Satya Nadella Has Microsoft In The AI Driver’s Seat

Microsoft Chairman and CEO Satya Nadella, CRN’s No. 1 Most Influential Executive, is earning accolades from partners as he keeps AI at the forefront of the company’s mission and steers investments and innovation around Copilot, GenAI and more.

When World Wide Technology’s Jim Kavanaugh attended Microsoft’s high-profile CEO Summit this spring, one major thing stood out to him: Microsoft Chairman and CEO Satya Nadella’s “absolutely brilliant and unique” ability to be both a technology innovator and a sales leader in the AI era.

“Sometimes you have people that are visionary, but they are only visionary and don’t have the ability to execute,” said Kavanaugh, CEO of WWT, the $20 billion St. Louis-based global solution provider powerhouse. “Then sometimes you have people that are really good at executing, but they’re not necessarily great at the vision. Satya can do both.”

Nadella can paint the big picture and get into the details when it comes to execution, Kavanaugh said.

“That’s difficult because sometimes these things look very easy, so you paint this vision, but there are a lot of things going on behind the scenes that require incredible grit, determination, discipline and rigor. He has all those qualities,” Kavanaugh said.

With hundreds of thousands of Microsoft partners behind him to lead his AI revolution, Nadella is the No. 1 Most Influential Executive on CRN’s 2024 Top 100 Executives list.

From Nadella revving Microsoft’s AI innovation engine to new heights to his decision to invest billions into AI superstar OpenAI, his vision and ability to successfully execute on that vision make him “stand out of from the crowd” of IT leaders fighting for AI market share, Kavanaugh said.

Kavanaugh highlighted Microsoft’s momentum around Copilot innovation, built-in generative AI capabilities in its applications, and its Azure cloud infrastructure hosting many of the world’s leading AI products as just a few reasons why he expects the company will continue to be an AI market leader for the long run.

“Microsoft has both the platform—their software is embedded in just about every enterprise when you talk about these Copilot capabilities—and they also have the cloud. So when you’re writing prompts to ChatGPT, it’s being hosted in Azure,” said Kavanaugh.

“It’s an absolutely visionary company with a visionary leader that isn’t just visionary but does an amazing job of execution. … I have an incredible respect for him.”

Channel Sees Benefits From Nadella’s Leadership

In the 10 years since he stepped into the CEO role at Redmond, Wash.-based Microsoft, Nadella has shown a clarity and focus “on areas that have long-term impact on Microsoft’s business with enterprise customers” that interact with Microsoft channel partners, said Vineet Arora, CTO of Santa Clara, Calif.-based solution provider WinWire, No. 255 on CRN’s 2024 Solution Provider 500 and Microsoft’s 2024 Azure Partner of the Year in the category of Modernizing Applications.

“He has narrowed down the focus to AI being the key platform and making sure it is infused into all products and it is right in the forefront,” Arora said, adding that “partnering with OpenAI was a masterstroke that many people didn’t see coming.”

But Nadella is also wisely not giving OpenAI all its chips, investing in organic AI development, cognitive services and small language models, Arora said.

“That is a very smart move as a leader to say, ‘We’ll partner. But we will also produce,’” he said. “It’s the entire end-to-end spectrum that they will want to own the platform and then help [solution providers] like us.”

Nadella’s devotion to AI reminds Arora of Microsoft co-founder and former CEO Bill Gates’ mission statement to put “a computer on every desk and in every home.”

Now Microsoft’s mission is “making sure that they can make people productive by having AI in everything,” Arora said.

Mark Pierce, Microsoft Group general manager at Atlanta-based ivision, an honoree on CRN’s 2024 MSP 500, said Nadella’s push into the cloud is one example of his ability to take risks and see opportunities, skills also exemplified by his decision to bet on AI as the next big technological evolution.

“It’s a gutsy move, but it’s starting to really show signs of paying off as we see more and more customers now starting to adopt the technology, where nine months ago or a year ago there was more kicking the tires and not knowing what to do,” Pierce told CRN.

“But just like the cloud, it’s really here, and it’s here to stay.” Rachael Narel, employee engagement and productivity practice lead at Mason, Ohio-based Microsoft partner Interlink Cloud Advisors, credits Nadella for leading “one of the most amazing transformations of a tech company in recent years.”

