Recapping WPC 2015 in 11 Notable Quotes
Microsoft gave partners a lot to chew on last week during its Worldwide Partner Conference (WPC). Here's a recap of the major themes of the show through 11 notable quotes by Microsoft executives that highlight implications and opportunities that will reverberate through the channel for Microsoft's fiscal 2016.
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"I hope you realize this is the single biggest investment we're making in expanding our channel for cloud, and we hope you participate with us."
--John Case, Corporate Vice President, Microsoft Office
It would be impossible to overstate what a big deal Cloud Solution Provider (CSP) is going to be over the next year. Although it got a soft launch a year ago, CSP had its real debutante's ball at the Orlando WPC last week. The amount of support in the vendor community is impressive, with companies like Odin, AppDirect, Tech Data and Ingram Micro making serious pushes to enable broad partner participation in CSP. Many of the Office 365 syndication partners are all-in already, as well.
For many Microsoft solution providers, CSP is the cloud program they've been asking Microsoft to provide since about 2009. The partner can control the customer billing, unlike the Advisor model, and the partner pays for the seats on a monthly basis just like the customer, unlike with Open.
For more detail on CSP, see RCP's July cover story.
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"As a community, it's important for us to have, I think, a conversation this morning about this: What's going on around the world when it comes to this issue of trust? What do the events of the last year mean? And most importantly, what together can we do to advance the cause of ensuring that the world can trust the technology that is being created?"
--Brad Smith, General Counsel and Executive Vice President
The Snowden revelations have put major U.S.-based technology companies on their heels with consumers, business customers and governments, especially outside the United States. In his first WPC stage appearance, Smith, Microsoft's top lawyer, tackled the issues involved in a balanced speech that was well-received by the partner audience, which included a large contingent of non-U.S. partners. Going through specific examples that illustrate the tensions in Microsoft's responsibilities to governments, businesses and consumers, Smith laid out principles and commitments for Microsoft going forward. He also provided details about three Microsoft lawsuits against the U.S. government in the last two years.
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"There is no other ecosystem that is primarily and solely built to help customers achieve greatness."
--Satya Nadella, CEO
Nadella set a high bar for what distinguishes the Microsoft ecosystem from other partner programs. He spent much of his keynote explaining what Microsoft stands for. Some of the principles he set for Microsoft provided the foundation for Smith's speech later in the week.
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"In Outlook 2016, there's a very cool feature that I love now, and it basically utilizes the 'most recently used' across Office right in your attach segment here. So if I click this, you can see these documents are right there that I just worked on." [Huge applause break.] "I know! It's crazy."
--Bryan Roper, Executive Demo Lead at Microsoft
Roper was the breakout star of the WPC keynotes. In his hipster hat, Roper stole the show as the demo guy during Windows and Devices Group Executive Vice President Terry Myerson's keynote. Partners cheered highlight after highlight during Roper's detailed walkthrough of the best features of Windows 10 and Office 2016.
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"There seems to have been some question about our commitment to SharePoint in the past year. ... [At the Ignite conference] I saw a lot of comments that said, 'I didn't hear a lot about SharePoint. Julia only said SharePoint a couple of times, what's that mean?' Today, I'm here to say, 'SharePoint. SharePoint, SharePoint, SharePoint, SharePoint, SharePoint!' We are absolutely committed. We have a fantastic SharePoint Server 2016 coming out."
--Julia White, General Manager, Microsoft Office Division
White effectively put any doubts about Microsoft's commitment to on-premises SharePoint to rest with a flare reminiscent of Steve Ballmer's famous bit about "Developers! Developers! Developers!"
Specifically, White called out use of the same codebase for SharePoint on-premise as in the cloud, hybrid-optimization, data loss prevention, e-discovery and the ability to tap Office Graph cloud capabilities.
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"And you know what, Microsoft has really big ambition for what we can achieve, and we have really big ambition for what you can achieve with us. And that last point is really important, because...92 percent of all Microsoft revenue is through our partner ecosystem versus 39 percent for the rest of the IT market."
