Channel technologies, CSPs

Microsoft CEO: Every Azure Cloud Customer Is Now An ISV

Microsoft CEO Satya Nadella
Satya Nadella

In the age of digital business, technology pundits claim every company is becoming a software company. Now, Microsoft CEO Satya Nadella is applying that thesis to cloud computing -- and the customers who run workloads on Microsoft Azure.

Roughly one-third of Azure's revenues come from classic ISVs -- independent software vendors, according to Nadella, who made the estimate during Microsoft's Q4 2016 earnings call this evening. Examples include client-server software developers that have rewritten their applications to run on Azure.

But ultimately, Nadella believes every Azure customer truly is an ISV. "Every customer who starts off consuming Azure is also turning what is their IP in most cases into an ISV solution, which ultimately will even participate in AppSource," says Nadella. "So at least the vision that we have is that every customer is a digital company that will have a digital IP component to it, and that we want to be able to partner with them in pretty unique ways."

AppSource is Microsoft's new third-party cloud application marketplace.

Can All Channel Partners Become Cloud ISVs?

Now, apply Nadella's statement to channel partners. Will all VARs, MSPs and CSPs become ISVs? Practically speaking, I don't believe so.

Sure, I believe the vast majority of channel partners will manage customer workloads on public clouds like Azure, Amazon Web Services and alternatives. But I suspect fewer than 5 percent of channel partners will become true ISVs with their own intellectual property (IP).

Still, Nadella is onto something with his statements about businesses going digital. Some MSPs are ahead of the curve, actually introducing managed DevOps services to help end-customers manage their intellectual property out on public clouds.

Long live the resulting ISVs and their cloud-hosted applications.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.