What's Next for Microsoft CSPs: Unanswered Questions

During the special RCP editorial webcast Wednesday on "What's Next for Microsoft CSPs: Partners' Top Moves for 2019," the attendees had more great questions than we could answer during the session. I want to hit on a few of them here, as well as provide some better answers for some of the questions we did address.

For those of you who didn't attend the live event, the presentation centered on 11 key decisions that Microsoft partners need to make in 2019 and early 2020 around their participation in the Microsoft Cloud Solution Provider (CSP) program. A few highlights involved making the Direct Bill versus Indirect Reseller decision based on the new support plan purchase requirement, selecting among Indirect Providers if you go that route, whether to chase certain incentive,s and how much to emphasize developing your own intellectual property (hint: a lot). A replay of the session is now available here.

First, let's look at a few questions that we covered in the session, but that I have a little more detail about.

Do you know how a partner can switch easily from being a Direct provider to being an Indirect Provider?
Since much of the session focused on the new expenses around being a Direct Bill CSP partner, and whether it's time to consider switching to being an Indirect Reseller, one really good question that came up was about how difficult it would be to switch. I have a consultant's answer on this one: It depends.

Mainly, it has to do with how much the partner already invested in the infrastructure required to become a direct partner, the ongoing expenses of being a direct partner, how many customers the partner has under the model and how their contracts are structured. All that aside, all of the Indirect Providers are extremely aware of this opportunity and many have competitive programs to help Direct partners make the switch into their Indirect programs.

One thing that I didn't mention Wednesday that was brought up by an Indirect Provider participant in an e-mail exchange after the call is to think of it as a process. Expect that customers will move from one model to the other at different rates.

Can you do Indirect for Azure and Direct for everything else?
A related question was about mixing and matching the CSP business models. I wasn't entirely sure until pretty late in the call about the answer to this question. A Microsoft rep attending the call kindly confirmed that partners can be both Direct and Indirect. To clarify, it's not just Azure for Indirect and everything else for Direct. You can do Dynamics, Azure, Office 365 or any of the CSP products in whichever model suits your business.

Do you have rough figures for the price of ASfP or PSfP?
The new requirement that Direct Bill CSPs pay for a support package involves an annual expense, either for Advanced Support for Partners (ASfP) or for Premier Support for Partners (PSfP). There was a question about how much each package costs. ASfP is the less expensive option at about $15,000 a year in the United States. It costs less in some geographies. PSfP is much more customizable, but Microsoft documentation shows it starting at nearly twice the price, about $28,000 in the United States. The Microsoft rep also provided this link to a partner comparison page for the service plans.

Next, there were a few questions that I completely missed in the Q&A session.

Can you describe what makes up the investment costs for Direct CSP? I've seen this ROI slide before, but what exactly are partners spending $50,000 to $1 million on?
The reference to the ROI slide was a Microsoft slide that shows how the time to profitability for Direct averages about 22 months, while Indirect is about five months. The question is about an estimated cost that Direct partners tend to spend $50,000 to $1 million. As far as I know, the source for those investment figures is an IDC e-book sponsored by Microsoft called "Partner Choice for Cloud Success: What IT Solution Providers Need to Know about the Value of Microsoft's CSP Licensing Program and the Choice of Relationship Models."

The IDC e-book describes the investments as consisting of several things. One is building a billing and provisioning model using the Microsoft APIs or paying a third-party platform for a white-label version. Another is building first-level customer support capabilities, including hiring support professionals. It can also include either building out a customer-facing cloud marketplace or paying a third-party provider to use a marketplace platform. The range is so large because it goes from managed service providers who may already have some of those capabilities in place to distribution partners who are setting themselves up to be Indirect Providers with their own networks of Indirect Resellers.

Note that the e-book predates the requirement for Direct CSPs to buy support packages.

Which margins are moving from 8 percent to 6 percent?
My slide deck focused a little too much on using the Halloween-related Chiller font in an effort to be entertaining and not enough on the relevant details. Sorry about that. I was talking in that slide about the change coming to the incentive rates for Core Office 365 for Indirect Resellers, starting in January. That rate was 8 percent paid on billed revenue from July through December. It will be 6 percent from January 2019 to June 2019.

Finally, there were a handful of questions that came in through the console that I didn't tackle because I didn't know the answer. I'll be looking into these over the next few weeks. If you have any thoughts or information about them, let me know at [email protected].

  • How are CSPs managing cash flow risk? I.e., end client does not pay, Microsoft is still owed?
  • I thought the 10 percent incentive on Azure RI has gone. Can you provide the Microsoft reference doc around that?
  • Our company has ASfP. It's been very difficult opening tickets that are routed to the right support engineers at Microsoft. Does anyone have the proper way to open advance or premium support tickets?

