Microsoft partners: This is your Copilot speaking

The AI opportunity could be worth $6.5 billion for partners alone

Microsoft CEO Satya Nadella has called the spread of generative AI a ‘collective mission’ for the company and its partners, a mission that in part will be fuelled by Microsoft 365 Copilot. Here’s how and where a number of partners are placing their bets.

Vineet Arora's belief in the promise of Microsoft Copilot and the vendor's other generative artificial intelligence technology runs so deep he's betting his job on it.

The CTO of WinWire Technologies - a Santa Clara, Calif.-based 2023 Microsoft Partner of the Year finalist and No. 233 on our sister site CRN's 2023 Solution Provider 500 - has transitioned his role to focus on technology from Microsoft and Microsoft-backed OpenAI that can quickly create content, analyses and summaries based on user prompts.

Arora heads a small team of WinWire employees - data scientists, data architects and data engineers found through an internal hackathon earlier in the year - focused on partnering with Microsoft to provide AI technology to customers. WinWire has more than 1,000 employees worldwide.

Since April, he's conducted a seven-city road show with Microsoft technologists to demonstrate what generative AI can do in health care and has done more than 24 envisioning sessions with customers around the technology. WinWire is already piloting generative AI solutions for healthcare and life sciences customers - all of this before some of Microsoft's most impressive generative AI tools become generally available.

And he even publishes two to three articles a day to a Teams group chat called "All Things OpenAI."

"The scale of the investment that we have planned is [incomparable] to anything else that we have done in the last 16 years," Arora told CRN. "My entire time is going into this. … The opportunity size, the technology, the speed at which it is evolving requires 100% - 110% - dedication from our side. So the scale and the level of focus has been different from anything else that we've done in the past."

Tech vendors and solution providers alike are fueling a generative AI gold rush. And Redmond, Wash.-based Microsoft is certainly considered a leader in generative AI, thanks to its reported $13 billion investment in OpenAI - the startup that on 30th November publicly launched the ChatGPT text-generating software - and Microsoft's own March introduction of Microsoft 365 Copilot, which will bring generative AI to Teams, Outlook, Word, Excel and other popular productivity applications.

At the vendor's Inspire conference held online last month, Microsoft Chairman and CEO Satya Nadella called next-generation AI a partner ecosystem opportunity that could span $4 trillion to $6.5 trillion. The most forward-looking of its 400,000-member partner ecosystem have now put their best and brightest employees to work developing generative AI solutions.

‘Unrivaled' partner distribution

Solution providers are key to scaling Microsoft's generative AI for businesses, according to partners themselves as well as industry observers.

Dan Ives, managing director of equity research at Los Angeles-based financial services firm Wedbush Securities, told CRN that "partners hold the key to spreading the gospel and ultimately getting pen on paper to deals" involving generative AI.

"Getting partners bought in on the ChatGPT/AI strategy on cloud is integral to what I view as just a golden opportunity for Nadella and team over the coming years," Ives said. "Microsoft's partner distribution is unrivaled. In other words, I view that as a huge asset for them in this arms race that's going on."

Ives - who forecasts an upcoming $800 billion AI spending wave over the next decade - sees generative AI as more than just hype. In research notes for Wedbush, he estimates that AI will comprise up to 10% of overall IT budgets in 2024, compared with about 1% in 2023.

And he sees generative AI giving Microsoft and its ecosystem greater leadership in cloud computing. By most measures it sits in the No. 2 position behind Amazon Web Services and ahead of Google Cloud.

Ives expects Microsoft's cloud total addressable market to expand by up to 40% over the next decade thanks to generative AI.

"I would compare it to Nadella's vision when he took over as CEO and morphed Microsoft through Azure into a cloud behemoth," he said. "I would compare it to that in terms of this transformation."

Microsoft invests in partners

At Inspire 2023, multiple Microsoft executives addressed the need for solution providers to implement Copilot and other generative AI tools.

Nadella called the spread of generative AI "a collective mission" for Microsoft and its partners.

