Microsoft to contract out more software selling in the age of AI

Microsoft Corp. is planning to use third-party firms to handle more sales of software to small and midsize customers, echoing efforts by its peers to adjust sales strategies in the age of artificial intelligence.

Chief Commercial Officer Judson Althoff revealed the initiative to employees on Thursday, according to people familiar with the situation.

Many of Microsoft’s in-house sellers will also be expected to offer a wider array of products rather than having narrow specializations, employees were told. There will be increased technical training and an emphasis on selling AI-focused products.

“We are evolving the commercial solution areas within our sales organization to better reflect the era of AI and support the growth of our customers and partners,” a company spokesperson said. “This evolution reflects the shift in how customers and partners are buying and will better serve their needs.”

Several big tech companies have re-evaluated their sales strategies in recent years owing to a tougher post-pandemic selling environment and the advent of generative AI products. In some cases, companies are looking to offload sales and marketing expenses.

For example, Salesforce Inc. is offering software through Amazon.com Inc.’s marketplace and other channels. Salesforce also announced plans to hire thousands of salespeople focused on AI products. Workday Inc., too, is selling more software through third-party firms in an effort to boost profits.

Like its peers, Microsoft sells software via in-house sellers and indirect selling firms that function as middlemen. In November, the company said it had boosted incentives for third-party partners.

Microsoft often restructures teams and announces other changes near the end of its fiscal year, which closes in June. The company also restructured some technical teams earlier this week, according to a message seen by Bloomberg.