Microsoft UAE general manager, Sayed Hashish on strategic channel investments
Hashish discusses channel initiatives, skills development and the role partners play in Microsoft's growth in the Middle East
How has Microsoft’s channel business been in the Middle East this year?
Microsoft’s channel business has shown significant growth in the region as we celebrate some key milestones with our investments and efforts to drive digital transformation to empower our customers – and partners are at the heart of this journey.
Earlier this year, we launched our Middle East Cloud regions in the UAE to exclusively serve our regional customers. These 2 data centres – one in Dubai and one in Abu Dhabi, are an expansion of our world-class global cloud infrastructure that are enabling our partners to migrate governments, and organisations of all sizes to the cloud, and harness the power of AI and other innovations.
At Microsoft, we’re very fortunate to have played a part in realising this potential, building strong partnerships to accelerate digital transformation and create sustained societal impact. These investments will continue to play a vital role in our partner ecosystem across the region.
What were the significant milestones that Microsoft, together with channel partners achieved in 2019 in the Middle East?
One of the major milestones in the past year has been providing enhanced commerce experience by enabling an agile way for partners and customers to better engage and drive greater transparency for effective business outcomes.
This has created one of the most significant opportunities for partners in providing value-added services that meet the changing landscape. We have also deepened our partnerships with industry peers like SAP, KPMG, Oracle. Another example is our strategic partnership with Etisalat wherein we are enabling digital transformation by extending our joint offerings into fields of cloud, AI, IoT, blockchain and bespoke industry solutions.
What are the main benefits of an on-premise cloud solution? How will local data residency help partners and customers?
The new cloud regions in Abu Dhabi and Dubai join Microsoft’s global cloud infrastructure to provide organisations, enterprises and developers in the UAE with access to scalable, highly available, and resilient cloud services while maintaining data residency, security and compliance needs.
This has seen increased demand for our cloud services and business for our partners locally and attracted many regional partners to showcase and expand their local markets to a global audience.
The UAE data centres will also deliver increased performance and meet local data residency needs for public and private businesses, including healthcare and FSI sector where they can avail the broadest compliance standards offered by the Microsoft cloud.
What percentage of Microsoft’s overall business in the Middle East goes through channel partners?
Microsoft is unique in that we define success through our partners. We succeed together. We are partner-centric, partner-led and pro-partner at our very foundation. Therefore, our approach has always been to empower our customers through our ever-growing partner ecosystem.
IDC estimates that partner opportunity will double to more than $2 billion by 2022, and for every dollar of Microsoft revenue, the partner ecosystem generates an addition of over $9. Globally Microsoft’s 95% of overall business goes through channel partners. In 2017, 65% of all software purchased in the UAE ran on Microsoft operating system, as did some 91% of the PCs and nearly 84% of servers purchased during that year. Channel partners, in 2017, bought roughly AED 10 billion, which includes hardware, software, services and distribution. During the same year, Microsoft ecosystem invested nearly AED 4 billion in training, research and development, product development and testing, sales and marketing.
Given the current business climate and the volatility in the regional channel, where will Microsoft urge its channel partners to focus?
We see vast opportunity for partners that are investing in the cloud. Hence, that’s where we urge our partners to focus on to drive cloud journeys of our customers. And our data centres are playing a big role in empowering our partners by providing enterprise-grade performance, security, privacy and broadest compliance standards. Close to 44% of IT professionals in the UAE are part of Microsoft’s ecosystem in some manner.
Another area of focus is managed services. Partner transformation is an ongoing journey where the development of IP – such as custom and packaged software, and an increased focus on project and recurring managed services, are leading to new value creation and growth opportunities in a quickly expanding digital market.
With innovations such as AI coming into the mainstream, we are also urging our partners to focus on advanced workloads so they can innovate, grow and differentiate in the market. This is why – we’re working with our partners every day to drive customer business value and adoption through AI by leveraging the intelligent cloud. And we’re continuously evolving our programs and resources to help partners build and grow their AI business with Microsoft.
We are also empowering our partners to publish their solutions (apps and services) in AppSource or Azure Marketplace. This enables them to optimise their listings to attract and engage customers and unlock a new global channel of profitability.
