Remarks by Jon Roskill, Corporate Vice President, Worldwide Partner Group
Los Angeles, Calif.
July 13, 2011
ANNOUNCER: Ladies and gentlemen, please welcome Jon Roskill. (Applause.)
JON ROSKILL: Good morning everyone, good morning. Welcome to WPC Day Three. How are you doing? (Applause.) Another fantastic musical performance, a magical musical performance from the Canadian Tenors. What do you guys think? (Applause.) Anybody here from Canada? (Cheers, applause.) Wow, a lot of people here from Canada, okay.
So, we've got another fantastic day lined up for you today. First, this is really about bringing WPC all together and taking our businesses to the next level. We're going to start off talking about MPN and the value of the partner program to your business. Then you're going to hear from our chief compete officer, Kevin Turner, and last, at your request, you'll hear from Sir Richard Branson.
We're all here to talk about winning together. And because we're winning together every day, we're making an impact in the world. We're enabling people, and we're changing the world.
We saw this on Day One from Digital Office Japan; they were providing disaster relief assistance. Yesterday, we saw it from Dynavox. Dynavox, using Microsoft technologies to enable people to have a voice where before there was none.
We are winning together and we are changing the world. This morning, I'd like to take you all on a trip to South Africa where Microsoft recruited -- (cheers) -- that's right, South African partners, I got over and met a bunch of you yesterday, really excited to be here. They pointed out that they were some of the furthest-traveling partners. So, let's take you on a trip to South Africa where we recruited small ISVs with a solid track record, unique products, and a dream. This is their story.
(South Africa Video Segment)
JON ROSKILL: Our South Africa partners are here with us today. Let's go ahead and give them another big round of applause. (Applause.)
So, this kind of work is happening every day around the world. And it's time to recognize and celebrate the work that all of you partners do in your respective countries. Country awards are given to partners who distinguish themselves with world-class delivery of Microsoft solutions.
This year, there are 92 country award winners, 92, a spectacular number. To set the tone, I'm going to invite the Canadian Tenors to come back and lead the winners to the stage with a song they composed for the Winter Olympics in Vancouver. (Applause.)
(Country Award Winners Presentation.)
STEVE CLAYTON: Congratulations to our 92 winners. A terrific achievement. We're going to be joined by Irene from Egypt here. But now I just wanted to introduce you to Charbel Fakhoury, he's our vice president from the EMEA region. Charbel, you've got over 300 partners from the region here. It must have been a fantastic week.
CHARBEL FAKHOURY: It's great to be here, that's my first. For me, we grow with partners, we create jobs with partners, and we make a difference with our innovation with partners.
STEVE CLAYTON: Terrific. And Irene, congratulations, it's great to see you up on stage there. So, how's it been for you partnering in Egypt with Microsoft this last year?
PARTICIPANT: Well, we've been partners for more than 12 years. We're very passionate about the technologies and the solutions that Microsoft has. We've been real agents of change together in our region, and we look forward to much, much more.
STEVE CLAYTON: That's fantastic. Thanks. Congratulations to all of our 92 winners. We're going to head back up onto the main stage to Jon Roskill. (Applause.)
JON ROSKILL: All right. Thank you country award winners. What a conference. That was amazing. Can you guys feel the excitement? I sure can. (Applause.) The excitement here, the excitement in the sessions, and the excitement at the parties last night. I got out to La Tam (ph). Anyone out there from La Tam? (Cheers, applause.) We were there with the partners from Paraguay and Uruguay and Mexico, Dominican Republic, all sorts of partners.
All right, so I said today is about bringing it together. Day One, we had Steve Ballmer. Steve Ballmer came out and he showed us the future that is happening right now. And he had Tami Reller helping him. Tami showed us the Windows 7 success that's going on with partners today and the amazing partner opportunities as we set up for “Windows 8.”
Day Two was about recognizing the opportunity. The opportunity -- we had the business executives set up that opportunity around public cloud, private cloud, and the existing on-premises business that we need to continue to drive.
Day Three today is about seizing that opportunity, and MPN is a huge part of that. MPN is a great resource, a great resource, but some of you are not taking full advantage of it today.