"There's no question the opportunity is tremendous," Nadella said during his keynote address. "And our partner ecosystem, the uniqueness of what you all represent, really is what gets me most excited. It's a map of the world. We can reach every community in every country in every sector of the economy, both public and private. That's what's exciting.

"In the last six months, as I've been going to different parts of the world, talking to lots of you, what's unbelievable is the rate of diffusion of this technology. Thanks to all your capability, [that] is what's most exciting about this particular revolution and platform shift, and that's what really grounds us in our mission to empower every person and every organisation on the planet to achieve more."

Nicole Dezen, Microsoft's chief partner officer and corporate vice president of the Global Partner Solutions group, told CRN after Inspire that she hopes solution providers see Microsoft's commitment to not only AI, but to partner success and enablement. "Microsoft only wins when partners and customers succeed," Dezen said. "It's core to our mission. And so we were very intentional in making so many big investments this year in all things partner - everything from the Programme itself, all the way through to specialisations and designations to really shore up training capability."

Microsoft investments and incentives "are meaningful dollars to help partners go deliver fast time-to-value for customers because that's where the truth is. That is the measure of success. When customers are realising value, then we're all successful," she said. More than 9,400 customers use Azure OpenAI Service, making it the fastest-growing Azure service in the technology's history, according to Microsoft. And 9,100 partners transact on Azure AI.

More than 2,300 of those partners transact on Azure OpenAI, according to Microsoft. Partners have also activated thousands of customers on core Azure migration and modernisation scenarios. Azure OpenAI Service, GitHub Copilot and Sales Copilot are examples of currently available Microsoft generative AI offerings. Other generative AI offerings, such as the more broad Microsoft 365 Copilot, do not have launch dates yet. However, Microsoft did announce at Inspire that the M365 Copilot will cost $30 per user, per month, for buyers of Microsoft 365 E3, E5, Business Standard and Business Premium licenses.

Power Automate Process Mining - an AI-infused Microsoft offering for process improvement through automation and low-code apps - is scheduled for general availability on 1st August. Copilot in SharePoint is expected to roll out in November.

And Microsoft already provides a wide variety of resources for channel partners with AI practices, such as training, education and an assortment of Programmes and initiatives. These include the Data and AI Industry Partner Activation Kit, which equips partners with reference architectures, application demonstrations and solution accelerators.

The cloud service provider also has Microsoft- Azure specialisations to validate partner abilities and an Azure Analytics and AI Accelerate xme to provide support to partners across all sales stages.

More than 200 partners already met the prerequisites for the Build and Modernise AI Apps with Microsoft Azure specialisation at launch, according to the vendor.

Some of the biggest partner news out of Inspire included the rechristening of the Microsoft Cloud Partner Programme - unveiled in October - as the Microsoft AI Cloud Partner Programme, in a reflection of how important AI technology is for Microsoft and its partners' futures.

The vendor also tripled its investment in Azure Migrate and Modernise - a renamed Azure Migration and Modernisation Programme - which provides assessments, more partner incentives and support for additional workloads.

Separately, Microsoft said it has invested $100 million in a new Azure Innovate offering that aims to help partners and customers infuse AI into applications, experiences, advanced analytics and custom cloud-native app building,

And Microsoft unveiled new "Era of AI" marketing campaigns in a box, and an AI transformation playbook with guidance on skilling, innovating, marketing and selling.

While generative AI is in its earliest days, some Microsoft solution providers are already delivering generative AI solutions. That work ranges from WinWire AI journey maps to EY's payroll chatbot and from PricewaterhouseCoopers saving employees 80% of work time to Core BTS launching an AI readiness assessment.

WinWire's journey maps

At WinWire, Arora works with customers - health care, manufacturing and retail are some of its biggest verticals - on AI journey maps, maps that Arora considers to be WinWire's intellectual property.

"You're not going to jump into building full-fledged production-ready solutions off the bat," he said. "There is a step-by-step approach that you need to take."