What will be Microsoft’s key focus in 2020 in so far as the regional channel is concerned?
Digital transformation is becoming a central strategy for modern business, but it requires new skills and investment, creating a massive opportunity for digitally savvy partners. Cloud and Microsoft ecosystem will create 55,000 jobs in the UAE by 2022. The ecosystem also supported more than 71,250 workers in 2017, which includes those who sell, service, deploy or work with Microsoft products. Now is a critical juncture for partners to increase their digital sophistication and transform their businesses to meet the new customer expectations effectively.
Therefore, partner skilling will remain a key priority for us. Differentiation is key. Partners must differentiate by building new capabilities. Customers look for specialists with in-depth skills, understanding of, and experience in their industry. Our customers are always urging Microsoft to help them connect with the best partners to support and guide them as they find, try, and buy the apps and services that best meet their needs while moving to the cloud.
Through our Training Center and ongoing workshops we are helping our partners access role-based technical and sales training and resources across the Microsoft stack. Such activities help them build new competencies and practice development guidance so they can envision and integrate new cloud offerings.
On the Microsoft Learn website, partners can take advantage of the Azure training journeys that are being developed for each learner role. Fundamentals and developer content are available now that fuel our technical skilling initiatives to support Microsoft partner programs.
What channel programmes and initiatives will Microsoft be rolling out in the Middle East in 2020, and how should your channel partners be preparing for the next year?
Most programs and incentives are tailored towards partners driving Cloud Consumption, naturally targeting partners offering managed services and IPs.
In terms of skilling, we’re working closely with our partners on new and advanced specialisations to help them build more capabilities and competencies. These include Windows Server and SQL Server Migration to Microsoft Azure, Linux and Open Source Databases Migration to Microsoft Azure, Data Warehouse Migration to Microsoft Azure, Modernisation of Web Applications in Microsoft Azure, and Kubernetes on Microsoft Azure.
What is the biggest challenge facing channel partners today?
One of the main challenges that channel partners face is maintaining margins. Margins continue to remain slim for transactional partners and till date, many partners yet stick to the old business model of reselling. This, according to us, doesn’t add value in the longer run. We are continually empowering partners to transform and focus on managed services and IP creation, which will enable them to create a new organisation structure and develop advanced skillsets. This will improve profitability and assist them to stay relevant in the market.
How is Microsoft addressing the skills challenge within its partner ecosystem and contributing to bridging the skills gap, especially now that disruptive technologies are advancing so rapidly?
Microsoft has long dedicated to investing in upskilling region’s IT talent. Microsoft Ignite- this tour is one such event focused on assembling developers and IT professionals from the partner ecosystem. This enables them to learn, explore and connect with the community and gain practical insights into the future of areas in technology such as cloud, data, the Internet of Things and artificial intelligence.
We are also working very closely with governments and private companies to help plug the skills gap. Our initiative, such as the AI Business School and Microsoft Cloud Society, has over 200K+ registered users across MEA and offers over a 900-courses which could help hone cloud skills and solve complex business challenges.
Has the move towards software-defined data centres eased the need for partners to invest in IT skills?
The launch of our Middle East cloud regions has opened several opportunities for partners to scale. This requires honing of adequate skillsets to be future-ready for jobs of tomorrow. We are working closely with our partners to provide them with necessary upskilling and reskilling and empowering them to digitally transform and drive tech adoption.
Are we still going to be talking security, cloud and IoT as disruptive technologies next year?
Disruptive technologies will remain key in 2020 and beyond. To maintain relevancy and profitability, partners are shifting their focus to high-value digital solutions in the cloud. Advances in big data/analytics have created new markets for emerging technologies like AI and machine learning, IoT, and blockchain.
New security and compliance requirements have created new opportunities as they have become table stakes for digital transformation. IDC predicts that the General Data Protection Regulation alone will create a $3.5 billion market opportunity. Moreover, securing digital assets have been gaining importance with the cybersecurity market in MEA expected to grow $12.54 billion by 2023.
We believe there is a massive opportunity for partners to grow in this space as Microsoft has been ahead of the curve to provide holistic offerings to our customers – all the way from security to productivity. And we look forward to working with our partners to drive their digital transformation journeys, empowering them to achieve more.