Allison Watson: Microsoft Worldwide Partner Conference 2006

Remarks by Allison Watson, Corporate Vice President, Microsoft Worldwide Partner Group

Microsoft Worldwide Partner Conference 2006

Boston, Massachusetts

July 11, 2006

ANNOUNCER: Ladies and gentlemen, please welcome Allison Watson. (Applause.)

ALLISON WATSON: Good morning. Thank you, and thanks for joining me in Boston. It’s going to be an incredible conference. Steve was completely amazing. He set me up perfectly, because my role at this conference is to be the person that’s framing up how we’re going to go about working with you to create a channel ready to deliver People-Ready Businesses.

I want to start though in the same that Steve did by saying thank you. I’m honored to be here with you today, I’m honored that you took the time to travel to Boston and take time out of your busy schedules, because you make such a difference.

It’s a little known secret that I have absolutely the best job at Microsoft, because I get to work with and learn from all of you every day. And so thank you again for making my job and my life incredibly fun, and thank you for your commitment to Microsoft in an ongoing way.

I asked last year on stage to hear stories about what’s going on in your world and how your business is changing, and I thought I’d share a few of those with you this morning. First from Japan, we heard from Hiroaki Tezuka, President and CEO of Alphatech Solutions. They’re a Gold Certified systems integrator who was formerly a partner of IBM. Over the past few years they’ve been focusing their business on the Microsoft platform, and have increased the number of Windows Server and Exchange Server migration deals. They’ve worked hard with their local partner account manager, Hirobumi Shimasaki. They’ve developed joint sales materials and case studies, conducted monthly sales and technical training and increased the number of certified engineers. They’ve participated in solutions briefings at the Executive Briefing Center in Tokyo. And most importantly they saw a 21-percent increase in their revenue last year as a result of their partnership with Microsoft.

Secondly, our partner from Canada, Andy Papadopolous, who is the CEO of LegendCorp, a Gold Certified Systems Integrator in Toronto. He writes, “We are so successful because of our PAM Anne Markoff, who takes the time to understand our business, tell us what Microsoft is focusing on and why, work with us to mass a strategy and evangelize us within Microsoft. Microsoft has already researched the markets and figured out how its products meet specific business needs. We don’t have to reinvent a lot of wheels, which save us time and money. Microsoft’s willingness to treat us as a true partner has meant the difference between being in business and not being in business. The Microsoft Partner Program is the reason our business has grown exponentially in the last decade.”

And finally, Nicolás Bruno Hauff Kruger, CEO of Fillgap, in Mexico, a Gold Certified Business Solutions partner providing vertical applications to the hospitality of retail industry, he writes, “Our Project Accounting business, the Dynamics SL, is maturing and bringing us new customers. Our Dynamic NAV business around verticals for hospitality and retail are giving us a strong position in the marketplace. Our PAM Ruben Ruiz Gamboa has been working closely with us, helping us close deals. We’ve participated in a go-to-market and the Through Partner Marketing Programs, which have been helpful in planning and executing our marketing efforts. Our Salomon revenue is up 15 percent, our Navision revenue is up 50 percent, and in the past year we’ve significantly increased the number of certified professionals in our organization.”

Real results from deep engagement with Microsoft, that’s what it’s all about.

There are 7,000 partner stories today. I hope to hear every one of them. Please send me mail, allison.watson@microsoft.com. I want to hear them so that I can celebrate them with you again in the upcoming year.

So ours is a dynamic industry, it is always changing, and we’ve got to participate and make choices as the business changes. Steve highlighted with you the technology changes coming, I want to highlight a few other changes that are impacting the decisions that you’ll make about your businesses in the upcoming year.

The first, Steve reminded us all there are 600 million users of Microsoft Windows, and over 400 million paying users of Microsoft Office. This in and of itself has the potential to change our world dramatically over the next 18 to 24 months. IT spending is on the rise. That is great news for everyone in this room, it’s certainly great news for everyone on this state.

