Microsoft FY'25 Priorities
Microsoft key focus and investment areas for FY25 are Copilot, AI, Migrations to the cloud and Security.
Copilot. Microsoft M365 Copilot has officially been in market since November 2023 and was widely released in February 2024. Riding the ChatGPT wave, Copilot has been hyped to the max by Microsoft, but it is unclear how successful its deployment is. Microsoft does not release official numbers on Copilot. The high price point of about 350$ a year, to be paid yearly in advance, has not helped a widespread deployment, and partner and customer feedback is mixed. Keep in mind that Microsoft uses Copilot as an umbrella term and has about 25 different Copilots across the whole stack.
AI. Microsoft describes its AI stack as consisting of three platforms, Copilot, Copilot devices and Copilot & AI stack. A customer would naturally move from using Copilots in Microsoft’s SaaS applications, to copilot studio for building no code agents, to Azure AI studio to Azure Foundry. Microsoft has been very close to OpenAI, and as an enterprise customer to access OpenAI in a secure way the only option is Azure, as OpenAI runs exclusively on Azure for the moment. Microsoft is also pushing Fabric very hard. Fabric is an all-in-one data analytics platform that integrates data engineering, data science, real-time analytics, and business intelligence, unifying services like Azure Data Factory, Synapse, and Power BI into a single SaaS solution.
Migrations. AWS has had migrations to the cloud as a key strategic imperative. This is the first year that we have seen Microsoft specifically focus on Migrations to the cloud as a key objective.
Security. Microsoft’s security portfolio is one of the most complete and provides cybersecurity solutions across identity protection, endpoint security, cloud security, threat intelligence, and compliance, integrating AI-driven defenses through products like Microsoft Defender, Sentinel, Entra, and Purview. It secures hybrid environments, covering identity, threat detection, incident response, and regulatory compliance across Microsoft and third-party platforms. However, Microsoft, does not offer managed security services (MSSP), requiring customers to rely on partners or in-house teams. Microsoft lacks partners that can provide and end to end services in the security space.
MSP Implications
If you want to have an active relationship with Microsoft as a MSP, you need to drive all or some of these elements in your portfolio, internal consumption and go to market. If you don’t need an active engagement with Microsoft for your continued success, take this article as directional input. The following points are suggestions on how an MSP can potentially further integrate the Microsoft stack to gain efficiencies, enhance their portfolio of services and improve their go to market.
1. AI-Powered Managed Services
MSPs can integrate AI-driven efficiencies into their service offerings. Providing AI-powered automation for clients can become a key differentiator.
Operational Scalability: AI allows MSPs to streamline operations, reducing manual intervention in routine IT management tasks. AI-powered (Copilot) Actions can automate key service desk functions.
2. Positioning Copilot as a Service Offering
Enterprise AI Adoption Strategy: MSPs can embed Copilot solutions into Microsoft 365 and services for their clients, making AI-driven productivity a core value proposition. This also means moving into adoption and customer success like services.
MSPs can differentiate services by offering custom AI workflows through Copilot Studio. Creating industry-specific AI agents can allow them to serve niche markets.
3. AI-Driven Workflows
AI-Driven Collaboration: As AI integrates deeper into Microsoft 365, MSPs can help clients transition to AI-enhanced collaboration environments, optimizing document automation and knowledge management.
4. Migrations.
MSPs should focus on migration on-premise customers to the public cloud as this is a metric that Microsoft is closely watching. Microsoft has zero interest in your on-premise business.
MSPs should design specific programs and services to move their installed base to the Microsoft clouds.
4. Monetizing AI & Cloud through Azure AI
AI Workload Optimization: MSPs could leverage Azure AI Foundry to develop AI-native applications and managed services, offering clients access to advanced AI capabilities without the overhead of custom development.
Industry-Specific AI Solutions: MSPs can fine-tune AI services for vertical markets, such as healthcare, financial services, or retail.
5. Security and Compliance
Security remains a top priority. MSPs could offer AI-driven security monitoring and threat detection using Microsoft’s Zero Trust framework. MSPs can sell regulatory compliance solutions by leveraging Microsoft Purview to enforce data governance and mitigate risks.
MSPs that embrace AI-driven service delivery, security, and automation will gain a competitive edge. With AI fundamentally changing IT services, MSPs should probably pivot from traditional infrastructure management to AI-enabled, data-driven managed services.
Key lessons and takeaways for PE firms.
1. AI-Driven Efficiency Enhances EBITDA and Exit Multiples
AI-powered automation can significantly reduce operating costs by optimizing labor-intensive managed services such as help desk support, IT monitoring, and cybersecurity.
Implication: PE firms should ensure their MSPs invest in AI to improve operating efficiency and profitability.
2. Build Differentiated AI-Enabled MSP Offerings
Implication: PE firms should push their MSPs to productize AI services, creating scalable, offerings that differentiate them in the crowded MSP market.
3. Cybersecurity as a Core Value Proposition
Security is an opportunity. Very few Microsoft partners can deliver on security end to end, from devices to cloud to (custom) application security. This is an area where Microsoft is proactively recruiting and nurturing partners.
Implication: PE firms should ensure their MSPs think broadly about their security portfolio and capabilities through inhouse skills, acquisition or partnering strategies.
4. Data Monetization & AI Integration are Key for Long-Term Growth
Data infrastructure modernization is critical for AI to deliver value.
Implication: PE firms should prioritize investments in data-centric service models, ensuring their MSPs move up the value chain beyond traditional IT support.
How can Wingspan help?
As a Microsoft partner you always must balance between what Microsoft wants you to sell and what your customers are ready for and interested in. You don’t want to be too far ahead of your customers but also not too far behind Microsoft.
We can help you define your desired future state and the roadmap to get there through an initial envision exercise or a more detailed northstar engagement. We can also help you with some blocking and tackling if you need hands on help with your Microsoft engagement (from strategy and portfolio to partner center, programs and incentives)
About Wingspan Equity
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