Thanks to SherWeb for sponsoring Wednesday's session and to everyone who participated! Again, check it out here if you missed it. Looking forward to keeping the conversation going about this critical and evolving partner program.

Posted by Scott Bekker on November 01, 2018 at 2:13 PM0 comments

IBM Takes a Chance on Cloud with Red Hat Buy

IBM may be a distant third place in the cloud market, but its executives are betting that there's still room in the cloud gold rush for Big Blue.

Case in point: IBM's plan to spend a whopping $34 billion to acquire Red Hat, which it unveiled this past Sunday. That bid represents a 63 percent premium over Red Hat's share price.

Calling the acquisition a cloud market game-changer, IBM Chairman, President and CEO Ginni Rometty predicted that with the deal, "IBM will become the world's #1 hybrid cloud provider, offering companies the only open cloud solution that will unlock the full value of the cloud for their businesses."

With earnings season winding down, analysts at Synergy Research just detailed market share estimates for spending on cloud infrastructure services late last week. As with every other quarter for as long as the market has been tracked, Amazon Web Services (AWS) is the clear No. 1, with Microsoft at a distant but strong No. 2. According to Synergy, the market share numbers are AWS 34 percent, Microsoft 14 percent, IBM 7 percent, Google 7 percent and Alibaba 4 percent.

Rometty laid out IBM's view of the state of the cloud market, specifically that it's not too late for a big move. "Most companies today are only 20 percent along their cloud journey, renting compute power to cut costs," she said in the company's acquisition announcement. "The next 80 percent is about unlocking real business value and driving growth. This is the next chapter of the cloud. It requires shifting business applications to hybrid cloud, extracting more data and optimizing every part of the business, from supply chains to sales."

Such descriptions of the opportunity are similar to the "digital transformation" rhetoric coming out of Microsoft over the last year.

How Red Hat changes the game for IBM isn't completely clear.

Much of the current market share position has to do with the massive datacenter buildouts of the last decade. Red Hat has been an open source software provider for several of the public cloud players, rather than a front-running datacenter infrastructure player. And IBM says the company remains committed to building and enhancing the partnerships Red Hat has with major cloud providers, going on to cite existing arrangements with AWS, Microsoft Azure, Google Cloud and Alibaba.

"IBM is committed to being an authentic multi-cloud provider, and we will prioritize the use of Red Hat technology across multiple clouds," said Arvind Krishna, senior vice president of IBM Hybrid Cloud, in a statement. "In doing so, IBM will support open source technology wherever it runs, allowing it to scale significantly within commercial settings around the world."

That there is still room for innovation and competitive shakeups in the cloud is undoubtedly true. As Microsoft's and Google's ongoing investments show, none of the main cloud players is willing to cede the market to AWS. Whether IBM's acquisition of Red Hat changes its positioning in that market, however, remains to be seen.

Posted by Scott Bekker on October 29, 2018 at 11:53 AM0 comments

Azure: Winding Down or Gearing Up?

The revenue growth for Microsoft Azure year in and year out is nothing short of stunning.

Microsoft logged yet another quarter of very high double-digit growth for Azure revenues in the earnings report that was released Wednesday for the first quarter of its July-to-June fiscal year.

The figure is a 76% gain over the year-ago quarter. That's impressive, especially considering Microsoft is starting from a relatively high number as the No. 2 public cloud provider after Amazon Web Services (AWS).

Yet the number is slightly worrying to financial analysts, who note that the Azure growth rate figure has been marching steadily downward over the last few years. By comparison, the growth rate for the same quarter a year ago was 90%; two years ago it was 116% for the quarter.

While analysts on the earnings call Wednesday evening were complimentary overall about the quarter, which beat expectations on both profits and revenues, they asked CEO Satya Nadella and CFO Amy Hood repeatedly about Azure and came at it from many different angles.

Nadella and Hood together conjured an extremely positive story about Azure's future built on three major elements.

One element is that Microsoft's hybrid approach to the cloud is not only a strategic advantage, but that analysts should be thinking about it as effectively hiding some Azure revenues. Microsoft's unique attribute, compared to major public cloud competitors AWS or Google Cloud Platform, is that the company has a huge installed base of on-premises server software customers. That legacy encouraged Microsoft to focus more on hybrid solutions that allow customers to move workloads to the cloud at their own pace and to integrate all kinds of services between the on-premises servers and the cloud platform. Over the last year, Microsoft has moved to bring its licensing model in line with that hybrid approach, especially via Azure hybrid benefits.

Hood made that case in an answer to one analyst. "I tend to focus...on the 'all up' server and product [Key Performance Indicator] because the Azure hybrid benefits that exist with Windows Server and SQL Server are really valuable to customers if they want to move to Azure on their own terms," Hood said. "If we start to focus on one number or the other, I think we're missing the fact that our customer method and go-to-market is actually through the overall product portfolio."