However, with the IT spending on the rise comes incremental expectations from our customers about having real value delivered from Microsoft products, and more importantly having real value delivered that makes impact in a business. Steve talked and framed up that the software as a service revolution is just at the beginning. There are going to be new opportunities for partners, there’ll be opportunities in the 20 million small businesses out there that do not yet have a server. And this is an incredible opportunity, yet is something we have to grapple with as we think about how the world is changing and how our businesses change with it.

And finally, I’ve heard it from you again and again, there is a skills shortage in the marketplace. You’re grappling with do you have enough technical engineers of the right quality to deliver against the wave of innovation you just saw presented earlier. Do you have enough salespeople who can speak in the true language of the customers? And are you ready with your marketing campaigns and your marketing materials in a way that can make you truly compelling in the marketplace? You have choices about where you invest, who you partner with and when and where to make big bets.

Steve framed it very well about why you need to bet on Microsoft. I want to frame it up even further because we take it a level further when we look at the equation that Microsoft bases its entire philosophy on for going to market.

Our approach is simple, it’s a formula: great R&D that you see coming is our responsibility. With that great R&D we can’t be as successful in the marketplace without our partners and their partner services.

But in order for us to be successful with partners it’s not good enough just to have partners, it’s incredibly important to have a very healthy and vibrant ecosystem. So I’ve heard from you and have worked with many of you over the last several years to try to frame up what are the opportunities such that we ensure that we’re creating a profitable set of business opportunities to partner with Microsoft, so that we can ensure this equation comes to light.

There’s really two views when we think about profitability, and you can count on us, by competencies, to take these views consistently now and into the future. The first is around the macroeconomic view. We take a look, and you’ll see on the chart on the left hand side a view today of Microsoft software addressable revenue opportunities by competency in FY ’06. And then the view of the graph below it is all the way up to FY ’10. That is the addressable opportunity in our marketplace for which we need a well-qualified, well-skilled, successful and profitable set of partners to help us deliver and go capture that opportunity.

Now, secondly, we say how does that matter to me individually as a partner business owner? And where it gets real is when we look at two what we call the microeconomic view.

So, as a result of research this year, we’ve started benchmarking how is Microsoft doing with its partners versus competitive partners relative to all elements of partner profitability. We’ve built a model that has 14 Key Performance Indicators of partner profitability for services partners, for ISV partners, for reselling partners, and we are absolutely holding ourselves accountable to benchmark that our partners have better chances than partners of competitors at every step of the way.

With that information then, for every new business that we go into, every new product, every new opportunity, we’re taking the time to understand what are the elements that drive profitability in a particular business? And you can see several of them listed on the slide: what we will be looking at, what should you expect in terms of net profit, what should you expect in terms of your time to first deal, time to break even or time to ROI? And we’ll publish blueprints and guidelines and models to help you get there. We’re committed to driving your success.

So what do we have to do together to create the People Ready Businesses? I’ve heard from you over the course of the year these four core imperatives that we must do together so that we’re ready to go to market. First, Steve emphasized that it’s really important that we reach out to the right people. It’s different if you’re calling on a CEO of a large company, if you’re calling on a sales and marketing executive of a midsized company, or if you’re calling on a small business owner/manager. So we have to have our marketing and our sales and our conversational materials aligned so that you have the right conversations with the right person in their role at the right company at the right time.

When you have those conversations you have to have compelling conversations, and Microsoft’s got to make that easy and simple and powerful for you to do so. You then need to back that up with a field of skills in your organizations to deliver against the value that you want to create.

And more importantly, you’ve got to build partner networks because in terms of delivering against the wave of innovation you just saw, very few of you will do all of that delivery of innovation within your own company. So creating the partner networks is critically important.

And finally, I hear it often enough from you, “Allison, what are you doing to bring our solutions more visible to customers in your marketplace?”

So these are the imperatives we’ve got together to deliver a People-Ready Business.

