Microsoft Azure $19.5Bn Commits Surge & Wiz's Winning Cloud Co-Build Strategy
Hi, it's Roman from Partner Insight. Welcome to my weekly newsletter, where I deconstruct winning Cloud GTM strategies and the latest trends in cloud marketplaces.
Today we'll break down:
Microsoft's record quarter: $13Bn in AI revenue and an unprecedented $19.5Bn jump in Azure commitments in 90 days - and what this means for alliance leaders
Inside Wiz's Co-Build Framework: How deep cloud partnerships helped them win 2024 Marketplace Partner of the Year from both AWS and Microsoft; now serving 45% of Fortune 100
Leveraging Microsoft Marketplace Growth: In FY24 Manufacturing sales surged 156% globally, Financial Services jumped 308% in the UK - we'll break down how to align with Azure industry plays with a segment-first strategy.
Before we dive in:
📊 [Online Workshop] 5 Channel Strategies to Drive Cloud GTM Growth in 2025
Join me and Darren Sharpe, Microsoft Commercial Marketplace Lead - UK Services Partners, on February 11th to decode the winning playbook for marketplace growth with channel partners. You'll learn:
How marketplaces accelerate with channel, as customer cloud commits surge beyond $380Bn
Battle-tested channel + marketplace tactics from top-performing ISVs
How early movers are capturing share as channel is on track to drive 50% of marketplace revenue
The old "wait and see" approach to marketplaces no longer works. Join us to learn what does. It's free.
Now, let's analyze these market-shifting developments...
Microsoft Just Hit record AI & Commits Milestones
Last week Microsoft revealed two numbers that signal a fundamental shift in enterprise tech: $13Bn in AI revenue run rate and $19.5Bn in new cloud commitments in 90 days (new QoQ record). Here's what tech leaders need to know.
Growth is Extremely Strong
31% Microsoft Azure growth at their massive revenue base is very impressive. It's 1-2 points slower than previous quarters but remains an amazing achievement.
Even excluding AI, Azure's core services grew at 18% - a very healthy clip. This indicates continued momentum in traditional cloud migration and modernization.
For the next quarter, Azure is expected to continue strong growth of 31-32%.
AI is More Than Hype
With Microsoft AI services now at $13Bn run rate, while contributing 13 points to Azure growth, we're seeing real enterprise adoption, not just experimentation.
⚡ $19.5Bn Jump in Commits in 90 days = Customer Confidence is High
Commitments: $149Bn (estimated as 50% of total Microsoft Cloud, likely even higher)
The $19.5Bn increase in cloud commitments this quarter (from $129.5Bn last quarter) signals that enterprises continue to make long-term bets on cloud and AI infrastructure.
Think about it - Azure's estimated backlog jumped almost $20Bn. In other words, Microsoft's remaining performance obligations grew 34% IN ADDITION to Azure revenue growth of 31%.
Infrastructure Investment Follows
To support this demand, Microsoft's CapEx increased 13% last quarter to $22.6Bn.
The market had been eagerly awaiting comments from Satya Nadella on whether he'd confirm the $80Bn CapEx promised for this fiscal year.
Microsoft has already increased CapEx 13% quarter-over-quarter from $20Bn in Q1 to $22.6Bn in Q2, spending $42.6Bn of the promised $80Bn in just the first half of their fiscal year.
For the next two quarters, they expect spending similar to Q2 levels, effectively confirming the $80Bn CapEx target despite recent market concerns about DeepSeek AI.
DeepSeek model itself is now available on Microsoft Azure.
Why it’s Fantastic News for Alliance and Marketplace Leaders
For tech leaders, this data suggests we're entering a new phase where AI is driving meaningful revenue alongside enterprise cloud adoption.
The growth in commitments indicates customers are positioning themselves for multi-year transformation, not just tactical projects.
Notably, customers are increasingly leveraging these rapidly growing commitments on cloud marketplaces to buy third-party software, further consolidating their software spend within the top three cloud ecosystems.
Will other hyperscalers match this pace? I’ll cover it in next week’s newsletter
How Wiz Mastered Cloud Co-Build: Their Award-Winning GTM Framework
Wiz, a cloud security decacorn, cracked the code of cloud partnerships by mastering an often overlooked strategy: co-build. Nadav Tzuker from Wiz broke it down in our Cloud GTM Leader course and revealed how deep product collaboration with hyperscalers creates a compounding effect across their entire GTM motion.
Here is their playbook:
What makes co-build powerful?
It's not just about product integration - it's a strategic framework that creates multiple leverage points. As Nadav Tzuker, Wiz's Senior Product Partnerships Manager explains:
"We build product strategies…with our largest partners, most significantly the cloud providers… Each pillar of co-build can help create campaigns for go-to-market, get support for the engineering team, and resources as part of the account team."
Here's five key elements of Wiz's multi-layered co-build strategy:
1️⃣ Strategic Product Launches
Wiz positions itself as a launch partner for key cloud services. This creates a powerful network effect: "When your customers are adopting new AWS services, they'll use Wiz as the launch partner. They won't even reach out to Wiz - they'll just click and get Wiz on top of that."
2️⃣ Technical Programs & Designations
Nadav advises to strategically participate in cloud competency programs and service-ready designations. This isn't just for badges - it's about attaching to new product motions that give customers confidence. "If your customers are using those programs, you want to be in them," Tzuker emphasizes.
3️⃣ Customer-Driven Integration
Wiz systematically collects and analyzes customer integration requests to identify patterns worth investing in. This led to creating a dedicated product integration engineering team focused on cloud provider integrations.