Nadella hammered the theme home in response to a different question. "We don't think of hybrid as some stopgap in a move to the cloud," he said. "[It's] not just the old workloads but most importantly for new workloads, and that's where we're seeing some very significant good feedback loops in shaping even our future roadmap. And this is a place where we are leading."

Another basic element of Microsoft's Azure story is one of driving cost out of the platform. Hood said commercial cloud gross margin percentage increased 4 points to 62%, driven by significant improvement in Azure gross margin. Nadella added that the margin improvements are crossing Microsoft's product boundaries as more of the infrastructure is unified. "For the first time, what you see across Microsoft is really one platform, which spans all of these businesses and all of the margin structures that are there represented in it," he said.

The other element is Microsoft's rapid buildout of Azure services. Nadella enumerated some of what he described as 100 new Azure capabilities introduced in the previous quarter (mostly at Microsoft Ignite), including Azure Confidential Computing, Azure Sphere and Azure Digital Twins. He pointed out that new and higher-level services should generate higher margins over time.

Several key Microsoft partners didn't need convincing that Azure has a lot of growth ahead of it.

"It's no surprise that this quarter was another strong one for Microsoft, given its recent push to expand Azure's features and its hybrid cloud capabilities," said Dux Raymond Sy, CMO of AvePoint, in a statement about Microsoft's earnings. "Over the past five years, the cloud industry has become the most competitive IT marketplace we have ever seen, but one of the most exciting things that we have seen from Microsoft is that it has managed to stay unique among its many competitors in the space."

Ryan Duguid, chief evangelist at Nintex, a process automation and management platform provider and Microsoft partner, also feels Microsoft's competitive position with Azure is strong after seeing the quarterly results.

"Azure was always going to be at the heart of Microsoft's transformation and while it got off to a rocky start by focusing on platform versus infrastructure services, it is now clear that it was a winning strategy, and that they're doing a great job of making up lost time against Amazon when it comes to hosting VMs," Duguid said in an e-mail. "Nintex bet heavily on Azure from the onset, and the platform continues to enable us to drive a rapid pace of innovation while the experts at Microsoft focus on delivering scalable, reliable, cost-effective infrastructure."

Posted by Scott Bekker on October 25, 2018 at 9:26 AM0 comments

Partners Liked Gates' New Role in 2014, And He's Still At It

When Microsoft elevated Satya Nadella to CEO in 2014, the company simultaneously announced that co-founder and chairman Bill Gates would be stepping down to a regular seat on the board but taking on a bigger tech advisory role for Nadella.

"I'm thrilled that Satya has asked me to step up, substantially increasing the time that I spend at the company," Gates said in a welcome video accompanying Nadella's promotion to CEO in February 2014. "I'll have over a third of my time available to meet with product groups, and it will be fun to define this next round of products, working together."

At the time, partners told RCP in a quick, informal poll that they really liked that idea. As we noted in our March 2014 cover story, "CEO 3.0":

A majority felt Bill Gates' decision to spend more time at Microsoft helping Nadella would be a positive, and half described themselves as "reinvigorated about Microsoft" as a result of the C-level and boardroom changes, which also included Gates being replaced by former Symantec Corp. CEO John Thompson as chairman.

Although you don't hear about the tech advisory role very often anymore, partners who approved of Gates getting more technically involved in Redmond should be happy to hear that he's still at it.

Most of the headlines Gates makes these days relate to his philanthropic work with the Bill and Melinda Gates Foundation or to his default role as a public intellectual. He's frequently quoted on topics ranging from technology trends to global health to economics to environmental issues to his current reading list. Only rarely is Gates deployed by Microsoft as an intentional public spokesman. Usually any Microsoft-related comments he makes come up in the context of interviews about the Foundation.

Nonetheless, in a pre-recorded Wired video segment about key moments in Gates' life and career that was posted last week, Gates confirmed that he's still putting in time with engineers and technical strategists in Redmond.

"Even to this day I do some architecture things on the various products," Gates said during the segment.

Microsoft hasn't been secretive about Gates' continuing technical involvement. In an early 2017 interview, Gates revealed that his attention within Microsoft was focused on natural language, virtual assistants and various ways to be more contextual about user information. Rather, it's been more of an issue of emphasis.

When Nadella took over as CEO, Microsoft made a point to communicate that Gates would be getting more involved on a week-to-week basis with the company than he had been during the latter part of Steve Ballmer's tenure as CEO.

At the time, Gates' technical advisor role was widely viewed as a critical step to reassure investors that Nadella, who was less well-known on Wall Street than he was in Silicon Valley, would be able to handle the CEO job.

Most of those concerns have evaporated as Microsoft stayed near the forefront of a historic run in tech stocks over the last few years. Microsoft's stock value has roughly tripled on Nadella's watch. "He's done a good job of repositioning the company in investors' minds," Ballmer said of Nadella during an interview with Bloomberg in July.