How are we responding? First, we talked about having the right conversations. We are introducing customer campaigns. You saw the set of eight customer campaigns, five targeted at business decision-makers and three targeted at IT decision makers, plus four for small business owner/managers. You saw those campaigns listed at the end of Steve’s slide deck. These campaigns are designed to target customers by role. They will allow you to target them around a customer pain point by role, by company size, and finally target specifically which competencies we’re going to be working with to deliver these campaigns out into the marketplace and our global subsidiaries.

Let’s take an example. Julia, you might be calling on, would be a midsized manufacturing marketing executive. In terms of preparing for a sales call for her or marketing out to people of her type, you might use our Find, Use and Share Information customer campaign targeted at business decision makers. She happens to be in a manufacturing company, so you also want to customize that campaign specifically to the manufacturing vertical, and you’ll start to see us across our verticals get deeper in our verticals so that you can have compelling conversations. And finally, we’ll be directive with you about which competencies we think will be best suited to running different campaigns.

Now, campaigns, if perfectly executed, will result in meetings with prospective clients. So we talk about having powerful conversations. We are introducing today, as a result of the beta test that we’ve done with our internal sales force and several partners over the last 12 months, three important optimization models for the three core infrastructure campaigns. One is core infrastructure, one is business productivity and one is application platforms. These models are based on research coming out of Gartner, Dataquest and others that have evaluated what are the real pains of decision-makers in companies making decisions about their core infrastructure and what they need to get done.

The models that we’ll be rolling out for you starting this year and into the future center first on an assessment. What you see here listed is you’ll be able to assess, in the core infrastructure campaign, with a prospective customer, where they are against their core imperatives like identity and access management or security and networking. Imagine the power of having that kind of conversation directly with a CIO about core infrastructure instead of having to explain which version of Active Directory are they on and have they rolled out Exchange 12 for the mobility features yet. You now have the ability and tools to have conversations directly in the language of customer pains.

But within the language of the customer pains then we’ll have a prescriptive way to provide a roadmap for the products that the customer is on today, and that will achieve the customers’ goals over what period of time in the future. And partners then will have a way to say what needs to precede what relative to a proposed implementation and there are ROI tools so you have a quick and easy way to deliver a roadmap for your customers about how to achieve their goals in their language and an ROI model attached.

But in creating People Ready Businesses this is not enough. When you’ve got the conversation done, you’ve got to show it off. And I’d like to invite Pat Esposito from IMPACT Management to join me on stage to show you what I mean. (Cheers, applause.)

PAT ESPOSITO: Good morning, Allison.

ALLISON WATSON: Good morning Pat, welcome.

PAT ESPOSITO: Thank you.

ALLISON WATSON: It’s a big group out there.

PAT ESPOSITO: Yeah, I’m excited to be here for another Partner Conference.

ALLISON WATSON: Excellent.

Pat, tell us all a little bit about IMPACT Management.

PAT ESPOSITO: Well, IMPACT builds collaboration and BI Solutions. We leverage our information worker and our BI and data management skills, work with the outstanding team of Microsoft folks in New York, New Jersey. (Cheers, applause.) And in less than five years we’ve grown from a Registered Partner to a Gold Certified Partner. The investments you’ve made in the program have certainly paid off in our bottom line and making IMPACT People Ready.

ALLISON WATSON: Excellent. All right, well, Pat, I said we’re going to show it off. So, let’s go show it off and stop talking here.

PAT ESPOSITO: Let’s do it.

ALLISON WATSON: All right. So Pat, you’ve been one of our special beta testing partners here in the U.S. over the last couple of months, as we begin to announce something new today. We’re announcing the Demo Showcase for the People-Ready Business. And we said we’re going to show it off, Pat, so let’s talk about — tell me about a sales call upcoming that you might be preparing for so we can show people how we’re going to use this Demo Showcase.

PAT ESPOSITO: Great. How about one situation we have? We’re going in to see a customer who wants to build their very first corporate communication portal. I know that we’ll be meeting with the CEO and some folks from finance. You have to help me.