As I traveled the last year and spoke with many partners, you told me about the areas that you found most valuable, and I'd like to go ahead and highlight four of them for you. First, marketing. Marketing drives the top of the sales pipeline. We have the Marketing Resource Center for you. The Marketing Resource Center is full of a range of materials that are literally at your fingertips to run your own campaign.
We highlighted Pinpoint yesterday. Make sure your Pinpoint profile is up to date in the Pinpoint online catalog.
The second thing partners mentioned is the Learning Center, the second thing is the Learning Center. The Partner Learning Center allows your people to get online and instructor-led content, and these courses help your technical and business people stay business relevant, stay up to speed with the latest Microsoft technologies. So, the learning center is super, super important.
The third area is the Microsoft software we grant you to use through the internal use rights. This benefit is unmatched in the industry. Literally, tens of thousands of software that you get to run your own businesses. Use it to run your business while getting the practical, hands-on experience using Microsoft software. And you also get to take those hard costs out of your own business. Use the cloud, IUR rights, use the cloud to sell the cloud. Use the cloud to sell the cloud.
Now, cloud partners, the ones who have been making the transformation over the last year or two, cloud partners tell us they love Intune, they love the Intune benefit, but they wish they had more. So, I'm excited today to announce the changes to the Internal Use Rights benefit for Intune that grows this benefit substantially. We're taking Cloud Essentials benefit from 10 seats to 25 seats, and we're taking Cloud Accelerate from 25 seats to 100 seats. What do you guys think about that? (Applause.)
Finally, number four, partners that use the MPN technical support tell me they get a lot out of it. Some partners take great advantage of this benefit, but many of you don't. Support helps you better serve your customers and helps you drive higher customer satisfaction with them. Each of these benefits adds substantially to your business. So, I encourage you to get out there and take full advantage of them.
So, now as one business executive to another, I'd like to take a step back for a moment and talk about what we've done the last two days and where we're going.
Over the last two days, we talked about the need to focus on public cloud, private cloud, and our existing on-premises business. But ultimately, what we're discussing is a set of shared business outcomes that we work on together. Growth, profitability, and marketplace relevance. Growth, profitability, and marketplace relevance. And there's a relationship between those three, but we believe that relevance is the key.
History is littered with companies that fail to recognize fundamental industry change. They fail to transform in time to remain vibrant and relevant. Last year we transformed MPN and we transformed it to establish an enduring structure that is rooted in customer needs. Customer needs are linked directly to Microsoft workloads, and those workloads define and drive the MPN competencies.
The new MPN is crafted to offer flexibility within a consistent framework. MPN evolution will be driven by three things: Market forces, advancing Microsoft technology, and new opportunities in the channel. But the MPN framework as it exists today is structured to embrace change. Expect us to manage change on a steady, predictable cadence.
Major changes will be announced in July, and they will go live no earlier than October. This gives you an opportunity to be able to plan for your own businesses.
Let me give you an example of how MPN is going to evolve. We've shown you at this conference the huge channel opportunity in communications. Partners investing in VOIP are asking for help from MS MPN to drive their business and differentiate themselves in the marketplace.
So, today we are announcing the new communications competency. The communications competency is a direct response to the next billion-dollar opportunity for Microsoft. You asked for it, we listened, go get it.
Advancing Microsoft technologies offers a second example. Just as System Center and Hyper-V have integrated and grown together, partners have told us there's an opportunity for us to streamline the competencies in this area. So, today we're announcing the systems management and virtualization competency, we're merging those two competencies into one. (Applause.) Yeah. I've had a lot of partners ask me about this, okay? This is exactly how we plan to manage change inside MPN, in a predictable cadence that allows you to plan your businesses around it.
So, MPN is transformed, but we've also, as you've seen, transformed our product portfolio for the cloud. Over the last three years, we've invested $9 billion a year; that is far more than our competitors do in R&D, $9 billion. (Applause.) Three years ago, we redirected all of that engineering resource to the cloud, and you've seen the results of that through the demonstrations you saw over the last two days.
We deliver an amazing product portfolio, absolutely amazing. I challenge you to show me anyone out there that has a deeper, broader, more integrated software portfolio than we have today. We've got the best software portfolio in the industry. It targets public cloud, it targets private cloud, and it helps you continue to deliver on your on-premises needs through partners.
