263 – The Lightbulb Moment: Microsoft’s Vision for AI and its Partners

Cyril Belikoff at Ultimate Partner LIVE in Redmond, WA

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Welcome back to the Ultimate Partner® Podcast.

I’m excited to bring you even more from the Ultimate Partner®—and this one’s straight from the main stage at Ultimate Partner LIVE at Microsoft’s Conference Center in Redmond.

If you haven’t been in the room yet, these events are something special. The energy, the insights, the access—it’s where strategy meets execution, and the partner community comes alive.

In this episode, we feature a powerful session with Cyril Belikoff, Microsoft’s new leader for Marketplace, who joined us to share his bold vision for the future.

Cyril dives into:

• The “lightbulb moment” around AI and why it changes everything
• How Microsoft is mainstreaming the Marketplace as a core GTM motion
• What partners need to know about incentives, MCAPS priorities, and the rise of multi-party offers
• And how the shift to AI and ecosystem selling is redefining what success looks like in this era

We’re curating the very best of these moments—fireside chats, expert panels, and executive insights—so you can stay ahead of the curve and fully aligned to where Microsoft and the industry are heading.

And this is just the beginning.
More sessions. More voices. More of what you need to know.

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Thanks for being on this journey with us.
— Vince

https://youtu.be/yIfT1HZriGQ?si=yq_hIvNSp1pvrWtS

Key Takeaways:

• AI adoption is creating exponential opportunities for partners, with leading customers seeing 10x ROI in just over a year.
• Microsoft’s marketplace is centralizing digital transactions, incentivizing co-selling, and simplifying procurement for customers.
• Microsoft prioritizes its partners, offering the highest compensation among hyperscalers and integrating marketplace deeply into its products.
• The multi-party offer (MPO) capability is driving significant sales growth, enabling partners to collaborate effectively and increase deal sizes.
• Microsoft emphasizes a channel-led approach, empowering partners to scale and leverage the marketplace for software and application sales.
• Microsoft views the current AI landscape as a “light bulb moment,” urging partners to innovate and build solutions within its ecosystem.

If you’re ready to lead through change, elevate your business, and achieve extraordinary outcomes through the power of partnership—this is your community.

At Ultimate Partner® we want leaders like you to join us in the Ultimate Partner Experience – where transformation begins.

https://youtu.be/s33fltuizEo

Transcript:

Key Tags:

Microsoft, Partner Ecosystem, AI, Marketplace, Cyril Belikoff, AI Adoption, Digital Transformation, Cloud, Azure, Co-sell, Channel Partners, ISVs, Software Development, Multi-Party Offer, Customer ROI, Partner Profitability, Technology, Innovation, Business Strategy, Future of Partnerships, Microsoft Azure, AI Foundry, Trade Ledger, Content Square, Hyperscalers, Managed Services, Data Quality, Ultimate Partner Live, Ultimate Partner Experience, UPX.

Transcript:

Cyril Belikoff Transcript

[00:00:00] Cyril Belikoff: You know, as the AI adoption increases, the opportunity for partners sort of exponentially explode, customers are seeing almost four XROI on average, and then the, the leading customers who are really leading into AI are seeing 10 XROI. They’re seeing that ROI in like 14 months.

[00:00:19] Vince Menzione: We believe this time is like no other.

We believe we refer to these as the tectonic shifts,

[00:00:25] Intro: all the hyperscalers in the world, if you add them all together. Managed  services will be one and a half times larger

[00:00:31] Cyril Belikoff: because it is the customer buying behavior that has created a need for all of us to rethink our models.

[00:00:38] Intro: Until we have data quality, the effectiveness of AI cannot be realized and effectiveness of the partnerships cannot be realized.

Can you figure out, first, what your purpose is and how Microsoft can support your purpose and how you can support Microsoft purpose? Now we have a partnership. It’s the ultimate partnership.

[00:00:58] Vince Menzione: Welcome to The Ultimate Partner. I’m Vince Menzi, own your host, and my mission is to help leaders like you achieve your greatest results through successful partnering.