ALLISON WATSON: OK. So, let’s see. We’re going into our Demo Showcase for the People-Ready business. We’ve got customer roles because we’ve talked about how about important it is to talk to people in People-Ready businesses. I heard you say CEO and finance, and notice that, as we’re doing this we’re getting some new data. And you said, let’s see, a mid-sized customer.

PAT ESPOSITO: That’s right.

ALLISON WATSON: And SharePoint Portal Server you mentioned.

Oh, and note here if you were also interested in using our new customer campaign technology, here, in fact, is the Find, Use and Share Information campaign framework built right within the Demo Ready Showcase.

So, Pat, I see here several scenarios. Tell me a little bit about what will happen now that I’ve gotten these scenarios ready out of the Demo Showcase.

PAT ESPOSITO: What I would do is take the scripts, I’d prepare for them, I’d add some personalization and custom branding to really drive some impact to the customer, hit on a couple of those points that are really important to their business.

ALLISON WATSON: Good. Well, so I know you’ve been using it for three months. Tell me a little bit about the results that you’ve had with this toolset.

PAT ESPOSITO: The tools have been great. One situation, we were presenting with an impromptu opportunity to meet a customer. We had 30 minutes to prepare for a meeting. And we were able to use the tools to really get to the meeting and have something with power value to the customer.

Another way we’re using it, we’ve combined it with Live Meeting. And we’ve found that that shortens our sales cycle about 10 to 15 percent.

ALLISON WATSON: Wow.

PAT ESPOSITO: It’s been a fantastic tool.

ALLISON WATSON: Super IMPACT. Pat, thank you so much.

PAT ESPOSITO: Thank you.

ALLISON WATSON: Good luck with the Demo Showcase.

PAT ESPOSITO: Thank you. (Applause.)

ALLISON WATSON: So, seeing is believing and the Demo Showcase for the People-Ready business we’re launching today at the Partner Conference. That Demo Ready Showcase will be available to you in several places throughout the conference. First, you’ll be able to see it inside the Partner Velocity Challenge. And if you participate in the challenge, you’ll get copies of the WPC Edition version today. All other partners will receive it in the September box. It will be updated at launch with the Office and [Windows] Vista bits as well.

Additionally, we’re running hands-on labs so that you can get your hands live with it today so that you can learn the rich power of the different demonstration environments. We’ll also be showing you customer case studies of real-life customers who’ve had partners call on them with the Demo Showcase, and you’ll see vignettes of that throughout the day. And finally, on day three, we’ll be showing you some of the live demos from within Demo Showcase. So, this is a really important tool for us to have you show it off to your prospective customers.

So in addition to showing it off, we need to talk about having the right skills in the marketplace. So, it’s important for you to have skills. I talked about it at upfront. So first, solution selling and campaign skills, we talked about upfront having enough certified and capable solution sellers in your marketplace. It’s important that you have an opportunity, and we’ll be rolling out deeper solutions sales training and solutions sales training by campaigns, both in our Partner Learning Center and in onsite locations in every subsidiary around the world.

Additionally, Microsoft marketing, we’re bringing the marketing discipline of Microsoft out to our partners. We’re launching the Microsoft Partner Marketing Advisor online on the Microsoft Partner Portal today. This advisor online will assist you in understanding the campaigns and, in fact, helping you create a marketing platform for your year around the campaigns and around the models that I’ve rolled out with you this morning. Additionally, for those of you, because you’ve asked me for it, we’ve got Marketing 101 training as you bring new employees into your organization to assist you with marketing.

And then finally and most importantly, I am very proud to announce our investment in Partner Skills Plus. Partner Skills Plus is a significant investment to bring 47,000 additional certified people into the worldwide base of our partners in the next 12 months. We’ll be investing around the new Microsoft certified logos, including technology specialists across all of our technology platforms, the certified IT professional with a deeper level of professional skill, and now the new introduction of the Microsoft certified architect. So, local subsidiaries around the world will have access to training benefits for you to take advantage of bringing net new skills into the marketplace to address the IT skill shortage we see today and coming into the future. (Applause.)

