DENVER, July 10, 2007 – The Microsoft Worldwide Partner Conference 2007 opened today with a series of keynote addresses and technology demonstrations that showcase future business opportunities for industry partners. The conference, an annual event for Microsoft partners from around the world, includes three days of presentations, product- and service-specific sessions, and opportunities for structured and unstructured networking with other Microsoft partners and Microsoft team members. Over 10,000 partners, industry experts, speakers, exhibitors and Microsoft executives are attending this year’s conference.
Allison Watson, Corporate Vice President, Worldwide Partner Group, Microsoft
To learn more about Microsoft’s vision and strategy for its industry partners, the evolution of software and services delivery models, and the wave of innovation Microsoft and its worldwide network of partners are introducing, PressPass spoke with Allison Watson, corporate vice president, Worldwide Partner Group.
PressPass: What are the key developments for Microsoft partners since last year’s Worldwide Partner Conference?
Allison Watson: At last year’s Worldwide Partner Conference, I spoke about Microsoft’s commitment to creating profitable opportunities for our partners. We’ve delivered on this commitment in a number of areas. One of the key developments has been the creation of profitability blueprints, a set of solution-specific financial and monetization models that Microsoft has developed to help partners drive profitability. The profitability blueprint program provides partners with a set of metrics and profitability indexes grounded in key performance indicators that help Microsoft and its partners establish a concrete and tangible path to generating revenue. Nine solution blueprints are now available, and we have launched an online tool that enables partners to benchmark themselves and produce a profitability comparison report. More than 3,000 partners have utilized the beta version of the tool.
In the year since the last conference, we’ve also seen some very significant product launches, including Windows Vista, the 2007 Microsoft Office system, and Microsoft Exchange Server 2007. Building on this innovation in the market, Microsoft will invest US$7 billion in R&D this year, and our partners will continue to benefit from this investment.
PressPass: How has Microsoft’s partner network grown in the last year, and what trends have you noted?
Watson: The Microsoft partner ecosystem continues to grow rapidly. In the last year, we had a 17 percent increase in the number of partners enrolled in the Microsoft Partner Program, bringing the total to over 400,000 partners worldwide. We had 90 percent growth worldwide in mobility solutions partners, an indication of how dynamic the mobility business has become. We’ve seen more than 80 percent growth in numbers of new partners in the Small Business Specialist Community, bringing the total to 4,200 in the United States and 12,800 worldwide. We’ve recruited more than 1,000 new partners in key new growth areas including Dynamics, Search, Collaboration and Web.
Microsoft referral networks such as the Solution Finder, a portal that links customers to partner solutions, and the International Association of Microsoft Certified Professionals (IAMCP), have created important new synergies between customers and partners. In the last year, the Solution Finder portal, which gathers requests from all over Microsoft.com, has seen a total of 1.8 million customer searches for partners and solutions. From these searches, about 10,000 per month result in actual contact between customers and partners.
The partner to partner, or P2P, synergies are even more impressive. IDC executed an independent study with the IAMCP to assess the value and characteristics of partner-to-partner (P2P) activity within the IAMCP community. The study included responses from 429 IAMCP members in more than 14 countries worldwide. This means that as a source of business activity, the IAMCP is extremely important to its member community.
The IAMCP partners with a high commitment of P2P as a business strategy (that is, P2P activity accounting for greater than 30 percent of total revenue) reported an average 2006 revenue growth of 23.1 percent while the total IAMCP membership reported 18.2 percent. These results speak to the power of partnering with Microsoft. These are the kinds of successes that we intend to foster throughout our partner ecosystem.
PressPass: What is the focus at this year’s Worldwide Partner Conference?
Watson: Microsoft remains committed to creating profitable opportunities for our partners. At the Worldwide Partner Conference we will unveil new partner strategies to help ensure that both Microsoft and its partners continue to anticipate and profit from upcoming business opportunities in an evolving IT industry. We continue our focus on building People Ready Businesses, and will share more opportunities for our partners to go to market with that approach.
PressPass: What is the “software plus services” model, and how does it impact Microsoft partners?
Watson: Microsoft’s software plus services model allows customers to have a choice in how software is delivered. Customers can choose the traditional method of purchasing and installing software on premise, or they can have software delivered, perhaps accompanied by value-added services, as a hosted service. However, it’s not a “one size fits all” approach, and it’s not either/or. It’s Microsoft’s unique value proposition that together with our partners we are able to offer our customers the advantages of both models. In fact, we will continue to have our traditional on-premise offering, we will have a set of hosted-by-Microsoft offerings, and we’ll have hosted-by-partner offerings. It’s all about choices for customers: They have a choice of how they receive their software, and we expect that many customers will choose a hybrid approach, with some of their software needs met by traditional on-premise installations and others met by hosted solutions delivered as a service. Depending on the solution, this software plus service may be hosted by Microsoft itself or may be provided by partners. In the cases where Microsoft is hosting the software, we’ll clearly outline areas in which partners can participate by providing value-added services on top of the hosted software.
With software plus services, Microsoft will be pointing its partners in a new direction. At the conference, we will outline a framework for how partners can participate and make money with this new opportunity, framing the monetization approach for how partners participate financially within the new software plus services model. As more products become available in the software plus services area, we will continue define the partner revenue possibilities for each.
PressPass: What are the partner opportunities with the software plus services model?
Watson: It’s important to emphasize that software plus services is an industry technology evolution; partners will continue to be a key part of Microsoft’s go-to-market strategy. As we have in the past, we continue to look for ways that partners can add value and profit from our innovation. The same is true for the expansion to include the software plus services model. Microsoft is defining new opportunities made possible by this evolution, and at the Worldwide Partner Conference 2007, we will present examples of partners who are already profiting from those opportunities.
In the future, there will be a range of opportunities for partners to meet a range of needs. There will still be opportunities to resell, refer, add value through professional services, package with customized capabilities, and make money through annuities and subscriptions – all of this will remain true. However, there will also be abundant new opportunities for innovative, value-added services and customization as these hosted products roll out. We are also attracting exciting new partners who recognize the business opportunities represented by the breadth of our platform and the potential of the software plus services model.
We recognize the software plus services model represents major changes for everyone in the Microsoft ecosystem, and that change can be difficult. But as always, the industry is evolving quickly, and we must be in the position of leading through this evolution. If anyone can help partners move comfortably into this new world, it’s Microsoft. Working well with partners and creating partner opportunity is in our DNA at Microsoft – we do it better than anyone.
PressPass: Can partners unable to attend Worldwide Partner Conference access any of the information delivered onsite in Denver?
Watson: This year we’re excited to introduce “Digital WPC” as it will expand the reach of the Worldwide Partner Conference well beyond the conference center in Denver. Partners onsite as well as those who couldn’t attend will have access to live streaming and on-demand replay of many conference keynote presentations and breakout sessions. The site will include resources for partners ranging from conference content to blogging sites and demos. Much of the content will be available broadly, with special content available to Microsoft Partner Program members.
We receive lots of feedback from partners who attend the conference outlining how their businesses have benefited from joining us at the Worldwide Partner Conference. This year we really want to share the excitement of the conference with a broader audience to help them benefit from the incredible resources that come together at the conference. Digital WPC will also help those who did attend the conference review particular sessions or keynotes after they’ve returned home.
We’ve got a fantastic conference planned and we look forward to celebrating our shared successes while looking toward a promising future of serving our customers together.