He asks customer CIOs and CTOs what their vision is and their familiarity with generative AI. He'll take about 30 minutes to "demystify" generative AI and then identifies one to three use cases for a proof of concept or pilot. WinWire then works with customers on budgeting for the work.

"We are able to supercharge the adoption of that technology into their areas," he said. "They are Microsoft's biggest customers, some of them. And as Microsoft starts bringing those technologies [to market], we are there to help them adopt them in the right manner. And that's a promise that I provide to them."

Tony Guidi, WinWire's senior vice president of alliances, told CRN that the solution provider's years of experience in modernising customer data estates "allowed us to leapfrog a lot of other Microsoft partners."

"For years, we've been doing modern data, app innovation, all the things that this technology is going to help even further accelerate," Guidi said. "So we were in a unique position where we could take our 16 years of experience and very quickly pivot to focus in this space and … build out the significant team with some of our best people to just begin to develop use cases by industry, [custom] Copilots, proofs of concept, accelerator approaches in order for customers to make this technology real."

Core BTS' readiness assessments

Indianapolis-based Core BTS, a Microsoft partner and No. 168 on CRN's 2023 Solution Provider 500, has a responsible AI readiness assessment available through the Azure Marketplace for customers to identify high-value, low-risk opportunities to use generative AI on business functions within the organisation.

Finding a document within a business group, generating relevant data content from the document and using generative AI to model the data for company stakeholders to access is one example, Perry Thompson, managing director of technology strategy at Core BTS, told CRN.

The solution provider's 400-plus Microsoft certified professionals are also working on AI at the networking layer to help find anomalies and behaviour patterns that run afoul of policies.

Core BTS employees have looked at customers' internal data, the value that data provides business functions and the data's classification and taxonomy. The solution provider is also working on guardrails to protect sensitive information - keeping healthcare customers compliant with federal privacy laws, for example, Thompson said.

"We're starting right off the bat because we recognise that this is something that is really exploding in the market," he said. "But when you start to get into the actual processing of information and trying to give controls and automation, that's the piece that you have to be very sensitive about. And you have to work with your leaders in your organisation to set that vision first and then be able to define strategic goals that actually align to their business and their values."

Customers seeking generative AI are really seeking more connections across business units to share data quickly, make decisions faster and get closer to end customers, he said.

"This is why we have to take a step back and be able to try to set that strategy, identify those key areas, to define some mitigation aspects of the actual highlighted area - if it exists - go into the pilot mode for them to be able to look at it at a small scale. And then we turn back around and plan for the scaling up of the entire solution and make sure that we have a continuous feedback process that actually continuously improves," he said.

EY's payroll chatbot

Global systems integrator and Microsoft solution provider EY - whose accolades include winning multiple 2023 Partner of the Year awards - is in the piloting phase for an Intelligent Payroll Chatbot for a handful of customers, not to mention conducting proofs of concept in other areas of generative AI for EY and with clients.

Jim Little, a partner principal and global Microsoft alliance lead and Americas technology strategy lead at EY, told CRN that the company is piloting the chatbot with several customers before going industrial scale with the chatbot.

For now, the chatbot knows 27 languages and takes about 15 seconds to answer payroll questions compared with the baseline of 2.2 days for client contact centers.

The accuracy rate for proofs of concept and client pilots has increased to 94% from a baseline of 67% for human agents. The chatbot also nearly doubled first-resolution percentages for questions from human agents - from 47% to 80%.

EY will continue to train the chatbot through prompt engineering and cleansing the data that powers it to improve accuracy.

"It's been a tremendous success," Little said. "We saw a real opportunity to disrupt. And we've done it. … It's going to give us a great market advantage and learning that we can continue to leverage."

PwC's proofs of concept

Like WinWire, PwC - a global systems integrator, Microsoft solution provider and 2023 Microsoft Partner of The Year - has joined Microsoft on the event trail, educating hundreds of financial services, health-care, energy and utilities customers on generative AI.