But skills in your company may not be enough. We talked about it, and I’ve mentioned it on stage for several years up here, and it’s really starting to pay off. In order to deliver the value to the customer by role, by vertical, by size across the Microsoft platform, you’ve got to have the network set up to deliver it up. This is an example of three different customer campaigns targeted at large or small businesses, an example of the competency that you may want to formalize your partner network with in order to be able to deliver as one face to the customer on behalf of the Microsoft assets and the Microsoft brand. So, I encourage you to do it.

But, encouraging is not enough. I think its real results that pay off. Let me tell you about the Canada IAMCP chapter. They took my advice seriously last year. They put a goal amongst their 500 members. And I’m happy to report, as of last week, that they made 300 partner-to-partner connections amongst their membership in the last 12 months. And, those 300 partnerships translated into $7 million of incremental services revenue for those partners who engaged. This can really pay off. Thank you, Canada. Thank you, IAMCP for driving it. (Applause.)

I also want to tell you a story and let the partners speak for themselves about how this partner-to-partner networking can pay off. Let’s hear from Pebblestone [Fashion]..

(Video segment.)

(Applause.)

ALLISON WATSON: When I talk about velocity and I talk about building the partner ecosystem, the power is within yourselves. Use the conference, use the networking sessions. Remember today, they’re all 30 minutes behind. And, use the power to build your network.

So, the other thing I hear from you is, “Allison, where are you going to put me in front of your customers?” I am very proud, after last year at this Partner Conference, announcing that we would launch Solution Finder as a new technology this year, based on you bringing your solutions into our solution profiler database.

We’ve launched it, starting in March, and I want to give you a sampling of the places it is today up and running throughout microsoft.com. On the sites that you see here today, and we’re still in the early stages of our roll-out, we have over 200,000 users a month visiting these sites, based on their particular need or interest. What you see in the center is the People Ready response based on People Ready advertising. We’ll bring people in and directly on these business imperatives that they are trying to drive, they can search and find partner solutions based on what they are trying to drive.

If they want to search by their product of interest, let’s say they’re interested in Dynamics NAV or Dynamics GP, they’ve got a way up on these Dynamics Web sites to go directly into the Partner Finder, Solution Finder from that site.

Similarly, we’re doing it by customer size on our mid-market, small and enterprise portals, and as another example, over by industry. So, we’ve moved the public sector marketplace, if you will, under the Solution Finder umbrella.

It is our express intent to make Solution Finder the business and solution catalog across all of the Microsoft assets and properties, as well as extending it out into a broader Web format in years to come.

The call to action for you: Thank you for those of you who put 10,000 solutions into this database of high quality who met our bar in the last year. However, there are 10,000 of us in the room today, so I would think at least one to two solutions per partner, and I should have 20,000 solutions in the database by the end of the Partner Conference this week.

So, I appreciate your investment in us, in getting your solutions ready with quality, and appreciate what we’re going to do is bring customers to your door.

So, I talked to you about building a People-Ready Business, having the skills to deliver, having the right conversations, having compelling conversations, showing it off and building your partner network. But there’s something I haven’t hardly spoken about at all. And, you know it’s really, really, really important to driving our business next year. With the release of Microsoft Office and Microsoft [Windows] Vista, there’s over 600 million users of these products in our marketplaces today. How and who is going to be the first to show them the power of this technology? It will be us. It’s our imperative to become the first, best users of this technology.

In fact, I challenge the Partner Account Managers who came the pre-show briefing with me yesterday to go out after this conference is over and participate in each account manager doing five demo load show tests so that you can bring the products, [Windows] Vista and Office in their beta format, into your organizations today. You have to be passionate. You have to be empowered. You have to understand why [Windows] Vista and Office are going to change the world, because you and us together are going to be the ones that do it.

So, I will be your first best. If you call your PAMs, and they’re not available to join you for those load tests, mail me. I’d love to fly out and get a team dispatched. We’ll get the product loaded across your entire organization. And, I’ll be the first to catch the wave with you. (Applause.)

So please join me in catching the wave, and I look forward to an incredible year together. Surf’s up, dude.

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