And the key word in that last sentence is "partners." We are investing $5.8 billion, $5.8 billion into the partner ecosystem in FY12 to ensure you have the support you need. A significant portion of that $5.8 billion is going into channel incentives. Our old incentive model rewarded just the transaction, it was designed to reward just the transaction.
Our incentive model now is designed to reward your efforts across the sales cycle. Again, based on partner feedback. The new pay-for-performance model, it recognizes your efforts in every area of the sales cycle. And, again, everything we're doing here applies to on-premises, private cloud, or public cloud solutions.
The partner reaction has been very positive, but what do you guys think? $5.8 billion? (Applause.)
But you've asked us for me. You've asked us to broaden our incentives, to cover more workloads. So, today I'd like to announce the new Lync solution incentive program. (Applause.) You've heard a lot about Lync, really exciting. So, we're going to increase the incentives for partners that lead with Lync as their communications solution, whether on-premises or in the cloud. This brings the power of our solution incentive program to Microsoft's next billion-dollar business.
Now, to fully realize the opportunity and win together, we need to think longer term. We're moving from a world of transactions to life-cycle solutions. We're moving from a world of one-time revenue opportunities to revenue annuity streams. This brings real benefit in terms of revenue stability and business resilience, and we've done significant modeling on this in partnership with lots of partners. A partner that offers cloud services usually includes integration, migration, and training services alongside their cloud offering as well. This is very similar to traditional on-premises solutions, but what differentiates the cloud solution is the annuity revenue stream that continues to accrue to that partner of record.
As partners serve more customers, the amount of your annuity base increases, delivering growth, profitability, and stability. The benefits are great, but we know that this transformation is not easy. Last year, we piloted a number of programs to help partners with business transformation. And what we've done now is we've packaged up the most successful programs into self-paced online content.
Today, I'm announcing the rollout of some business transformation workshops. In addition to the online material that you'll find -- guess where? -- up on MPN in the Learning Center. In addition to the online material, we're going to invest a million dollars into instructor-led workshops. This is another benefit that will help you on your transformation of your business to the cloud.
So, that's what we're investing, but your investments make a big difference too. Turns out, the partners who invest more make more. And if you think about it, it's logical. Partners invest more, make more. They make 28 percent more revenue per employee and they make 68 percent larger deal sizes. Significant numbers.
Partners making this transition with us are enjoying significant impact on their business. Let me tell you about one firm that's made the transition. NewsGator, a gold ISV with product offerings that span the entire Microsoft stack from Azure to Office 365. Let's hear a bit more about NewsGator.
(NewsGator Video Segment.)
JON ROSKILL: (Applause.) NewsGator, they're doing it, they're kicking it. An incredible story, great growth, great profitability, incredible marketplace relevance.
So, let me summarize our transformation to the cloud. We transformed MPN. We've transformed our product portfolio to the best in the industry, and we've transformed our channel incentives. As I said earlier, our joint business priorities, they are aligned around growth, around profitability, and around staying relevant to our customers in the marketplace.
Our strategic advantage is you, the partners. Your success is our success. Winning together with you is the way we are going to win in the marketplace.
As I said yesterday, I believe that together we are being massively underestimated, massively underestimated. You here at WPC, you are the elite of the Microsoft program. We have the best partner program in the world, we have the richest, broadest cloud offering, enabling the largest cloud-enabled software portfolio in the world, the opportunity in front of us is just amazing.
Let's go out and win it together, let's all be NewsGators. Thank you very much.
STEVE CLAYTON: So I'm down here on the show floor. We've been hearing about the cloud all week. I'm here with Danny, a very successful cloud partner of ours from the Netherlands. Jon has just been talking about this notion of using the cloud to sell the cloud. So, what's been your experience? How are you guys at Wartel (ph) using the cloud to sell the cloud, Danny?
PARTICIPANT: Well, Microsoft Holland made sure we make the most of our MPN benefits. So, basically we migrated over our CRM on-premises environment to the cloud. We're currently totally online, and of course Office 365 and Windows Intune. So, Office 365 is used for project management and sharing documents with our customers, and Windows Intune, which I really love, especially the announcement that we're going up to 100 seats. We're going to transform it into managing our own internal PCs.
STEVE CLAYTON: Fantastic. So, there you go, use the cloud to sell the cloud, a great kind of partner experience here from the Netherlands.
So, we are going to head back up to the main stage. I'm going to kick things off with KT.