"We're involved in client delivery work across almost every sector, and certainly proposals in every single sector," Bret Greenstein, PwC U.S. data and analytics partner, told CRN. "[There is] just a huge volume of discussions to help people think this through. It's one of the fastest sales cycles I've ever seen, but at the same time it's highly transformative. So the work is actually really hard. But [customers get interested very quickly] because it's not as if anyone has to be convinced that generative AI matters or is going to be disruptive to business."

Some of the early generative AI use cases include offloading work from contact centre agents, having AI collect the customer's problem, answer the customer if the problem is lower level and automate service ticket processing. PwC has seen reductions of work for employees of up to 80%.

"These are often workflows where there are inbound communications coming in," he said. "And previously, there was not a good way to vet inbound service tickets, service requests, insurance claims, requests - whatever comes in always comes in as email, text or some workflow. And it was so hard to automate that because you can't do that with just a bunch of clicks or code. But generative AI does a nice job of reading, so to speak, incoming unstructured text and then characterising high, middle, low risk and then even resolving some of the issues automatically.

"So we had some processes where we're just seeing an 80% drop in what goes to the actual person, which allows the person to focus on the harder cases and the easy ones or the incomplete requests get handled automatically. … Even the communication back to people with natural language is a really cool process that speeds up the experience, reduces the labour, allows people to scale."

In mergers and acquisitions, generative AI has helped leverage and analyse unstructured data used in complex due diligence, Greenstein said. In sales, it has helped internal sellers support customer needs and questions. In software development, generative AI has helped with creation, testing, evaluation, documentation and code optimisation - improving efficiency by as much as 50%. In human resources, generative AI has helped with job postings, performance management and other tasks. And in IT, it has saved workers from answering low-level questions.

"It also helps end users who actually just don't know what they want, but they know how to say it," he said. "And so they don't know how to run SQL, but they do know how to ask for things."

When introducing generative AI to a customer, PwC looks for areas of constraint, he said.

"There's a financial services company I've been talking to, and they're just excited because there are certain parts of their business that they're about to grow drastically as interest rates change," he said. "And they want to scale up and go faster without hiring a million people. And they couldn't find them if they wanted to. So this ability for a midsize company to amplify their business or to scale their workforce is pretty powerful."

The key for customers is that generative AI won't solve everything, he said. "If you just let everyone build a chatbot, you're just going to get a lot of noise and not a lot of high quality," he said. "But if you create a solution that trains people how to build high-quality customer service, you can adapt it to HR or to other things."

A generative AI solution brings in just about every technology discipline at PwC, he said. These include the cloud, infrastructure, security, applications, data, business functional operations such as finance and IT, and then sector-based use cases as well.

"This is the greatest unifier for us because we all have to come together for clients to help them," he said.

Copilot conversations open new doors

Mike Wilson, CTO and partner at Mason, Ohio-based Microsoft partner Interlink Cloud Advisors - a member of CRN's 2023 Managed Service Provider 500 - told CRN that his company has used the hype around Microsoft 365 Copilot to educate customers on Microsoft's other generative AI wares.

Azure OpenAI, Azure Cognitive Services, Syntex and Power Platform's form recognition capabilities are some of those wares. Wilson and his customers have even talked about how individual job roles may change with generative AI.

"There are a lot of other AI technologies that exist," he said. "So there's a possibility here when we're looking at readiness around things like Copilot to also start looking across their business. … We can go through and do that business consulting, look role by role in your organisation, identify AI use cases."

An eventual conversation with customers is how MSPs that adopt generative AI may even need to change billing because of the increase to productivity, he said.

"Do I bill an hour? Do I bill five? Do I bill one hour at five times the rate? We're going to have to navigate through that stuff - both for me as a professional services firm and I think for a lot of organisations," he said.

"If all of the sudden your employees are more productive, do they work less? Do they work the same? Do they demand more money? How much does the organisation give credit for providing the AI tools versus what the employee gets for being more productive and using them? We're going to have to navigate those conversations because there is going to be a lot of change as people's job roles adapt. I don't see it replacing a lot of jobs, but I do think it ultimately changes many of them."

