Uncertainty in the Microsoft Dynamics channel's economic outlook

Microsoft partner executives who have been focused on their immediate challenges in recent years would be well served to use the start of Microsoft's FY23 to turn their attention to longer term strategies for maintaining profitability in an economic landscape full of risks.   Our guests, George Brown and Dana Willmer of Partner Economics, have been sharing their latest findings on the micro- and macroeconomic conditions in the Microsoft channel, and for Dynamics-focused services firms, the implications will be huge over the next few years. They recently wrote an article about their new thinking and join us to discuss these topics in more detail.   The factors that drive profitability are shifting rapidly, Brown and Willmer tell us, and partners will need to make difficult choices to adapt. Some of the issues that they discuss include the ongoing resource shortage, the impact of marketplaces on software sales, dropping utilization rates, and valuations.   Partners are not doomed, they say, but in a few years many of the most popular business models in the channel may look nothing like today's typical Dynamics VAR.   Show Notes: 4:00 - Understanding trends in the fundamentals of Microsoft partners' financial performance 6:00 - 3 paths to improved profitability today - monetization of IP, broad cloud focus, services execution 9:00 - How partner executives react to these challenges 12:15 - The resource and staffing challenges facing partners 18:30 - Why utilization has dropped for partners and what it means for profitability 21:15 - Why rates need to go up now and on a regular basis 22:30 - Why marketplaces like Microsoft AppSource matter to the partner business model 27:30 - How does Microsoft's success relate to the partner channel's struggles? 30:30 - Partner responses and how some are adapting their businesses today 34:30 - Implications of market forces on valuations and M&A deal-making