By Nicole Dezen, Chief Partner Officer and Corporate Vice President, Global Partner Solutions
The magnitude of innovation in this era of AI is transforming organizations of all sizes, from law firms to retail shops, government offices to large global companies, and creating new opportunities for our partner ecosystem. Our customers across the globe are relying on partners to help them become more connected to the cloud, integrate AI responsibly and securely into their businesses, and keep them protected from cyber threats. Partners are key to driving exceptional outcomes across the customer journey, not just through a transaction, but with their value-added services and solutions that make those purchases come to life and create real business impact.
Microsoft is committed to being a company that prioritizes customer choice, now and in the future. And customer choice is at the heart of our new commerce evolution. Cloud Solution Providers (CSP) are a vital pillar in meeting customer needs. CSP is our hero motion for driving end-to-end success for small and midsize customers (SMC).
Microsoft estimates based on IDC data, October 2024, that the total addressable market (TAM) for SMC in FY25 is $661 billion ($467 billion of that in cloud solutions) and growing fast with a compound annual growth rate of 15% (20% for cloud) over the next 4 years for companies with fewer than 3,000 employees. Partners are the trusted advisors who unlock business outcomes for these important customers. Equipped with solution designations, partners serve these customers with efficiency and scalability to address their evolving needs, driven by rapid market innovation.
In addition, we are aligning partner incentives across the entire customer life cycle to assist partners in delivering value and developing sustainable, profitable businesses to serve these SMC customers. In FY25, we boosted our incentives to 70% of our total partner investment spend for partners serving SMC customers. This spans across our portfolio of six commercial solution areas, enabling our partners to deliver customer value across our entire platform.
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