“He’s really transformed Microsoft into a culture of growth, a learning mindset and innovation and collaboration, and I would say that collaboration is definitely not only inside Microsoft but—to the point on Copilot and AI—outside Microsoft,” Narel said.

Nadella’s move to partner with OpenAI instead of building generative AI capabilities from scratch accelerated Microsoft’s ability to create Copilot and blend GenAI into its Office products, she said.

“His work not only created incredible opportunities for Microsoft, but also for companies like Interlink,” she said. “And it’s been super exciting to experience the positive changes that we’re able to help create in organizations with Microsoft’s leading-edge technology that was developed under his leadership. Again, it all comes from the top, and it all derives from culture. He definitely made a huge shift.”

Microsoft Is ‘Partner-Led’

Microsoft has a longstanding, formidable partner ecosystem. The 400,000-plus-strong Microsoft AI Cloud Partner Program traces back to the tech giant’s 1992 Certified Solution Provider Program and is full of solution providers ready and equipped to bring AI to the masses and to make sure customer satisfaction keeps the AI hype bubble from popping.

“Microsoft has always been a partner-led company, and we count on our partners to help our mutual customers adapt and thrive in this age of AI,” Nadella said in a statement to CRN for this story. “Over the past year, we have delivered fundamentally new platforms, Copilot, Copilot Stack and now Copilot+ PCs, and it’s our partners that are ensuring the benefits of these technologies and platforms reach every country, industry, company and individual.”

Nadella is Microsoft’s third CEO after Gates and Steve Ballmer. He joined the company in 1992 and ascended the ranks, leading Microsoft Business Solutions research and development for about five years before becoming corporate vice president of the division.

He has made partnerships a cornerstone of his strategy, including one that helped Microsoft leap ahead in the AI race through a reportedly $13 billion-plus investment into ChatGPT maker OpenAI that locked up Azure as the upstart’s exclusive cloud provider.

That partner focus extends to the channel as well, said Nicole Dezen, Microsoft chief partner officer and corporate vice president of global partner solutions.

“Satya’s leadership is so focused on a partner-first approach, and this is really instrumental for us as we’re navigating the AI landscape,” Dezen told CRN. “It’s the mindset that pervades our company. And this is what fuels our commitment to partners as well as our investments in the ecosystem.”

In July, Microsoft showed that the revenue multiplier for its partners continues to rise. On average, partners see $6.64 in revenue for every $1 of Microsoft revenue. Services-led partners see the multiple rise to $8.45. And software-led partners, ISVs, have a $10.93 multiple.

Back in 2022, the multiple was $7.63 for services-led partners and $10.11 for ISVs, according to Microsoft.

Microsoft revealed in July that partners with at least half of their Microsoft-related revenue coming from AI have a gross margin of 43 percent across the business compared with the Microsoft partner average of 34 percent.

And Microsoft’s numbers point to optimism among these AI solution providers, with partners expecting overall revenue growth this year of 64 percent. The average Microsoft partner expects growth of 26 percent, according to the vendor.

“This AI opportunity is for partners of every business model, every size, in every geography and every stage of maturity,” Dezen said. “And we’re seeing that across the board.”

The Push For Copilot

It might sound cheesy, but you can’t spell “Microsoft partner” without AI, and you can’t spell “Microsoft cloud partner” without “Copilot,” Microsoft’s series of virtual assistants that serve as the AI interface.

Copilot empowerment—the ability for partners to deliver first-party Copilots and the Copilot stack—is one of the five key priorities for Microsoft this year, Dezen said. AI design wins—where partners work with customers on highly curated and customized AI transformation needs—is another.

“Every [Microsoft] customer I speak with is asking about Microsoft 365 Copilot,” said Dennis Perpetua, vice president and global CTO for digital workplace services and a distinguished engineer at New York-based Kyndryl. “It’s like breathing at this point.”

A case study Microsoft published in March on Kyndryl’s AI use revealed that the company—No. 9 on CRN’s 2024 Solution Provider 500—leveraged Copilot Studio to build a Microsoft Teams application for triggering workflows involving customer ticketing systems.

Kyndryl deployed the virtual agent internally first to tens of thousands of employees before opening it up to customers. The solution provider had 47,000 unique visitors in the app’s first month. Since deployment, it’s received 225,000 engagements. The company saved $1.3 million sunsetting the legacy system.