Microsoft's unstated reason for involving Gates -- to calm investors -- is no longer as important. On the other hand, the surface-level reason -- leveraging one of the sharpest minds in the business of technology -- is as strong as ever.

Posted by Scott Bekker on October 22, 2018 at 12:09 PM0 comments

Paul Allen's Legacy at Microsoft

Paul Allen went on to do many significant things in his life, but the achievement that provided the springboard for so many of the rest of his activities was the fortune he amassed as the co-founder of Microsoft.

Primarily, Microsoft is associated with the other co-founder, Bill Gates, whose personality, drive and talents formed the company's identity, and who remains involved in the company's direction on a part-time basis.

On the other hand, Allen, who died of complications of non-Hodgkin's lymphoma at age 65 this week, has been out of day-to-day activity at Microsoft since 1983, and off the board since 1986. His time at the company ended before Windows became a dominant product, before the Internet emerged as an opportunity for the tech industry and a threat to Microsoft's central position in PC computing, before the public ugliness of the antitrust case, before Microsoft's rise as a major enterprise software player and before the company emerged as one of the handful of cloud megavendors.

That said, the 43-year-old company still bears a few important markers left by Allen himself.

Paul Allen (source: Microsoft)

One is the name. Calling the company "Micro-Soft" was Allen's idea. The hyphen was later dropped, but four decades later, the company still goes by a name reminiscent of a different era in tech. In 1975, "microcomputers" and "micro" were sexy terms in computing. Software remains an element of the name, as well, even in an age in which Microsoft has become more about the cloud and hardware has also become a significant piece of the business.

A bigger legacy of Allen's is his role as a catalyst for getting the slightly younger Gates focused full-time on the computer business. They spent countless hours together at the private Lakeside School  in Seattle working on a teletype terminal connected over a phone line to a time-share computer. In the small scrum of like-minded Lakeside students spurring on each other's enthusiasms for the technical possibilities of the systems, Gates and Allen were especially close.

Living in Boston a few years later, Allen grabbed his friend Gates from his college dorm at Harvard to show him the January 1975 issue of Popular Electronics with its Altair 8800 on the cover. "This is happening without us!" Gates recalls Allen declaring in a successful effort to rally Gates to prioritize seizing the moment over getting a college degree.

"Microsoft would never have happened without Paul," Gates said in a statement earlier this week. Counterfactuals are difficult to prove. It's hard to imagine that given his interests, Gates would not have seen the magazine himself or seized the moment in some other way. But without the timing enabled by the personal history and chemistry between those two individuals, who knows?

Another Allen imprint on Microsoft's culture is his role in one of the most famous coding death marches in technology. After spotting that article about the Altair, Gates and Allen called the maker of the device and told him they were essentially finished with a version of Basic for it. They hadn't started.

They spent the next few weeks working around the clock. Allen, who was to do the demo, realized on the plane to Albuquerque that they hadn't written a loader, a requirement for their demo, and whipped one up on the  plane. At the time, they were calling their company "Traf-o-Data," but the core of Microsoft was there. As Stephen Manes and Paul Andrew wrote in their biography of Gates, "The development tools Allen put together in this era would serve as the core of Microsoft's language efforts for years."

Finally, what Allen realized was "happening without" them was the democratization of computing that drove Microsoft's growth strategy -- enabling a PC on every desktop -- for most of its corporate history.

Outside of Microsoft, Allen lived the dreams enabled by an early fortune for a technology titan. He invested in successful commercial space flight ventures, bought professional sports franchises, commissioned massive yachts, founded newsworthy companies and backed scientific research projects. Ultimately, he may be more widely remembered for his role in sports or those other activities, but whatever Microsoft would have been called without Paul Allen, it certainly would have been a different company.

Posted by Scott Bekker on October 18, 2018 at 10:01 AM0 comments

Surface Makes a Dent in the U.S. PC Market

It's time to start talking about the Microsoft Surface in discussions about top-selling PCs.

Gartner this week published its preliminary quarterly results for PC unit shipments in the third quarter of 2018. On the U.S. list, Microsoft ranked fifth for the quarter, with a 4.1 percent share of the market.

It's a long way from No. 5 to No. 4. According to Gartner, Microsoft shipped 602,000 units in the quarter. Apple, by contrast, moved more than 2 million units in the quarter for fourth place and a 13.7 percent share. The top vendor for the quarter, HP Inc., sold more than 4.5 million units and held a 30.7 percent share in the U.S. market.

In terms of movement, Microsoft is heading in the right direction, with 1.9 percent year-over-year growth for the quarter, a period when Apple dropped by 7.6 percent.

Lenovo, powered by its joint venture with Fujitsu, vaulted 22 percent in the United States, and a 10.7 percent gain worldwide put the computer maker in first place on Gartner's global list for the quarter. Dell rounds out the U.S. top five in second place.