We just came off Ultimate Partner Live at Microsoft Redmond Campus, our most powerful event. Yet, over two days, we gathered top leaders to tackle the real shifts shaping our industry. If you weren’t in the room. This episode featuring Cyro Beov, Microsoft’s new leader responsible for marketplaces. Brings you right to the edge of what’s next.

Let’s dive in, uh, all up, uh, Cy Beov, I’m so glad to have you join us. So good to have you here today, sir. Thank you. Thank you for joining us. Thanks for having me. I’m I gonna grab a water here. Oh, please do. Yeah. I’m gonna grab a coffee. In fact, you uh, you were, you’re second next to me here. Great. Perfect.

We put you in the center. The hot seat. In the hot seat. Yeah. So, so great to see you. Yeah. Um. Yeah, we were, I was sharing this with, with the audience, but you and I were supposed to get together in person. Exactly.

[00:02:00] Cyril Belikoff: We had a snowmageddon here. I think, you know, I picked the heck of the time. You get a dusting of snow and Seattle sort of shuts down.

[00:02:06] Vince Menzione: You know, I grew up in the Northeast, we get 48 inches of snow overnight, and everybody would continue on. And I was like, oh, what happened? I mean, I was, I literally was at the hotel going, okay, well I was doing all these, uh. These teams calls because I couldn’t get people in the meetings and that kind of thing, so I’m so glad we could.

Thank you. Do this in person. Thanks for the

[00:02:22] Cyril Belikoff: invite again.

[00:02:23] Vince Menzione: Thank you. Thank you so much. See you, all of you. So, uh, I thought we’d talk a little bit of a broader, uh, conversation too, and then we’ll dive in on marketplace. Great. Because I think it’s a greater conversation. Great. I happen to know your organization.

Um, Alyssa Taylor has been a podcast guest here, somebody I worked with at Microsoft. Yes. And who’s taken on bigger, bigger, and bigger responsibilities within the organization. Uh, leading. Leading, I would call it cloud Go to market probably is probably the right term. But, uh, talk to me about your organization because.

You, you drive a tremendous amount of the energy and effort around Azure and industry Yep. And partners, uh, even before this marketplace changes. Yes. Or happened recently. So tell us a little bit about your background. A long time at Microsoft Over, yes. Over 20 years.

[00:03:11] Cyril Belikoff: Yeah. Um, so yeah, I’ve been at Microsoft, I think 27 years.

27, 28, something like that. Right outta

[00:03:17] Vince Menzione: college.

[00:03:17] Cyril Belikoff: Yeah. Lots of different, pretty much. I, you know, I had, uh. I had three days at, uh, PricewaterhouseCoopers, and then I decided, no, no, Microsoft’s my thing. Um, it’s my move. And so, uh, it sort of paid off, I think. Um, so yeah, I, uh, I’m part of, as you mentioned, uh, the commercial, um, cloud and ai, uh, organization.

Yeah. Uh, and my particular remit is around solutions and. Partner marketing to really focus on how we take all our products and take them to market with more of a customer outcome solutions basis. And then obviously, how do we enable our partner ecosystem? And that’s where sort of marketplace sort of has now, um, fit, uh, fit in there.

So it’s, it’s, you know, it’s an exciting time for software development companies, system integrators, all types of partners really, particularly around this AI transformation. Yes. And what’s going on? Um, you know. And of course being in the, the AI team, I’d be remits to talk a little bit about that and what it really means for partners.

I think Please do, please do, please do. Um, for, you know, this is a massive platform shift, I think everyone is, is is talking about it sort of at the same altitude as cloud or mobile or the internet. I sort of prefer the light bulb analogy. Um, and what I mean by that is, you know, back in many, many years before cloud, um, someone invented the light bulb.

Yeah. And it, it really changed. Both the con the, the, the life in the home and in the workplace, productivity, you know, sword. Um, but then people were like, well we, now we need sources for that light bulb, so we need to build infrastructure. Yes. And power and then power stations. And then the power station companies built this power stations and then realized, well, we can actually produce more power.

