In-Depth

The 5 Biggest Challenges for the New Microsoft Channel Chief

Jonathan Roskill takes over the Worldwide Partner Group at a time of overlapping, critical transitions.

Everything is up in the air between Microsoft and its channel. The company is embarking upon a fundamental shift in the business model to cloud delivery of services as well as infrastructure. Few in the channel -- arguably few even within Microsoft -- can say they really have a strong theory for how the changes will play out in the partnering model over the next five years.

Everything is up in the air between Microsoft and its channel. The company is embarking upon a fundamental shift in the business model to cloud delivery of services as well as infrastructure. Few in the channel -- arguably few even within Microsoft -- can say they really have a strong theory for how the changes will play out in the partnering model over the next five years.

Adding to that tidal shift is an entirely new partnering model in the form of the Microsoft Partner Network (MPN), which brings changes that are on pace to go into effect in October. As if that isn't enough for the channel to grapple with, Microsoft senior management threw some more instability into the mix by choosing this moment to transfer Allison Watson to a different job after eight years as the head of Worldwide Partner Sales and Marketing.

Enter Jonathan Roskill, Watson's replacement as corporate vice president in the post. Microsoft gave Roskill one week on the job to get ready for the Microsoft Worldwide Partner Conference (WPC), and then he was "drinking from the firehose," in the old Microsoft vernacular -- serving as master of ceremonies and keynote speech presenter at the largest Microsoft partner conference yet, and getting swept into a whirlwind of dozens of meetings with hundreds of partners, as well as analysts and press including Redmond Channel Partner.

The challenges of the job at this time are legion. RCP sat down with Roskill at last month's WPC in Washington, D.C., and talked with attendees of the annual Microsoft confab. What follows are some of the top challenges that Roskill faces.

Roskill makes his debut as the Microsoft channel chief at the company's annual Worldwide Partner Conference in Washington, D.C., last month.

1. Introduce Himself and Win Trust

If you're a technology vendor CEO, partners want to know that you're brilliant and that your products will stay a step ahead of the competition. In a partner executive, they want to know they can trust you. If Microsoft starts to get a reputation as undercutting or devaluing its partners, its days at the center of the biggest vendor-based partner network in the industry will be short.

Allison Watson was a known quantity. RCP conducted a reader poll in the first half of July to get a quick snapshot on partners' feelings about the unexpected leadership change. Nearly 70 percent of the 109 respondents thought she did a good or very good job. That said, Roskill probably doesn't face a backlash of disappointment with the change at the top. Only 7 percent said they disagreed with Microsoft management's decision that it was time for new leadership, while 47 percent felt it was time and 46 percent said "maybe."

Roskill walks into the job with a clean slate. In the survey, 65 percent of respondents were not familiar with his track record. Of those who had heard of him, impressions leaned to the positive side -- 14 percent had heard good things, 21 percent had heard mixed things and less than 1 percent had heard bad things about Roskill.

Well aware of the requirements, Roskill moved aggressively in Washington, D.C., to start filling in the blanks, sharing anecdotes during and in between keynotes.

In one example that smoothly blended personal history with the momentous changes happening in the channel, Roskill said: "That brings me to a quote. 'To improve is to change; to be perfect is to have changed often.' It's a quote from Winston Churchill. Now, you heard yesterday that I'm British, and I've lived here since I was three, so I don't have the accent. But my grandfather was a British naval historian. And he opened something called the Churchill Archives at Cambridge University, which makes this Churchill quote both personally interesting and professionally relevant to me."

An engineer by training, Roskill made the switch to marketing while at Digital Equipment Corp. He joined Microsoft in 1993 and previous roles included developer and .NET Enterprise Server marketing. Most recently, he was corporate vice president of the U.S. Business & Marketing Office for Microsoft, North America.

He also brings a different style to the role than Watson did. Watson was the closest thing the Microsoft channel had to a celebrity -- complete with ever-present handlers, big entrances and elaborate, funny short movies similar to the ones Bill Gates used to show at his keynotes. Roskill's style, at least at his first WPC, was much more low-key and approachable. For example, in a press conference with media and analysts, he circulated the room, talking briefly to everyone there before making some opening remarks and taking questions. Partners we spoke with who had met with Roskill at WPC reported similar, positive experiences, finding him sharp and willing to listen.