4️⃣ Executive & Team Alignment
Wiz ensures alignment at multiple levels - from product managers to engineering teams to executives. "At the end of the day, it's an industry of people," notes Tzuker. This includes roadmap alignment, participating in Executive Briefings, etc.
5️⃣ GenAI Strategy
Wiz approaches GenAI from two angles: it helps customers secure their AI/ML models running on cloud providers' AI services (like Azure OpenAI and Amazon Bedrock). Wiz also uses GenAI tools from hyperscalers to improve its own product. This can also lead to GTM opportunities, such as case studies with cloud providers.
(Watch the video for more insights)
The Compound Effect
"Every time we build an integration... we go ahead and write a blog post about it"
Each co-build initiative becomes a GTM multiplier:
Blog posts transform into webinars
Webinars become conference speaking slots
Technical integrations drive sales enablement
Product launches create joint marketing opportunities
This strategy helped Wiz win both AWS Marketplace and Microsoft Commercial Marketplace Partner of the Year in 2024. More significantly, 45% of Fortune 100 companies now use Wiz to secure their cloud environments.
As one Wiz customer put it: "I expect the good guys to work together for me."
This captures a fundamental truth: in today's cloud ecosystem, the depth of your partnerships often determines your market position.
Microsoft's Marketplace Playbook: Power of Segment-First Strategy
In FY24, Microsoft Marketplace witnessed unprecedented growth: Manufacturing sales surged 156% globally, Financial Services jumped 308% in the UK, while AI solution searches soared 700%.
Here's the strategic playbook for aligning with industry plays to unlock this growth potential.
Lee Corbett, Microsoft UK's ISV Lead, emphasizes a counter-intuitive approach: start with customer segmentation first, then work backwards to determine your route-to-market mix.
"Segment determines the coverage model, the purchase model, and the role of partner."
Success requires strategic alignment across these dimensions:
Sales Play Alignment
Microsoft's GTM is built around structured sales plays - either workload or industry-focused. Aligning here isn't optional; it's crucial for unlocking GTM resources and seller incentives. AI-aligned solutions exemplify this: dominating both searches and revenue growth.
Industry-Specific Focus
Market adoption varies dramatically by sector. UK financial services and retail lead with 250% YoY marketplace growth. The key insight: each industry has unique marketplace buying patterns that should shape your GTM approach.
Customer Segmentation
Microsoft's coverage model is precisely targeted:
Enterprise: Dedicated industry vertical teams
Mid-market: Mixed coverage approach
SMB: Territory-based, digital-first strategy
Four Routes to Market:
Storefront: 5M monthly active shoppers in MSFT marketplaces and products
Direct Sales: 35,000 global sellers
Partner Ecosystem: 500,000 MPO sales partners
CSP Network: 90,000 resellers
Tactical Execution Framework:
Enterprise Segment: 2+3
Focus on leading with Microsoft sellers;
Leverage MACC incentives (Microsoft Azure Consumption Commitment)
Align value propositions with Microsoft's vertical plays,
Partner with MPOs partners for software license management
Public Sector (3)
Partner early with MPOs on public sector frameworks and align with Microsoft's public sector priorities
SMB Strategy (1+4):
Optimize marketplace listings for digital discovery and build relationships with CSP partners
💡 Pro Tip: Leading ISVs orchestrate multiple channels based on customer segments rather than picking a single route.
As Lee emphasizes, "Start with understanding how your target customers buy, then work backwards to determine your route-to-market mix."
Most importantly: align with Microsoft's sales plays, industry priorities and incentives. It's your key to unlocking Microsoft marketplace and seller mindshare.
Master Cloud Marketplace Channel Growth: February 18th Intensive
In just two years, 50% of 100Bn+ of cloud marketplace revenue will be driven by partners (Canalys). But, the playbook for channel success in cloud marketplaces is being written right now.
Join our 3-week Cloud Marketplace Channel Mastery course (Feb 18th) to learn from top companies that are already winning with partners on marketplaces.
Who This Is For:
Software companies already on cloud marketplaces looking to unlock channel growth
Channel-centric companies ready to capitalize on marketplace opportunities
Why This Moment Matters
While others wait for "proven" strategies, pioneering companies are already capturing market share and defining best practices. This intensive helps you become one of them, turning the current state of industry evolution into your competitive advantage.
Your Journey: 3 Weeks of Strategic Evolution
Marketplace Foundation & Channel Evolution
Where traditional channel strengths meet marketplace opportunities
Emerging patterns in successful integrations
Integration Strategies & Early Winners
Real-world success patterns from pioneers
Partner activation frameworks that work
Change management
Building Your Marketplace Channel Playbook
Building your unique strategy & KPIs
Execution roadmap that adapts as the market evolves
Learn from Active Market Shapers
Our mentors and speakers include David Mauer (Head of Ecosystem Cloud & Emerging Markets Programs at GitLab), Daniel Roppert (Channel & Alliances Leader - Central Europe, Wiz), and leaders actively defining the marketplace-channel integration space.
Beyond Traditional Learning
Live sessions with practitioners solving these challenges now
Interactive workshops to build your strategy
Access to our exclusive Cloud GTM Leader community
Direct connection to VP-level mentors shaping the industry
Why Join Now?
Get ahead of competitors waiting for "proven" strategies
Shape best practices and build relationships with other pioneers
Cohort starts February 18th. Our 200+ alumni from leading software companies have rated our previous courses 9/10.
Join us in defining how much of $380Bn in cloud marketplace opportunities will flow through partners.