Kyndryl’s digital workplace services practice has also piloted GitHub Copilot, Microsoft’s paired programmer AI tool. It has seen up to 70 percent efficiency improvement when writing new code and 30 percent efficiency improvement when maintaining existing code, and the tool has worked with 12 different coding languages.

For customers, Kyndryl has worked on identifying what Perpetua calls “soft ROI” so that they can see productivity through improved quality of work if not necessarily money saved at the start.

Kyndryl continues to spend a lot of time with customers on information architecture, enabling the data they want Copilot to use and securing the data they want Copilot to ignore. Customers have been using Copilot for summarizing meetings, summarizing support tickets, analyzing requests for proposal opportunities and employee assessments, and other use cases that save hours of time, Perpetua said.

Jim Little, global Microsoft alliance lead for London-based EY, told CRN that the firm has driven significant top-line growth and cost savings with Microsoft AI.

Compared with the first year of Copilot, EY—which received 2024 Microsoft Partner of the Year awards in areas including Global Advisory and Intelligent Automation—spends less time on technical implementation with customers and more time on process and change management, he said. EY has started to create standardized, repeatable AI offerings in areas such as supply chain, tax and financial services. It also has created accelerators that build upon common AI actions—summarization, for example—and personalizes it to certain departments, such as sales.

Examples of AI projects with customers include a manufacturer using traditional AI and Copilot to manage power production forecasting and changes as well as an agriculture business using Copilot for soil management, Little said.

“Every day we find new and unique use cases of how we take advantage of the technology and move faster and create more insight,” he said.

WinWire’s Arora told CRN that the earliest AI adopters among the company's customers have moved on from assessments to testing applications.

In one example, WinWire is working with a health-care provider to build a scheduling app for MRI appointments that front-desk workers use with a chat-based interface. The app evaluates up to 72 parameters—including a patient’s history of missing appointments—

to reduce the time taken to schedule a patient from around eight minutes to three, plus reducing the odds a patient misses the MRI appointment. “We are talking about millions of dollars of saving time,” Arora said.

Arora sees Copilot becoming as common as the “save as” button. “AI is becoming invisible,” he said. “All AI capabilities and technologies are becoming so much an integral part of it, some people won’t even care about it, some people won't even know about it.”

Other AI vendors “are following where Microsoft is leading,” he said.

Several other solution providers told CRN about how Microsoft resources are helping them to make AI a reality for their customers.

Kathy Durfee, CEO of Lakewood Ranch, Fla.-based Microsoft partner TechHouse, said that she has transformed her business with help from the Microsoft ISV Success program—made generally available in July 2023—and the GTM Momentum accelerator.

Interlink’s Narel, meanwhile, said the company running 20 Microsoft-funded virtual Copilot workshops for customers as part of the vendor’s Jumpstart program, with several more scheduled over the next few months.

Meanwhile, ivision’s Pierce is using Microsoft Innovation Hubs (formerly known as Microsoft Technology Centers) to dazzle customers on AI while benefiting from Microsoft’s deepening partnerships with distributors including TD Synnex.

From Solution Provider To ISV

The GTM Momentum accelerator TechHouse participated in launched in February for members of the Black Channel Partner Alliance, International Association of Microsoft Channel Partners and Women in Cloud partner-led associations. Durfee is a Women in Cloud member.

TechHouse has about 10 full-time employees and works with a diverse range of clients, from startups to established small and midsize businesses across various industries.

Participation in ISV Success and GTM Momentum has helped Durfee transform her business, merging the services-led and product-led Microsoft partner worlds by working on offerings for the Microsoft marketplace. The Microsoft programs have also connected her with partner peers for advice.

“We are committed to evolving a part of our solution provider business into an ISV,” Durfee said. “We have ambitious goals for the marketplace. We’re really transforming the way we do business. Already, we’ve shifted more than half of our security and data services to a subscription model.”

So far, TechHouse’s marketplace offerings include two products under the “Empower My Data” brand—one is an AI readiness report aimed at SMBs, the other is a prescription drug data collection reporting service for health-care organizations. TechHouse also has the “Safety Plus” Microsoft 365 tenant security offering aimed at nonprofits.

