bring team members along.
  • Microsoft is encouraging its partners to consider offering vertical solutions around Office 365, particularly in industries such as healthcare, legal, and agriculture. While still a small percentage of their overall service offerings, vertical solutions are growing as a percentage of their portfolio with more than a quarter offering vertical solutions in 2016, a 44 percent increase over 2015. Additionally, almost a quarter see vertical solutions as providing the greatest revenue potential for their business in 2016, a 42 percent increase over 2015.


“Microsoft partners and IT teams have to throw away their on-premises playbook – the cloud is a different game,” says Tony Redmond, principal at Redmond & Associates and author. “It is time to reshape your business and face the new cloud realities and opportunities. That means taking a broad perspective of Office 365 that goes way beyond the boundaries imposed by a single application such as SharePoint Online or Exchange Online. People need to upskill by developing new competencies such as compliance, advanced security and analytics, so that they can exploit the new capabilities available in Office 365 to solve real business problems. Those who remain fixated on just one part of Office 365 will waste the opportunities that open up through the new development fabric that Microsoft has created.”


Download the complete report for the full stats, findings and detailed analysis here.


About provides a suite of user experience products that empower today’s distributed workforce to get work done on their own terms. We put people first, insulating them from technology complexity, enabling information workers to complete many workplace tasks directly from the friendly confines of their email client. For Microsoft customers, increases the adoption and return on investments for SharePoint Online and on-premises by bringing it directly into Outlook. Thousands of enterprise customers count on to provide seamless information governance, collaboration, knowledge retention and email and records management using SharePoint, Office 365 and other Microsoft collaboration tools. is a Microsoft Partner of the Year Finalist and an IBM global partner.


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