Phillip Walker, CEO of Manhattan Beach, Calif.-based Microsoft partner Network Solutions Provider - a member of CRN's 2023 MSP 500 - said that the generative AI fervor has had a ripple effect on customers seeking Microsoft Power BI AI capabilities.

His company has worked with customers on data lake cleanup to prepare for generative AI.

"The golden nugget is going to be Power BI," Walker said. "It's going to be analysing data. It's going to be real-time information. It's going to be recommendations. Because before, you had to have SAP HANA installed. You had to have NetSuite installed. You had to have some enterprise Oracle ERP to get that type of insight for your business. And you had to have a team of analysts from Harvard sitting in a room looking at the data to make sense of it. Those days are now going away."

Gordon McKenna, global vice president of alliances at Downers Grove, Ill.-based Microsoft partner Ensono - No. 103 on CRN's 2023 Solution Provider 500 - told CRN that an example of his company's early generative AI work has been demonstrating an OpenAI application that takes in a vast number of anonymised Statements of Work to create recommendations.

"You can literally query the tool and say, ‘I've got this type of customer, and they've got this type of requirement. What do I need to put in the SoW?'" McKenna said. "And it literally scours through those Statements of Work and comes up with a response."

A member of the Microsoft Partner Advisory Council, McKenna said that Microsoft's investment in AI is for the long haul and that it has prompted AWS, Google Cloud and other rivals to publicly announce how they are tackling this technology.

"I would say the pivot that Microsoft made around AGI [artificial general intelligence] is a sharper pivot than they made going all in on the cloud," McKenna said. "And it's absolutely the right pivot to make. They bet the house on it. … I applaud Microsoft. It's the right move. It is very exciting."

Microsoft taking generative AI seriously is why the vendor's partners need to as well, he said. Interested partners will probably see opportunities for on-premises work, private offerings with more security, and hybrid cloud.

"Any partners that aren't leaning into this now are going to be dead, same way as cloud," McKenna said. "But I think it's a quicker pivot. … The time is now. In a year's time, two years' time, the market will be saturated. Not only by partners that have transformed, but new partners coming into the market. There are a lot of startups that are like, ‘I want a piece of this,' and are leaning into the market and are going to become very quick contenders for the crown."

What partners need from Microsoft

Although some enterprising solution providers have already plunged into generative AI, all the partners who spoke with CRN had suggestions for how Microsoft can make Copilots ready for the channel once they become generally available.

WinWire's Arora said he knows Microsoft understands that even businesses won over by generative AI may not have budgeted for its adoption. AI-specific incentive Programmes for solution providers go a long way, he said.

When asked about bringing generative AI to capital-conscious customers, Microsoft's Dezen said that solving for particular business problems and communicating that this isn't technology for technology's sake is key.

"This isn't a science project," she said. "This is about how you help customers solve their real business problems, and then you can get to the crux of what do you need to do and what are the resources, investments you need in order to solve this problem."

The productivity benefits - and employee morale boost from no longer working on mundane automated tasks in favour of more complex problem-solving - can help offset the price of adopting generative AI, she said.

Productivity "is a pretty obvious place to get a direct cost savings," Dezen said. "This is where you realise savings through time savings. I love the way that we talk about Microsoft 365 Copilot and how you can eliminate those mundane tasks. With the elimination of those mundane tasks is the elimination of hours of work. There's real cost savings there."

WinWire has preview versions of certain technology from the vendor, Arora said. More previews will help WinWire and other solution providers evangelise the technology to customers concerned about content safety and accuracy.

WinWire's Guidi said that Microsoft-funded assessment Programmes and ways to help customers with building costs will help move the technology forward.

When asked about incentives, more specialisations, more training and more resources for partners, Dezen said this is only the beginning.

"There's a lot more in the road map," she said. "We're not slowing down at all."

PwC's Greenstein said he looks forward to more ways to scale vector databases, provide access control and synchronise data - not to mention integration to prevent employees from having to work with dozens of different AI systems.

"Those are going to be critical as this becomes an enterprise capability," he said.