2. Sell Partners on the Microsoft Cloud

Responding to an open question about his priorities in the interview with RCP, Roskill went right to the cloud. "I'm thinking a lot about, obviously, the cloud, and looking at what's out there right now and what stage of completion it's at. There's clearly more stuff to be done, but actually from what I've been seeing at this conference I feel pretty good about that," Roskill said.

In the first half of calendar year 2010, Microsoft has signaled more strongly than ever that the company is "all in" when it comes to the cloud. The company used the partner conference to hammer that message home for partners, and the job falls to Roskill to guide, drag, lead or follow the various parts of the Microsoft partner community to the Microsoft cloud.

Roskill sought reaction to Microsoft announcements during WPC keynotes from audience members including Harry Zarek, CEO of Toronto-based Compugen Inc.

"His ride is going to be very different from what it's been for the last few years as they try to push partners into online services and there's a lot of changes," says Paul DeGroot, an analyst with Directions on Microsoft. "Nothing I've heard here this week really changes my view that the traditional Microsoft partner who sells technical skills will have difficulty finding their footing in a future that places a premium on sales and marketing scale."

In the RCP survey, partners said the most important things Microsoft can do for them in the cloud are provide better margins, provide programmatic resources to help partners launch cloud practices, and develop packaged services that partners can resell around cloud offerings. Roskill had the fortune of inheriting a few initiatives on those fronts that he could roll out at WPC.

Microsoft cranked up the Microsoft Dynamics CRM Online margins to 40 percent in the first year with 6 percent recurring for FY 2011 -- up from 18 percent in year one and 6 percent recurring in FY 2010. In his WPC keynote, Roskill rolled out several major programs and resources to help partners get on the cloud -- Microsoft Cloud Essentials, Microsoft Cloud Accelerate, Business Builder for Cloud Services and Cloud Profitability Modeler.

While the Business Productivity Online Suite, Dynamics CRM Online and similar offerings represent a major business model shift for partners, in some ways they represent the tame changes coming with cloud computing. The implications of the major Microsoft datacenter buildout to support the Windows Azure platform stand to bring much more fundamental changes. Thinking around corners with partners and guiding them to mutually lucrative landing zones in that future will be a major part of the job over the next few years.

3. Manage Up

Internally, a channel chief is judged on how well he gets the vendor message out to the channel. Partners' receptivity to that message, to a large extent, depends on how much they've been able to manage that message with their input, and how hard they think a channel chief will fight internally on their behalf.

Microsoft CEO Steve Ballmer and COO Kevin Turner said all the right things about partners at WPC, although Ballmer raised eyebrows with a quote that seemed to minimize partner concerns about margins with a "blah, blah, blah."

But cloud computing presents huge temptations to take offerings to customers directly. Just because Ballmer and Turner say partners are their best route to the cloud doesn't mean they're convinced of it. Roskill will have to consistently make a legitimate case upward within Microsoft that the company's massive partner network is a huge advantage -- especially if the traditional Microsoft Windows and Office lock-ins begin to fade in importance.

Only time will tell if Roskill can hold his own on behalf of partners when Ballmer and Turner are tempted to undermine partners. We put the impossible question to him on the record of whether he could stand up to Ballmer and Turner, and Roskill chose to answer it this way: "Steve and Kevin came to me and said, 'As we look to somebody new to take this role, we want you to take it, and we're excited about you as somebody with business strategy background who can be a voice of the partner back up into the businesses.' They want that energy up to the business groups."

4. Manage an Inherited MPN
When Allison Watson took the job in 2002, she had the opportunity to create a new Microsoft Partner Program from scratch. Roskill, on the other hand, inherits an MPN -- basically Watson's 2.0 version of the program -- on the brink of being rolled out after three years of research, effort and evangelism.

Some partners would like to see the effort stopped in its tracks. In the RCP survey, about 30 percent wanted Microsoft to proceed as planned with the MPN's full launch in October. Some 27 percent wanted a temporary review, 16 percent wanted a full-scale delay with reworked details and 16 percent wanted Microsoft to start over.

A do-over is not in the cards, Roskill told RCP. "I haven't heard anything yet that makes me feel like I should stop any trains that are rolling right now," he said. "If I was going to, I would've done it before the conference."

Several tweaks were introduced at WPC, and Roskill said he's already considering modifications down the road.

The biggest change announced at WPC was a name change from Advanced Competency and Competency to Gold Competency and Silver Competency. Requirements and benefits will be the same, but the name change brings back the "Gold" branding that thousands of partners have built upon since October 2000. Similarly, the number of certified professionals required to attain the Gold version of the Midmarket Solution Provider Competency was reduced from four to three. It's the only competency that doesn't require four unique people to attain Gold.