While Microsoft may be a somewhat distant fifth, the results suggest that individual Surface models would rank among the most popular Windows devices. Microsoft has only a few types of Surface -- mainly the Surface Pro, Surface Book, Surface Laptop and Surface Go -- compared to dozens of lines from its established PC OEM partner/competitors.

The backdrop is a relatively flat U.S. PC market, where overall shipments dropped 0.4 percent, with business PC demand nearly offsetting declines in mobile PC shipments. Because Gartner defines Google Chromebooks as outside the PC market, its figures don't include the double-digit growth of those devices in the United States.

The Surface is gaining ground at a good time for Windows PCs in the commercial sector. Gartner expects business demand for Windows PCs to remain strong. Referring to the global market, analyst Mikako Kitagawa said in a statement, "The PC market continued to be driven by steady corporate PC demand, which was driven by Windows 10 PC hardware upgrades. We expect the Windows 10 upgrade cycle to continue through 2020 at which point the upgrade demand will diminish."

Extended support for Windows 7 formally ends on Jan. 14, 2020. That operating system retained a narrow lead over Windows 10 for the most popular operating system in September, according to Net Applications. That measure and recent Microsoft statements suggesting enterprises were about halfway through their Windows 10 migrations both indicate that there is a lot of remaining potential for Windows 10-based hardware upgrades.

Posted by Scott Bekker on October 12, 2018 at 11:27 AM0 comments

Private Equity Firm To Acquire Imperva for $2.1 Billion

Private equity technology investment firm Thoma Bravo LLC continued its sweep of security and other key channel companies with an agreement to acquire Imperva Inc. for $2.1 billion.

Imperva, which specializes in protection of data and applications on-premises and in the cloud, announced the agreement on Tuesday. The deal would leave the current executive team in place and keep its headquarters in Redwood Shores, Calif.

That "buy and build" approach is common for Thoma Bravo, which defines the investment business model on its Web site as advising firms it invests in "to create value through operational improvements, internal expansion and accretive acquisitions."

Chris Hylen, president and CEO of Imperva, described benefits of the deal beyond the value to Imperva stockholders. "The company will have greater flexibility to focus on executing our long-term strategy," Hylen said in a statement.

In the same statement, Chip Virnig, a partner at Thoma Bravo, emphasized the private equity firm's experience with similar companies. "Our expertise and track record investing in cybersecurity fits squarely with Imperva's long-term roadmap, and we look forward to advancing the Company's market position in this rapidly-growing security segment," Virnig said.

Thoma Bravo owns or holds a major stake in several companies that are important business partners for many Microsoft partners. Those companies include Barracuda Networks Inc., Centrify Corp., Continuum Managed Services, McAfee LLC, Nintex Global Ltd., Riverbed Technology Inc. and SolarWinds Inc.

The Imperva board has a 45-day "go-shop" period to solicit other acquisition proposals as part of the acquisition agreement. The parties expect the transaction to close in the fourth quarter of 2018 or in the first quarter of 2019, assuming Imperva's stockholders approve and all regulatory hurdles are cleared.

Posted by Scott Bekker on October 11, 2018 at 12:26 PM0 comments

Windows Update Process Suffers Another Black Eye

Over the weekend, Microsoft pulled the latest version of Windows 10 and other version 1809 operating systems, just four days after releasing them.

"We have paused the rollout of the Windows 10 October 2018 Update (version 1809) for all users as we investigate isolated reports of users missing some files after updating," Microsoft said in a statement on its support site. As of Monday afternoon, Microsoft had not released a new update.

Affected platforms included Windows 10, version 1809; Windows Server, version 1809; Windows IoT Core, version 1809; Windows 10 Enterprise LTSC 2019; Windows 10 IoT Enterprise LTSC 2019; and Windows Server 2019.

Microsoft was advising customers who lost files to contact the company immediately. Meanwhile, the company warned anyone who had manually downloaded the installation media not to install it.

Despite the emphasis on the phrase "isolated reports," the decision to initiate such a major disruption by interrupting downloads indicates Microsoft has serious concerns about the code that's been released. There is always a warning to back up files before initiating an update, but a file deletion issue ranks among the most serious types of problems that an upgrade can introduce.

Pulling back the update is another black eye on the major overhaul of the update process for the Windows 10 era, which has been marked by a generally popular operating system but frustration over lack of control over updates and concerns about the speed of release cycles and testing quality issues.

The previous Windows 10 update, April 2018, ran into delays and post-release problems, and the patch release process is also taking serious criticism from patching experts, including Microsoft Most Valuable Professional (MVP) and moderator of the Patchmanagement.org listserve Susan Bradley.

Nobody is saying that quality control of a Windows operating system releases is easy. Microsoft currently claims a 700-million-user installed base for the operating system, and that OS runs on hundreds of hardware configurations and with thousands of other software applications and cloud services.