So are there other things we can put in a home in a factory? Um, and then. People started to innovate. And then not only were they light bulbs, but dishwashers and washing machines, that’s, and all these sort of innovations came. And so AI is sort of at the same platform level. Yeah. Um, and we are com commit.

We are committed in building out tons of data centers. We’re buying. Endless amounts of incredible amounts, AI chip sets, uh, to put into the infrastructure. We are building a few light bulbs, yes. But we need partners to build dishwashers, washing machines, and innovate, um, uh, across the new opportunities for the customers.

And it’s just, it’s an exciting time and that’s where sort of marketplace comes into that. Yeah. Portfolio.

[00:05:37] Vince Menzione: Well, and I love the fact that it, you, you’ve taken and embraced it in such a more deliberate way. Right? Because when we first started thinking about it, cloud, you mentioned cloud really changed things in a big way, uh, because it, it opened up opportunities and AI of course became that.

Yeah. Um. So, you know, marketplace, it felt like it was on an island in many respects. And not, this is not diminishing or just, it was just, I think it just kind of grew up on its own and it was, it was tied into a product team and just now seeing the evolution of where we’re going with this and how it’s more cohesive into this whole cloud go to market.

I’d love to get your. Uh, perspective on what is changing and how it’s going to enhance things for, for the partners in the room today.

[00:06:20] Cyril Belikoff: Yeah, so if we connect back to AI and, uh, and even back to our history, we’ve always been a partner first company and, and like when we started the marketplace, you’re right, we had to incubate it, we had to build it at many years back now.

Um, and we needed to mainstream it into the core business so that it can be part of our product strategy and we’ve. Our products are, you know, we’ve always wanted to be great partners for partners, um, and with our core products. And so marketplace should be no different. And you know, for marketplaces has both the sort of supply and demand side.

So we have our classic customers, but then our partners need to. You know, provide supply into the marketplace. And so we want to be awesome partners for those software development companies. Give them a great stack to build on. Um, allow them to innovate and differentiate with ai. Help them to, you know, have amazing productivity with their own developers with things like GitHub copilot.

Yep. And then to leverage our own footprint to grow with our sellers. Exactly. With our, with our products and sort of the broad distribution that we have. And so marketplace becomes the center of that. It does becomes the core of how we go to market faster, sell more, uh, and we are investing on the demand side to get customers more to marketplace, right?

And so we’ve doubled our marketplace revenue just in this last year. Um, of course. Now much more money is made by partners. Yeah. Through that revenue. Um, and, uh, we have aspirations and on the path that this is the store to buy your AI solutions. Yes. With Microsoft as the platform and then partners providing whether it’s software as a service or agents, and it’s fast becoming that.

So we are seeing, even on ai, we’re seeing a hundred, 200% growth on ai, particularly in our marketplace. That’s outstanding. Lots of momentum. You’re right. We, we sort of had to incubate it like any, excuse me, any good product. You want to incubate it so it doesn’t get caught up in. Sort of the requirements of the machine.

[00:08:17] Vince Menzione: Yes. Right? Yes. And

[00:08:18] Cyril Belikoff: now, now it’s time to mainstream and we want to go really big, as you said.

[00:08:21] Vince Menzione: Well, I think what you’re signaling to the audience and to the partners watching today is this, that like Microsoft is doubling down. Right. And I always talk about the seven seats at the table because I’ve always believed, I mean, from the old days, it was like, you know, you get a large GSI in the room and you have one throat to choke, but customers are making and dictating their own decision process, and they’re looking at the seven seats at the table.

They’re looking at. They’re looking at data and, uh, AI partners, they’re looking at security and governance partners. They’re looking at maybe systems integrators or managed service providers. They’re bringing it all together. And because they’re buying off of your marketplace, they can do that. They couldn’t do that before.

Right, right. And now there’s a new, a new vehicle to get there. So,

[00:09:00] Cyril Belikoff: yeah. I, I, I totally agree. I think there’s, um. Lots of opportunity as you talk about the multiple seats at that table. Yeah. And so if you bridge into the connection between a partner and a customer and Microsoft and what that might look like, you know, the marketplace, as I mentioned, is becoming the center for the digital transaction, whether it’s a large customer or small, but also we putting the right levers in place to connect partners with our own sellers.