In a June blog post, Microsoft suggested that people interested in staying updated on Copilot developments use Message centre in the Microsoft 365 admin centre and the online Microsoft 365 road map.

Interlink's Wilson said Microsoft needs to give partners concrete release dates for when Copilots and other generative AI offerings go generally available. The vendor also needs to release more information on how much generative AI will cost customers and better address "hallucinations" - the term for when AI models produce false information.

Although the hallucination issue is improving and solution providers have techniques they can use when interacting with models to minimise the concern, "sometimes the model just has to be able to say, ‘I don't know,' versus making stuff up," Wilson said.

Providing solution providers with "solid training" on leveraging generative AI and interpreting output will help with user adoption, he said.

EY's Little said solution providers can put guardrails in place for customers and investigate the causes of hallucinations. Sometimes, a hallucination reveals an issue with the customer's data used to power the AI, Little said.

"We were demoing [the payroll chatbot] to a client," he said. "And the client just asked a question, came back, and the client said, ‘Well, that's wrong.' We were like, ‘OK, well, let's click.'

So we clicked to the data source. And actually, what we found was the data had wrong information. So actually, we found a secondary effect in circumstances where it ends up helping us from a data cleansing perspective and continuously making it better."

Microsoft making governance tools and prompt engineering tool sets more available will help customers, Little said.

Core BTS' Thompson said Microsoft has done a good job of talking about responsible AI broadly, but he wants to hear more about industry-specific responsibility and how to factor for customer interpretations.

"If you know anything about the governance and risk and compliance, it's really how to take those regulatory controls, and each company has their own interpretation of their definition of what it means," he said. "What is that prescriptive guidance that needs to come into play? And how do we actually take those controls that they have in the platform to conform it to meet that?"

He also wants to see all vendors put interoperability forward. "It shouldn't matter whether it is a third-party vendor, whether it's Microsoft, or whoever it is," he said. "We're playing into the ecosystem of what our enterprise needs and also from our consumer perspective. We need to be able to play together in that same pool."

Network Solutions Provider's Walker said details on how generative AI uses customer data will help build trust in the technology.

"They need to give us and the community - the Microsoft community - best practices," he said. "It's having an honest, detailed conversation about what AI is doing and how it uses data … so people can make a decision willingly on giving their data and what they are feeding into it."

Walker said more education around using generative AI to avoid headline-grabbing debacles such as Samsung employees feeding proprietary data to ChatGPT and a New York lawyer filing a legal brief with made-up legal opinions generated by ChatGPT.

He related this to when early internet users needed education on when not to put in credit card information and Social Security numbers when asked online.

"There just needs to be rules or ideas of, ‘Hey, this is what we should or should not do with AI,'" he said.

Aligning with Microsoft

When Arora and WinWire CEO Ashu Goel both left Microsoft in 2007 - Arora worked at the vendor for about seven years and Goel about six - to start their solution provider business, they decided that one of their competitive advantages would be always aligning closely with Microsoft's direction.

"From the very early days of Azure and everything else, we have made sure that we are always part of the best and the latest and greatest that Microsoft is investing their time on," Arora said. "When mobility came into the picture. When IoT came into the picture. When cloud, of course. … as data and AI itself came into the picture."

For Arora, investing time and money this early into generative AI means WinWire stays ahead of the competition to win new customers and deliver innovative solutions to existing customers.

"We are the AI expert for you for a long time - data and AI," he said. "And we are also generative AI experts. … Our commitment to Microsoft as a platform, Microsoft as a partnership and to our existing customers, it is creating a lot of buzz out there for us as a company."

Although WinWire is strictly a Microsoft partner, Arora is still watching how competing services from Google Cloud and AWS compare. For now, he feels secure with his bet on Microsoft.

"Microsoft, the way it has increased its presence in everything in the last five, 10 years, and in the last five or six months on this technology, I think our bet has been paying off," he said. "They need partners like us, the team that I'm bringing in, to go deeper into technology to scale and to speak to the customers. And we are able to provide that."

This article first appeared on CRN