This latest incident should suggest to Microsoft that it's time to swing the pendulum back a little from the pressures in technology to "move fast and break things" toward being more deliberate, cautious and exhaustive in the pre-release process for Windows.

Posted by Scott Bekker on October 08, 2018 at 11:12 AM0 comments

Microsoft Spruces Up Its Surface Line, Debuts Financing Plan

Microsoft hosted a media event in New York City on Tuesday to reveal three new devices in its Surface line of PCs, as well as complementary headphones and a new consumer financing program.

The new devices were the Surface Studio 2, the Surface Pro 6 and the Surface Laptop 2, all of which became available to pre-order on Tuesday. The Surface Pro 6 and Surface Laptop 2 will start shipping on Oct. 16. The Surface Studio 2 starts shipping Nov. 15.

The enhancements rolling out for the various Surfaces were mostly of the speeds, feeds and color variety. A new black option is coming to the Surface Pro 6, which is also available in platinum, and to the Surface Laptop 2, which is also available in platinum, burgundy and cobalt blue.

Major enhancements to the Surface Pro 6 include an upgrade to 8th Generation Intel processors, which bring quad-core processors to the 2-in-1 category for a 67 percent performance bump; a 13.5-hour battery life and an 8MP auto-focus camera, according to Microsoft executives. Prices for the new Surface Pro 6 range from $899 to $2,299 depending on the choices of 8GB or 16GB of memory, an Intel Core i5 or Core i7 processor, and storage options of 128GB, 256GB, 512GB or 1TB. Prices don't include the Surface Keyboard, so buyers are looking at a minimum of an additional $100 to use the device as intended.

The Surface Pro 6 (left) and Surface Laptop 2 in the new black color option. (Source: Microsoft)

For the Surface Laptop 2, Microsoft's more traditional clamshell laptop, the processor upgrade to Intel's 8th Generation leads to an 85 percent performance bump over previous models, while battery life clocks in at 14.5 hours, according to Microsoft. Prices on the Microsoft Store site start at $999 for 8GB of RAM, an Intel Core i5 and 128GB of storage. The top-end configuration of 16GB of RAM, Intel Core i7 and 1TB of storage costs $2,699.

The Surface Studio 2 sports the same gargantuan 28-inch screen as the previous version, but moves two generations forward in processors to Intel 8th Generation for a 50 percent performance bump, and features more brightness and contrast in the display. The high-powered system for creative professionals is available in three configurations. The entry level has 1TB of storage with 16GB of RAM at $3,499. The top-of-the-line model costs $4,788 for 2TB of storage and 32GB of RAM.

The main teaser from the Tuesday event was Surface Headphones, which aren't available to order yet and are expected to ship by the holidays.

As to why Microsoft needs an offering in the crowded premium headphone category, Microsoft product design guru Panos Panay said, "We built Surface Headphones to complete the Surface experience." The $349 price tag will deliver 13 levels of ambient noise control, 8 "beam-forming" microphones for phone calls and voice commands, and PC-specific features like voice activation of the Cortana digital assistant and automatic pausing of video when the headphones are removed.

Also Tuesday, Microsoft unveiled a new way for consumers to pay for Surface devices, which tend to carry a premium price tag compared to OEMs' Windows laptops and 2-in-1s. Called Surface All Access, the monthly pricing option includes a Surface device and an Office 365 subscription with a no-interest 24-month payment plan. The financing is provided by WebBank and is administered through Dell Preferred Account, rather than through Microsoft Financing.

Starting monthly bundle prices included a Surface Go Bundle for $24.99, Surface Laptop Bundle for $46.63, Surface Pro Bundle for $47.87, Surface Book 2 Bundle for $54.96 and Surface Studio Bundle for $150.79. The program, which begins on Oct. 16, comes about a month after Microsoft ended new enrollments into its consumer-focused Surface Plus Program.

Posted by Scott Bekker on October 02, 2018 at 5:04 PM0 comments

Former Microsoft Channel Executive Huddleston Dies

Ron Huddleston, a senior channel executive at several high-profile technology companies, including Microsoft, where he was a central figure in the major channel reorganization last year, died on Friday.

Huddleston's current professional role was chief partner officer at Twilio, the San Francisco-based cloud communications platform company.

"Twilio is heartbroken over the loss of Ron Huddleston, a dear friend, respected colleague and leader who passed away Friday morning," Twilio said in an e-mailed statement. "Ron joined Twilio to lead the partner organization earlier this year and has made an indelible impact on the organization and team here at Twilio. He is already and will continue to be greatly missed. We hold Ron and his family in our thoughts."

Huddleston's assignment since joining Twilio in February had been building out an ecosystem of ISVs, systems integrators and resellers for the 10-year-old company. Three months ago, he unveiled the launch of Twilio Build. That Twilio partner program combined his professional passions of enabling partners and creating marketplaces, which was his specialty at Salesforce.com and took up much of his attention while he was at Microsoft.