And so if we wanted to be at the center to provide the right solution to the right customer at the right time. We need to make sure that our own sellers have marketplace in their compensation, and we’ve made that change.

[00:09:39] Vince Menzione: Nice. Um, so what is the connection point now across Azure Consumer Revenue marketplace?

Yeah. And co-sell. So the first is,

[00:09:46] Cyril Belikoff: so the first on co-sell is that our sellers are incented to co-sell literally in their compensation plans. Nice. That marketplace can help them retire their quota. Like, it doesn’t matter how much strategery stuff I do in my ivory tower. Yeah. That lever is golden. ’cause sellers follow their back pocket.

Fantastic. They’re, we tell them to follow their back pocket. That’s literally how we ask them to, to operate. Um. Then from the customer side, uh, we have this concept called Microsoft Azure Commit to consume or the Mac. Yes, we love our acronyms and so customers will negotiate with their account reps or our executives and they’ll make a commitment to Microsoft for their Azure commitments over a three to five year period, and then they’ll get some sort of discount.

Simplistically, I’m just simplifying it. Yes. A hundred percent of the marketplace transactions can retire that customer’s commitment. So if a customer makes a $10 commitment to Microsoft, it’s a little bit more, add some more s zeros. But something like this, say $10 and they’re buying an application through the marketplace and that application cost $2 and Microsoft’s getting, you know, sense and the, the, the software development companies getting much more, uh, percentage wise, they are able to retire them.

Full Microsoft commitment on Azure. Uh, based on the full commitment that they’ve bought, bought in the marketplace, including the cost of the, the ISV or software development company application. So we are incenting the seller and we are incenting the customer to get to, to encourage their flywheel to go even faster.

And, um, many customers look at that, uh, Azure commitment and that contract as also a procurement, um, accelerator. Yes. So if, uh, software development companies. Have things in the marketplace, the procurement requirement is substantially reduced because. That acquisition has already been approved by the business.

Yeah. And as long as there’s a business leader that says, yes, I want you allow, I will allow you to decrement the, the Azure commitment. There’s the procurement side is close to zero in some cases. Now, not all cases, but in many, many customers are going that way.

[00:11:55] Vince Menzione: You’ve simplified it, you’ve taken away all the legal language.

Correct. You’ve taken away the, the whole, the whole term, the terms, and then worrying about payments. Right. It’s all, it’s all handled now for partners.

[00:12:04] Cyril Belikoff: Yeah, and then obviously we incent the seller and then we incent the the customer too. And then lastly, a lot of software driven companies. Sort of on the medium si medium to small size.

They love the fact that it’s a global transaction. Yes. They don’t have to deal with taxes across B country boundaries. That’s all handled in the marketplace. And so there’s just so much value to getting scale. Um, I. We’re very excited by, as you can tell. Yes. I’m, I’m,

[00:12:28] Vince Menzione: I’m excited with you. I’ve, I’ve talked about this as the marketplace moment, and you know, of course we’re gonna have some of your other leaders up on stage.

Right. We’re gonna have Sandy talking, talking with Nvidia and some conversations. We’ll have some of the marketplace vendors that help enable these ISVs or software development companies on how to, how to attract and work with Microsoft. We’ll also have some of the co-selling leaders in the room that will help.

How do I, how do I become more relevant with Microsoft? So I’ll have some incredible conversations here. And this all ties in. I, we talked about marketplace, but the Azure consumer revenue number. Um, I think we know that there’s a paradigm between marketplace and channel sales. What’s the advice on how to balance the best of both worlds?

This is an interesting conversation I hear all the time. From reseller or channel partners operating in one direction and the marketplace operating in a different direction, or at least that was the past. Yeah, that was the past paradigm.

[00:13:19] Cyril Belikoff: Yeah. It’s a, it’s a great question. The first I would say is use it.