The requirement that partners who want to attain multiple competencies have four unique certified professionals for each is a major sticking point for small and midsize partner companies, and an issue that Roskill got an earful about at WPC.

"I don't think any of them are really concerned about losing their Gold status," he said. "What they're concerned about is they have Gold status in maybe four competency areas. Let's say they have a staff of eight people and you have to have four people uniquely certified: they'll only be able to [be Gold] competent in two competencies versus four. I've heard that and I think one of the things we need to look at as a possibility here is for us to think about whether we can do some solution-area competency. If we said, 'If you could get Gold in three of the five in Core IO, we could give you a Core IO competency' -- that's one thing that's interesting to think about."

Howard Cohen, Northeast Regional Chair of the U.S. chapter of the International Association of Microsoft Channel Partners (IAMCP), says, "I think there's a good chance they'll ultimately budge. If you look to [MPN General Manager] Julie Bennani's WPC presentation, she showed six groups of competencies." He continues: "Looking at them, they each constitute a platform group, and I think the first thing they may actually do is to relax that rule so you can use the same person for competencies within a platform. I think they're more concerned about the platform groups than they are about the individual competencies. It's not that they want to drive up body counts -- they just want to make sure the focus is there. The focus there on the platform group is pretty much the whole deal, it doesn't have to be the individual competencies themselves."

Timing is an issue. Roskill indicated he has some latitude to fix it. "Based on what we've heard here, I want to think about tuning things. I don't think we want to change anything before October. Like the solution possibility, that's something we could phase in later if we want," Roskill said.

Cohen contends the issue is more urgent among IAMCP members. "The challenge will still remain for companies that do [things like] infrastructure and messaging. Those two go together but they aren't on the same platform. Relaxing it would be a huge deal -- it would get a lot of people breathing again. The panic is still well spread. A lot of people are screaming but I think they're screaming in private," he adds.

One of many public complaints came out during a WPC session. Margaret Johnson, managing director of St. Louis-based Oakwood Systems Group Inc., has 85 people with several different practices. "We have the business intelligence team that's 10 or 12 people, and currently we have data platform competency, BI competency and performance management. Now I've got these 10 to 12 people and in order to be Gold in each [competency], I need to take them out of billing, first of all, get them trained up and tested. Some of them quite honestly might be rocket scientists when it comes to data warehousing but not very good test takers, so I'm going to have to punish those people," she said.

"I have to pick now: Do I want a BI competency or do I want a SQL competency? And we look like SQL less than BI. I think it's ugly. This really is the ugly part. Differentiation is good but not at the expense of your credibility," she added.

Beyond the thorny specifics of the competency changes and their timing, Roskill hinted that partners should also expect a fundamental simplification of MPN resources for partners overall.

"I think we need to step back and look at some of the stuff we're putting out and just say, 'How much is this collective ecosystem ready to absorb?' What we tend to do is throw more stuff at it, and what then happens is they selectively filter out what they want. What we need to do is step back, go to the customer and figure out what the right thing is for the customer -- and then go back and say, 'This is what the customers want. Let's get stuff from the marketing teams that's going to work on that space.'"

Microsoft wouldn't need to step back, though, had the company let partners weigh in on the competency changes up front, Johnson suggested. "Why didn't they ask us before they made this change, that's what I want to know," she said. "They make the change and ask us how we feel about it -- that's BS."

5. Right-Size the Network

Ultimately, Roskill inherits one of the largest channels in the IT industry, or any other industry. One major challenge will be determining if the size of that network is right.

For the last several years, the MPN has hovered fairly steadily in the range of 400,000 partners in the network, with Microsoft saying that unofficial partners boost that network to 640,000 companies. Out of the estimated 1-million-plus IT channel companies worldwide, that's a fairly impressive chunk.

With the radical changes in business models -- and with the evolutionary changes in the MPN -- Roskill will face questions about whether the interests of Microsoft are served by continuing with a huge community, better served by an even bigger community, or could actually be more effective with a smaller, more focused set.

Underneath the overall umbrella, Roskill and other channel-facing executives at Microsoft will face dozens of smaller-bore questions: Does Microsoft have the right number of Large Account Resellers, global systems integrators, Small Business Specialists and so on. Between all those challenges, Roskill has plenty to keep him almost as busy all year as he was for his second week on the job this July in Washington, D.C.