Ron Huddleston at the 2017 Microsoft Inspire conference.

Judson Althoff, executive vice president for the Worldwide Commercial Business at Microsoft, was Huddleston's supervisor at Microsoft until last December. In a LinkedIn post, Althoff called Huddleston friendly, open and optimistic.

"I learned over the weekend that my long-time friend, Ron Huddleston, passed away. Ron was young, and his death untimely," Althoff wrote. "Ron and I worked together at both Microsoft and Oracle, and he also held leadership roles at Salesforce.com. For as long as I have known Ron, one thing was always clear: He was passionate about his work, especially the cultivation and nurturing of relationships with partners. He spent more than 20 years dedicated to partner success, helping partners grow and partner ecosystems thrive."

Huddleston's tenure at Microsoft was relatively brief, but left significant organizational marks.

He started at Microsoft before his first days on the Microsoft Dynamics team in the summer of 2016 via phone conversations with Althoff. In a 2017 interview with RCP, Huddleston explained how those conversations, as well as talks with CEO Satya Nadella and former CEO Kevin Turner, helped define a new structure for Microsoft's channel.

Those plans started taking concrete shape in January 2017 with the formation of One Commercial Partner (OCP), a new organization to which Huddleston was named corporate vice president.

Huddleston integrated developer evangelism much more tightly into partner operations and began work on industry maps/solution maps/catalogs, which are regional lists of go-to partners for different solution areas.

The OCP structure also included a major re-alignment of partner-facing job roles within Microsoft in the areas of build-with, sell-with and go-to-market. The OCP partner management job role changes took place against a backdrop of a broad and tumultuous reorganization of Microsoft's worldwide field organization in the summer of 2017. Huddleston went on an indefinite family leave from Microsoft in December 2017.

Posted by Scott Bekker on October 02, 2018 at 2:49 PM0 comments

Apply Now for the 2018 RCP Rocket Awards

  • Access the 2018 application form here.

We are taking applications starting today for the 6th annual RCP/Rocket Awards sponsored by Redmond Channel Partner magazine and Revenue Rocket Consulting Group.

The 2018 award is open to all U.S.-based Microsoft partners, with annual revenues between $5 million and $100 million and whose innovative business strategies resulted in sustained growth over three years (2016, 2017 and through the first three quarters of 2018).

Those strategies could involve applying new technologies, addressing an adjacent vertical, sharpening a vertical focus or even honing business processes. The 2017 winner, AgileThought LLC, for example, dialed down its hiring process to support very fast growth in billable hours. See the AgileThought story here and visit our RCP Rocket Awards page for more details on the innovative business approaches employed by previous award winners.

The application process this year consists of two steps. First, we're using Survey Monkey as the mechanism in which to submit your initial responses electronically. You can access the survey application here. Second, upon reviewing these initial submissions, we will select a few finalists to interview for a deeper dive into their application submissions, and from which we will determine the winners. The deadline for the initial submission is Nov. 7, 2018.

Joining me on the panel for evaluating all of the submissions are Mike Harvath, CEO of Revenue Rocket Consulting Group, and other distinguished guests with hands-on experience in growing an IT services business.

Entries will be evaluated on two key criteria:

  • First, the results. What did your company achieve over a three-year period in terms of revenue, profit and other relevant metrics you deem appropriate?
  • Second, the strategies. What unique combination of strategies did you employ to generate the results you achieved?

The components of the initial survey include:

  • Revenues for 2016, 2017 and so far in 2018.
  • Net income as a percentage of your revenues this year.
  • Brief description of your company's business type.
  • Status in the Microsoft Partner Network.
  • Brief description of the strategies that led to this growth.

For the interview, which we plan to conduct in mid-to-late November, we will probe deeper into your business performance, key strategies, lessons learned and any other aspect of your growth strategies that drove your business.

The winners will be notified in early December. In addition to an award plaque, winners will also be the focus of an article on RCPmag.com, and a donation will be made in their name to a charity of their choice.

Start thinking about getting your entries ready, and good luck. Apply using the survey form here. For any questions, e-mail [email protected].

Posted by Scott Bekker on October 01, 2018 at 10:21 AM0 comments

Tire-Kickers Have a Lot of Previews To Test from Microsoft Ignite

Microsoft introduced a plethora of new technologies for customers and partners to test and evaluate this week in the form of significant previews for a new version of its flagship database, several big advances in the Azure public cloud, and a number of more targeted cloud enhancements and tools.

The batch of preview releases came during the Microsoft Ignite conference this week in Orlando, Fla. While the preview technologies aren't yet supported or touted as production-ready, their delivery marks the key milestone when a product goes from slideware to something concrete. (For coverage of technologies hitting general availability at Ignite, see this roundup.)