Give us feedback and we’ll get better. Um, and that’s how we work with our partners. We work for 50 years like that. Um, and so we wanna work for the next 50 years. And so there is no. Either model that we have to crack besides our channel integration with marketplace, it’s just vital. Yeah. Um, we spend a lot of time with Nicole and her team around how we, what we call sort of co-sell at scale and like how do we get scale through our channel without a Microsoft seller involved.

That’s right. Um, and so we are, we are thinking deeply about that and, and really working through that. And so it’s really about the channel led sale and how we enable marketplace and transitioning. Um, the classic business where needed to marketplace. Yeah. Now there’s obviously parts of the business that might not be on marketplace, but if you’re selling a software, um, a software application, the marketplace is the right place to do it and then connects to everything that we just discussed on that value that the customer values.

Um, and, you know, we want to enable access to the 500,000 partners at scale that rely, uh, on our classic partner, um, engines. On the new marketplace and we, we started to do that. And I guess the, the hero, uh, capability is, uh, multi-party office or NPO.

[00:14:43] Vince Menzione: Yeah.

[00:14:43] Cyril Belikoff: Um, the ability to do. Multi parties that this a partner with a software company or or app provider and a customer multi-party offer sort of that capability.

And we’ve, you know, we’ve, we’ve launched it in select markets, us, uk, Canada, and already we’re seeing sort of a third of our sales with, uh, almost two times the average size. That’s incredible. With that capability, it’s obvious, like we know, like, yes, we had to incubate the business. Now we’ve gotta mainstream, we’ve gotta mainstream into.

Our channel partners too. And so while I don’t have tons to share, you can be sure that we are building more capabilities in the future that. Empower more channel led growth and more partner to partner selling.

[00:15:26] Vince Menzione: That’s fantastic. It is an incredible engine, the multi-party offer engine. And then some of the early learnings were that it wasn’t always the largest partners in the world.

It were, but it was partners that were closest to the customer providing some capability along with the other solutions that were coming along with the multi-party offer. Mm-hmm. So, um, just in, uh, in, so I think, you know, it is an inspiring time for all of us as we, as we think about this, uh. T we were, we’re at the end of 25.

25. You’re leaning in on 26 in a big way. Yeah. I’m, I’m assuming here. Of course. So I do think it would be great for you to give some of the learnings to this group of leaders in the rooms, all the people that are gonna be attending or watching this on livestream. Um, anything you’d like to leave us with going into fiscal year 26 for this group?

Yeah.

[00:16:13] Cyril Belikoff: And thank you for, again, for the opportunity. So as we close out here, um, you know, as the AI adoption increases. The opportunity for partners sort of exponentially explode. Yeah. Now I use the light bulb naturally, but I’ll give you some numbers right around numbers. Customers are seeing almost four XROI on average, and then the, the leading customers who are really leading into AI are seeing 10 XROI.

Wow. And the amazing piece about that is. In addition to it being 10 x is that they’re seeing that ROI in like 14 months. In typical other IT projects, it’s been like two to three years. And you write a business case and the CFO looks at the business case and they have this, you know, risk analysis and it goes three, sometimes five years.

They’re seeing ROI in 12 to 14 months. Yeah, that’s fantastic. And um, it’s not surprising ’cause that’s literally the pace of the industry right now and AI is even. Faster than that. And so there’s, there’s customer, real, customer tangible value. In addition to that, for every dollar that Microsoft makes, our system integrated partner makes almost $9 and a software company makes almost $11.

So the, the math on the partner side. Is very good too. It’s very good. And so when you just, just think at a high level of that flywheel, okay, the customer is seeing value, there’s opportunity in the partner. Of course we see value, we are investing that flywheel has to move. Yeah. And if you’re on that bus, you’ll get value if you miss the bus.

You don’t get value. Like we try to get on a few buses, many across the years. I won’t mention mobile, et cetera, et cetera, but maybe I just did. I, I remember those days I was in this room. Um, we try to get on a few buses. We have not missed this bus, and we are leading this bus and we want, we need our partners, um, because as I said, we, we are building platforms and so, and the

[00:17:57] Vince Menzione: compensation for partners is the highest in Microsoft amongst the three hyperscalers if you do the analysis work that I, yeah, we are

[00:18:03] Cyril Belikoff: pretty aggressive.

