Microsoft’s Joe Macri on the most disruptive trends in the channel

Joe Macri is no stranger to the changing technology landscape. Throughout his 22 years – and counting – at Microsoft, the VP of commercial partners has not only lived through the past three CEOs, but has taken up various roles in many different parts of the business, and the world.

Macri started working for Microsoft in the UK back in 1996, establishing its SMB business, and working with channel and distribution partners. He then moved to Ireland to take up his next role as the general manager of the tech giant’s Irish Commercial Business.

For 10 years after that, Macri had international roles, initially marketing and operations in Western Europe, and after that, leading Microsoft’s public sector business for Europe, Middle East and Africa. 15 months ago he returned to the UK to lead the One Commercial Partner business.

With a focus on helping partners to navigate the latest trends, including artificial intelligence and cloud-based services, PCR caught up with the Microsoft stalwart to find out exactly how they plan on doing it…

You’ve experienced many different parts of the business by the sounds of it?

I have! The unifying thing is ‘partner’ actually. Although this is the first role that I have had leading a partner organisation, when I was working in public sector I was very aligned to our partner ecosystem, and SMB partners are the core of what we do.

I’ve worked in very different parts of Microsoft and in very different regions, and I’ve had the experience of all three CEOs, so I’ve lived through a very interesting time in the company’s history.

You’re focusing on AI and cloud with your partners right now. Why is that?

From enterprises right through to smaller businesses across public and private sectors, if I had to choose three trends, the first that I see driving a lot of things is that every industry is being disrupted. We always hear examples of AirBnB and Uber, but well beyond that, we’re seeing significant disruption in the retail sector, financial services and healthcare. There is disruption, and as a result, every business leader is focused on digital transformation.

We actually ran a survey just under a year ago and about 38% of those leaders believed that the current business model will not be in existence in five years.

Retail is probably one of the industries that’s seeing the most disruption. You hear reports of what’s happening on the high streets almost every day. There is a very strong belief that with the disruption comes the opportunity for transformation.

The next trend is the rise of artificial intelligence. Obviously there is a lot of press around this. IDC’s estimation is that by the end of 2018, three quarters of applications will use some form of artificial intelligence. Gartner has said that by the end of 2020 over 85% of enterprises will be using artificial intelligence. So clearly it’s happening.

While those two trends are opportunities for our partner ecosystem, the final trend is that we are seeing there’s a bit of a lag on growth around digital skills, specifically that we actually have a skills shortage.

I read with interest that the British Chambers of Commerce have talked about this being a “crisis at critical level”. The point they were making is that it is putting the future UK economy at risk.

What initiatives do you have in place to help partners utilise these trends?

With our partners, their business models are evolving. We have almost 22,000 partners in our MPN network (Microsoft Partner Network). 2,500 of them are gold or silver certified. There’s a huge ecosystem employing around 570,000 people. If I was to paint the picture of our partner ecosystem five years ago, I would have said there were all types of partners: fulfilment partners, professional services, hosters, and ISP.

In response to transformation and change, what we’re seeing is firstly, fulfilment services are highly consolidating, with more and more announcements, almost every day, that someone is buying or merging with someone else. So we see that trend happening.

We’re also seeing a real shift from professional services to cloud-based managed services – a shift away from large, complex IT projects to much smaller, agile outcome-based and cloud-driven projects. Another trend we’re seeing is intellectual property developing in scale, specifically ‘Software- as-a-Service’ type solutions.

To go back to your question of what Microsoft is doing, there are really three things that we are focused on right now. Our first job is to absolutely empower our partners to grow their business on our platform, serving our customers’ needs. If you think about that trend around cloud-based managed services, the work that we do around solution provider programmes to enable that for our partners is how we achieve this. That means working with our systems integrators, our hosters and our channel. We’re actually working with all of our partners on that strategy, and that is growing, in fact, it’s fuelling our growth.

That is now about 12-13% of our commercial business and it’s driving 20% of our growth. It’s the fastest part of our business.