SQL Server 2019
The highest-profile public preview at Ignite is SQL Server 2019, the latest release of one of Microsoft's most significant server platform products. The preview is classified as a community technology preview (CTP). Getting the most attention in the new version of the database server is SQL Server Big Data clusters. Other enhancements include database performance enhancements, encryption improvements to protect data in use and significant indexing improvements.

See related coverage for details of the new features and a Q&A about SQL Server Big Data clusters here and here.

Big Azure Advances
A key Microsoft initiative for securing the Internet of Things (IoT) also reached the public preview stage. Microsoft first unveiled Azure Sphere in April, but at Ignite, Microsoft announced the preview for the solution, which includes a microcontroller unit known as the Azure Sphere MCU, a Linux-based Azure Sphere OS and an Azure Sphere Security Service. An Azure Sphere development kit is immediately available for prototyping from seeed for $85. Inspired by the explosion of IoT devices, their increasing connectivity to the Internet and other networks, and the emergence of IoT botnets like Mirai, Azure Sphere is Microsoft's attempt to be a principal provider of a framework for helping device makers and users secure IoT.

Another significant security enhancement effort in Azure is a public preview coming on Monday, Oct. 1, for an encryption-in-use solution called Azure confidential computing. Data is commonly encrypted at rest (by encrypting the files or disks on which it is stored) and in motion (via protocols such as HTTPS, SSL, TLS and FTPS). The trickier challenge is to protect data during processing, known as encryption in use. Microsoft at Ignite announced the public preview of a new Azure virtual machine family, which it calls the DC series and is based on Intel SGX technology.

Another public preview that is less than a month away is Azure Digital Twins, which is expected on Oct. 15. The big idea is a service for creating a virtual representation of a physical environment. Part of the IoT platform, an Azure Digital Twin will give partners and customers a platform to create comprehensive digital models and spatially aware solutions, Bert Van Hoof, partner group manager for Azure IoT, explained in a blog post: "Most IoT projects today start from a things-centric approach, but we've flipped that around. We've found that customers realize huge benefits by first modeling the physical environment and then connecting (existing or new) devices to that model."

The concept has been associated with industrial equipment, such as machines and engines, but Microsoft's new vision has more to do with creating smarter spaces out of offices, schools, hospitals, banks, stadiums, warehouses, factories, parking lots, streets, intersections, parks and plazas.

Azure Stack, Microsoft's private cloud version of its Azure public cloud that is sold by certified hardware partners, will become more container-friendly with a public preview of Kubernetes support. Kubernetes is the popular, open-source system for automated deployment, scaling and management of applications in containers. Azure Stack customers will now be able to install Kubernetes using Azure Resource Manager templates.

Targeted Updates
Microsoft declared a handful of other technologies as public previews at Ignite.

  • Ad-hoc data exploration is the focus of Azure Data Explorer, a speed-optimized indexing and querying service for analyzing event data from apps, servers and edge devices.

  • A preview will be available Oct. 1 for Azure SQL Database Hyperscale for single databases, with an auto-scaling capacity of a whopping 100TB per database.

  • Seven months after making Azure DataBricks generally available, Microsoft unveiled several updates to the Apache Spark-based analytics platform for building collaborative Big Data and artificial intelligence solutions. Among those is a preview of Azure DataBricks Delta, a transactional storage layer atop Spark to improve data consistency and read access.

  • A new Azure Managed Disks offering known as Azure Ultra SSD Managed Disks is designed for latency-sensitive workloads through the use of solid state drives.

  • Azure Files is being updated with a high-performance, SSD-backed storage tier known as Azure Premium Files.

  • Storage capacity for Azure Managed Disks is being expanded in certain regions to now cover 8, 16 and 32TB capacities. Those storage sizes will apply to Premium SSD, Standard SSD and Standard HDD.

  • An application acceleration platform used internally for Bing, Office 365 and Xbox will be available as the Azure Front Door Service (AFD). It is designed for delivery, control and monitoring of global microservice-based Web applications.

  • A solution for adding governance capabilities called Azure Blueprints is available in preview and will be included in the Azure platform at no additional cost once it is generally available.
  • The Azure Resource Graph brings the ability to explore Azure resources through the Azure Portal, PowerShell or CLI for efficient inventory management.

  • Supporting DevOps teams efforts to ship more quickly with better compliance and auditing is a new Azure Policy tool, with additional features that are unlocked when it's used in combination with Azure App Insights and Azure Monitoring.

  • The constant imperative to predict, monitor and contain Azure usage costs gets a native tool as Microsoft previews Azure Cost Management as a component of the Azure Portal for Enterprise Agreement customers. The capabilities were previously available as a standalone platform from Cloudyn.

Posted by Scott Bekker on September 27, 2018 at 9:18 AM0 comments