Yeah. Uh, in looking after our partners, and again, all different private partners, channel partners, system integrators, software companies. And really, as I said, the marketplace is the connector for it. If you haven’t engaged in the marketplace, get on, take a look, try it, do a few transactions with some customers and then give us feedback and you know, we will continue to evolve it even deep into our products.

For example, uh, it’s a good example. So Azure, AI Foundry. So it’s basically our core product for that customers use to implement. AI applications, whether it’s advanced machine learning or generative AI or AI search, pick your thing. It’s, it’s got all the goodness in there. It’s, you know, confidential ai, trustworthy ai, all all the pieces, AI foundry.

So customers literally are going to this product. In the product. It has the most models on the planet, like 1800 large language and small language models. Wow. Customers need to transact those models. Yes. So what we’ve done is we’ve connected that core product. And when the customer is trying to implement it says, do you want to transact this?

And it, it’s an automatic behind the scenes link to marketplace. So it gives you a mental model on how we think about this is not just gonna be like a classic partner transaction in front of a customer thing. We are going to embed it in our products more and more and more to, to really encourage that flywheel between customers and partners in a really seamless integration way.

Um, so many. Great examples. Yeah, I get super passionate about it. I guess I would, um, before I close out, I’ll mention one or two, uh, partners, so please do. Trade Ledger is a good example that I love. Trade ledger, um, end-to-end like lending platform. They literally did their first go go, uh, COSAL deal with a big bank.

And the deal that the previous previously negotiated went from 4 million. To 25 million. Unbelievable. And that might not sound lot, a lot to some Microsoft people. Yeah. But for a company like Trade Ledger on one deal, then they can try do it on 5, 10, 20, and a hundred deals. That’s, that’s real return. Um. I guess Content Square is another one.

They do insights, analytics. Yeah. And they’re seeing marketplace help them close deals, 11, 12, 13% faster with more than a hundred percent uplift on on their deal value. And so there, as I mentioned, we are integrating into product, we’re driving demand, we’re getting software companies to build, integrating with channel.

And so we are, we’re investing deeply. Right. And I guess I would just close out with where I started. We have a light bulb moment. So let’s go build some washing machines, get it onto the marketplace. I love this. And go

[00:20:45] Vince Menzione: learn together. I love that. And this is your first time really, I would say, at an event like this with partners in the room.

So, so great to have you. Thank you so much. This effort and having you hope, hope to have you on stage many times. Great. Because I think it is a light bulb moment. I think we are just at the beginning, the precipice of this opportunity and really it’s gonna be an exciting time ahead. Perfect. So, so great to have you.

Thank you

[00:21:06] Cyril Belikoff: so much. Great to appreciate it. Great to have you. Thank you sir. Appreciate you making time for us. Thank you. Yeah, thank you. Thank.

[00:21:11] Vince Menzione: Thanks for tuning into this episode of Ultimate Eye to Partnering. We’re bringing these episodes to you to help you level up your strategy. If you haven’t yet, now’s the time to take action and think about joining our community.

We created a unique place, UPX or Ultimate Partner Experience Leaders come to learn from each other. It’s more than a community. It’s your competitive edge. With insider insights, real-time education, and direct access to people who are driving the ecosystem forward. UPX helps you get results. And we’re just getting started.

We’ve got big plans for you this summer as we’re taking this studio, and we’ll be hosting live stream and digital events here, and it’s all coming to you soon. So visit our website, the ultimate partner.com to learn more and join us. Now’s the time to take your partnerships to the next level.

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Key Tags:

Microsoft, Partner Ecosystem, AI Transformation, Nicole Deason, Microsoft Partners, Generative AI, Cloud Solution Provider (CSP), MCAPS Priorities, Customer Zero, Skilling, Business Growth, Profitability, SMB, Fiscal Year 2026, Microsoft AI Cloud Partner Program, Innovation, Industry Solutions, Channel Partners, System Integrators, ISVs.