Most importantly, for every £1 that Microsoft does, our partner ecosystem typically does £8.95. It’s a rough estimate but it shows how we provide economic growth for our partners. So, that’s our first strategy: to help our partners grow their business.

The second way is, that with every new innovation there is opportunity. Once in a while we have a technology platform shift. We’re in the midst of a major shift driven by AI and what we’re seeing is that we have the opportunity to create new channels to market.

So, we’re doing work with digital agencies. These are marketing agencies that have become digital, and this is a new channel for us. We’re doing work with our ISP partners developing AI solutions so there’s some really exciting stuff in that area.

The third thing we’re doing is focusing on the transformation ecosystem, and how we help our partners transform themselves. It’s one thing to create new opportunities, another to create new channels, but how do we help the current partner ecosystem transform? So, we’ve got a number of skills around engagement and helping them modernise their business models.

How are the digital agencies you’re working with helping brands?

There are almost 25,000 marketing agencies in the UK, it’s a very large ecosystem in its own right. They have undergone their own digital transformation. We estimate that about 15,000 of those have become digital agencies rather than just marketing agencies. And the vast majority of them have done provisioning of Infrastructure-as-a-Service, websites, hosting and basic services for their clients.

With the advent of AI, what we’re seeing is how they really help their customers modernise brands. Microsoft has signed a partnership with a company called Wirehive, who work with a lot of digital agencies and already, together we’ve recruited 200 new agencies to our platform – and we’ve got more coming. It’s something we’ve been investing in quite successfully.

In terms of how they do what they do, I’ll give you a couple of examples. The first one I like a lot. I’m Australian and I love Vegemite. A lot of people either love or hate Marmite in the UK. Our partner AnalogFolk worked with the Marmite brand to create the ‘TasteFace’ app which uses AI. As soon as you taste Marmite, it analyses your instantaneous reaction to tell you whether you’re a lover or a hater. It’s just been a wonderful consumer engagement strategy for Marmite. For the record, I’m a 96% Marmite lover.

So that’s one example of how agencies are using AI to improve branding spirit. Another is fan engagement. An agency called Greenwood Campbell worked with Bournemouth Football Club to develop a fan-engagement chatbot to really engage with their fans in real-time during the game as well as in-between games.

It’s interesting to hear the variety of applications for AI, as many people think it’s just about scary talking robots…

You’re absolutely right. There is a perception that this is not a good thing. Our focus is on how AI can augment and empower the worker. An example of this is our partner, Thoughtonomy, which has worked with the East Suffolk and North Essex NHS trust. They have developed a solution using virtual workers to compliment the care team, to improve patient experience and boost employee satisfaction.

A specific example of what they’re doing with AI is that they are using that technology to cut the time it takes to process a GP referral.

It currently takes about 15-20 minutes. Using the virtual workers is cuts down to just five minutes. There’s also associated cost savings, which is important for the NHS, but what’s really important is that it frees up valuable time for the care worker to spend time with their patients. That’s a great example of how AI can do some good.

Do you think the eruption of AI is being affected by the skills shortage?

Absolutely. I think there’s a link between this and the type of skills needed. At Microsoft we have a focus on apprenticeships and we have a pledge with our partners to have 30,000 apprenticeships in three years. We’re about 18 months into that and we’ve already had 8,000, so we’re well on our way to get to that number.

At the other end of the spectrum we’re helping those who previously worked in the Armed Forces to re-skill and get into other parts of employment. We also focus on not only building a career and people changing careers, but on girls in technology.

We have a global initiative with DigiGirlz, which gives girls the opportunity to engage in STEM. It’s not just about the skill, it’s about the diverse perspectives people can bring to that skill.

We’re actually doing some exciting work around diversity and getting people skilled and into those gaps. We’re doing a lot of work around people with disabilities. We’ve got a vision-to-language technology called Seeing AI. It’s a wonderful app that helps people who are visually impaired have better interactions.

Essentially, getting a more inclusive approach is important. Something that’s important to us as a company is making sure we, as well as our partners, use AI in an ethical way.

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