Customers also have shown an understanding of frequent and rapid changes in the Microsoft AI portfolio, Durfee said. “Our clients get it: It’s all about evolving, getting better step by step in tune with the changes happening around us.”

Microsoft’s Dezen said that the tech giant continues “to make really big bets on [the company’s] marketplace.” Microsoft’s marketplace can reduce the time for on-boarding new vendors by 75 percent, reduce procurement engagement effort by 50 percent and save 30 percent of time for engagement transactional elements.

Educating Customers On AI

Interlink’s Narel said that she expects some of the company’s earliest AI adopter customers to start rolling out AI and Copilot productions during the summer.

Each of her Microsoft-funded workshops gets about 15 attendees, representing a cross-section of customer constituents, including CEOs, IT, human resources and sales, showing the wide potential of Copilot and AI. “Seeing that the executives are engaged on this makes the end users feel more engaged in this as well,” she said.

She has also worked with customers on centers of excellence and communities of practice for long-term Copilot and AI use. And Microsoft has provided funds to help customers ramp up Copilot use, not to mention tools for readiness assessments and showing ROI.

Interlink is fostering continual education and support engagements with customers as they move forward in their AI adoption. Sometimes Narel’s team will be booked for multiple weeks until she can fit a new customer in for a session.

The company has been successful in persuading customers to upgrade Microsoft licenses for improved governance and sensitivity labeling, she said. “I’ve had several new professional services engagements with net-new customers coming in because of our Jumpstart program partnership and because of the offerings that we have,” she said.

Copilot updates have come so frequently that Interlink has been holding webinars every three weeks about what’s new and even produced monthly slide decks of new features and how to use them, she said.

Narel even owes her job to Copilot. After working with Interlink part time for about a year, the solution provider hired her on full time in May 2023 specifically to work on Copilot projects. Before that, Narel was a university assistant professor of master’s level management and organizational behavior courses.

Interlink has been offering multiple types of end-user workshops and technical sessions. It also offers an SMB-focused version of this program, she said. Copilot has been easy to demonstrate for customers because of how often Narel herself uses the tool for catching up on emails, summarizing long Microsoft Teams conversations, generating PowerPoint slideshows from prompts and providing notes from video meetings.

“I can show them a day in my life and how it is saving me time,” she said. “That’s a game-changer for us also working with customers—being able to show the real-world use cases, but a lived-out use case and not just, ‘Here is stuff we heard from other customers.’”

Getting In Early

An example of ivision using Microsoft’s Innovation Hubs includes the “Copilot Legal Summit” held in May, Pierce said.

Members of the legal industry—one of ivision’s main verticals—attended learning demos for Copilot adoption, learned about Microsoft’s road map for releasing Copilot advancements, and discussed uses of AI in the legal sphere not just with Microsoft but smaller ISVs such as LawToolBox, he said.

So far, ivision has invested heavily in partnering with customers for Copilot workshops, planning and pilots with the goal of getting on the ground floor of their AI ascension.

“We see a lot of opportunity for us to help our clients not only just adopt the journey of artificial intelligence but also as they grow,” Pierce said.

“It’s about the stickiness,” he added. “If you’re in with the client early on their AI journey … you’ll be there with them every step of the way. … It’s an investment, but it’s a growth strategy, too. I think of it as: What can you do to have this as a managed service, recurring revenue or opportunity? Just like when people went to the cloud, it’s not just ‘be waiting for the next upgrade.’”

Pierce characterized his customers’ AI projects as in the beta stage of development. “People are deploying it very slowly and methodically,” he said. “It gives us a little bit of time to embed more lessons learned and artifacts for our customers. But it’s going to be different in four to six months.”

As for Nadella, in a telling reveal about how services-led partners are essential to not just Microsoft’s go-to-market, but the democratization of technology for workplaces, he told analysts on the company’s April earnings call that systems integrators now adopting tools for fine-tuning AI models is a sign of the AI market’s maturity.

“All of these tools are now available, the sophistication of how people can deploy these models across various business processes where there is data and where there is tuning of these models is also getting more widespread, even at systems integrators and other developers [that] are there to help enterprises,” Nadella said. “All that is maturing. So we feel good.”

Mark Haranas contributed to this story.