--Phil Sorgen, Corporate Vice President, Worldwide Partner Group
Sorgen quoted IDC figures tracking how much revenue in the industry goes through the channel versus direct. The percentage is lower than during the heyday of the late 2000s, when the quoted numbers for Microsoft were 95 percent or higher. Yet the number is still extremely respectable considering Microsoft's recent direct pushes with first-party hardware products. Meanwhile, the percentage now applies to much higher overall revenue numbers than it did back then.
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"So I've gotten this request from many of you all year: We are eliminating the requirements to track unique MCPs per competency." [Applause break.] "I'm glad you like that -- and the tracking of sales assessments, so that we can focus more on the outcomes through your performance, which means I need to give you better ways to track your own performance."
--Gavriella Schuster, General Manager, Microsoft Partner Network.
Competencies have been a big deal since Microsoft transitioned the Microsoft Partner Program into the Microsoft Partner Network a few years ago. Microsoft seems to be de-emphasizing competencies now. The main competencies you hear about now are the four, soon to be five, cloud competencies. (The fifth, an Enterprise Mobility Suite competency, is slated for late September.) The CSP program will, in many ways, function as a new landing place for many partners, and, on the Azure side, certifications are bringing a new way for partners to declare hybrid solution expertise. The move to remove unique training MCP requirements unwinds much of the forced partner specialization that was engineered into the MPN competencies.
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"So what Office 365 represents, what Dynamics represents, we want to bring these different products today into one set of services, which are extensible."
--Satya Nadella
The word "Dynamics" there in Nadella's keynote was significant. Many partners heard a new emphasis on Dynamics, both CRM and ERP, at WPC, and then again this week in the Microsoft fourth quarter earnings call. After a period of uncertainty about how strategic Dynamics was as Microsoft partnered with Salesforce.com and apparently considered buying the company, the message from the top is that Dynamics still matters.
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"With Azure and the Azure stack, we now provide a consistent hybrid cloud platform that can be used to run any workload, whether it's Windows Server or Linux. With our new Operation Management Suite, you can now manage those workloads no matter where they run, whether it's on-premises in an existing customer datacenter, in a service provider datacenter or in our public cloud."
--Scott Guthrie, Microsoft Cloud and Enterprise Group
As he worked his way through a long list of Microsoft cloud services intended to illustrate how uniquely thorough a set of offerings Microsoft has, Guthrie mentioned what might have been a jarring word in any other year: "Linux." But Linux and other open source workloads were stars of the 2015 WPC. Microsoft had an open source pavilion in the expo center and recognized open source partner award winners.
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"In our commercial business we continue to transform the product mix to annuity cloud solutions and now have 75,000 partners transacting in our cloud. We are also expanding the opportunity for more partners to sell Surface, and in the coming months will go from over 150 to more than 4,500 resellers globally."
--Kevin Turner, CTO
This quote is actually a cheat. It didn't come from the WPC. Turner issued the statement a few days later for Microsoft's fourth quarter earnings statement. In some ways it's more significant than anything Turner said in his WPC keynote, which was the usual mix of fiery exhortations to partners to sell more Microsoft products and digs against Microsoft's competition.
The quote above was a rare mention of the channel in an earnings release, suggesting that Microsoft's push via CSP to get partners more involved in cloud sales is strategic enough to mention to investors.
Turner also provided specific numbers for how many resellers will be brought into the new, much broader Surface reseller program. It's about 30 times as many partners.
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"We are re-orienting all our cloud competencies and our partner incentives to be based on active usage as opposed to the sale, which is an incredible shift."
--John Case
Active usage, a.k.a. consumption, is a key term for partners in Microsoft's FY16. New dashboards on the MPN portal will show it. Account managers will track it. Incentives will pay based on it. Microsoft is under enormous pressure to convert many of the cloud seats that were bundled into Enterprise Agreements and other licensing arrangements into a vital part of customers' businesses, so that those same customers don't cancel the services. That pressure is being transferred to partners and will get more intense as the fiscal year progresses.
Posted by Scott Bekker on July 23, 2015