Simon Witts: Microsoft Worldwide Partner Conference 2007

SIMON WITTS: Now, last year I talked about being clear on the opportunity, and being clear on the approach. Having said that, having been here a couple days with you, I’m not sure I need to talk about the opportunity, do I? Let me try that one more time. I’m not sure I need to talk any more about the opportunity, I think whether it was business applications, in what Tami did, or platform in what Steve did, or the infrastructure in what Chris, and Andy, and Mike did, I think we’ve been washed all conference with the unbelievable opportunity that we have together in the market. So I’m going to focus all of my time on just the approach.

The way I’ve decided to do it is to talk a bit about story, the People Ready Business story. And we all tell stories when we sell, in fact, the customer expects that of us, but the reason I want to spend time on this is to make sure we understand collectively what we can do around this storytelling, because I think it’s only collectively telling this story that we will together reach our true potential of growth in the next year. And I think, let me be very clear, I think what we have here together is unique.

It’s different than Oracle’s story, or IBM’s story, or Google’s story, or Symantec’s story, or SAP’s story. There’s two things that make this story unique, one is I think it’s a true vision for business. Two, I think together we can actually execute on it today. So I want to spend some time on the uniqueness of that, and collective storytelling, and then I’m just going to spend time on approach. And I’m going to talk about the sales and partner approach for all segments. In the aptitude I’ve picked, I’m going to cover all partner sizes, and all partner denominations. So I really want to get to the end of this session when you’re 150 percent clear on the approach, because I think what’s in it for you if we get to that point is you will ultimately be see how to get more return out of investment in this partnership we have.

So put your seatbelts on, and let’s go. And let me just talk a little bit about storytelling, generally. We all know stories, we all tell stories. In many senses, when I’m out doing joint calls with many of you, I learn more about your proposition when you’re telling your story to the customer than when we do the business review across the desk. And in many senses, I want to talk differently now about collective storytelling. You can hang your hat on this People Ready Business story, I believe, but collectively we need to understand that there’s some high level story elements, if you will, that I want to share with you, because if our story is going to come out collectively well together, we need to know which story it is we’re telling, who is our hero, where’s the drama, what’s the plot, what’s the moral of our story?

I would suggest you all know the difference between the Snow White and the Cinderella story, at least I hope you do. I tested, I believe this translates pretty well. But, we all tell it in different ways. In the Witts’ household Hanna, my seven-year-old, thinks it’s a unicorn that drives the carriage. That’s just the way I tell that story, it seems to work well, and that’s great. We want to make this story our own. But, I want to make sure we know what the key elements are of the People Ready Business story, so together we can collectively tell it in the market, and make sure we realize the potential we have against the other stories out there.

So the hero of our story, it’s business. Through their people, it’s not software, it’s linked to software, but the true hero of this story is the business we’re trying to sell to. The drama is this expanding role of software, and I think if nothing else at this conference it’s become even more apparent to me there’s an explosion of use of rich and good software. And we can track that in this discussion to the work style and the lifestyle, but for business people when we talk to them, frankly, they’re more interested now about the role of software to their customers across the intranet, or the Internet, to their supply chain, their value chain, across the intranet. It’s not just their employees on the intranet, it’s the extranet, the Internet, it’s a whole reach of the role of software.

We do actually have a plot emerging here when we talk to business people, or we have a plot here emerging when we talk to IT, because this is a sea of change. And I want to position first of all the story to business people about the kind of applications they can expect and deliver, again, whether it’s across the intranet, the Internet, or the extranet, regardless of whether they’re employees or not. And then I want to flip to the discussion, not of the applications the business people are interested in, but the platform and infrastructure that IT has to do to enable that.

So let’s start with the business and how businesses think of applications. And I would suggest to you, most businesses are frustrated that the applications they have delivered, whoever they’re for, basically aren’t being used. And they think of their people being personally productive, maybe more personally productive than enterprise, or role productive. And we need to get into this discussion about bridging what for many customers seem to be worlds that are actually separating and not coming together. The enterprise workflow and the personal workflow seem to be going apart, not together, at a time when everyone realizes that there’s the more informal, or I heard someone this week call them gray market processes. I sometimes like to call it the business reality. How do people deal with exceptions, how do they collaborate, how do they share insight, things that aren’t defined in a rigid way, but attributes that personally are productive, but we need to bring people together to be also productive based on their roles.

It’s a very, very important concept. Let’s take finance, we have an application to help us do the budgeting, but how do we collaborate around budgeting. How do we do analysis and share insights before we close the budget? How do we deal with unbudgeted items, for example? There’s many, many business contexts where you can talk about to business people the value of applications that have a new reach and richness, or elements to them that change the way people use them, and they also become productive not just individually, but also around their roles.

Let me give you some examples here. How about delivering the application through Outlook and keeping people in a very intuitive environment? How about knitting applications together and composing them specific to someone’s role? How about actually tailoring the application to work differently for people of different roles? I purposely picked examples here that focus on internal roles, and the role Microsoft Office can play. Clearly this is expansive.

I met with Forrester yesterday and they talked about how they had segmented their customers into 19 roles, and you can imagine taking this discussion out to customers who play different roles, or suppliers. You can also clearly imagine different user experiences and technologies than just Office’s impact on business applications. Steve did a good example of talking about the user experiences, whether on the device, whether they’re in the home, whether that’s out to Windows, whether that’s across the Internet, or, in fact, Office, five different user experiences. And when you think about software plus services you can think about being able to deliver applications in such a broad and reach, and rich way.

So I want to really make sure that we understand the definition here of role-based productivity, it’s easier to put it inside the intranet. For example  contextually, I mean. For example, at Microsoft we have running the sales system, I’ve looked at Office’s role in my business applications, and I deliver my applications to the sales force, that’s Siebel, Clarify and SAP, I deliver them through a custom explorer in Outlook, and we knit those applications together to give role-based views on SharePoint in the middle tier, and we’re starting in my case to use Microsoft CRM to actually change the way the application is used if you’re in a call center versus in the field, and so on. And actually I’m not the only one at Microsoft. If you look at our business unit IT budget 60 percent of it now is being spent on Office, to change our business applications, connections, score cards, portals, dashboards, and so on, and less to those actually application vendors themselves.

So I want to really understand this because what this means, ultimately, is a situation where Office for business applications is transforming. We have to think now of Office not just as the client, but also the Office servers, Exchange, Communications Server, and SharePoint. Think of this as an impact on business applications broadly, the so-called Office for business applications. But I would also suggest think about Office’s impact on the platform. In my case, the whole business transformation of the application is done by me now, not by IT. I have analysts and designers playing around with the SharePoint Designer, and I would call this now a business-led application transformation based on the platform I’ve been given from IT.

And this will have a big impact on infrastructure as well. In the era of personal productivity where IT but an environment where one could have spreadsheets, and word processors, and e-mail, and access to the Internet, now IT has to think about an infrastructure, yes an infrastructure, because we believe that our definition of role-based productivity can apply to every process and every role. Just think about that, every process, and every role. So what we’re talking about here, the capabilities, for example, of Exchange, and Office Communications Server in terms of unifying communications; or the capabilities coming from SharePoint around collaboration, content management, search, and BI, these are capabilities we don’t believe will any longer be niched, only associated with certain applications and not others. These are capabilities we no longer think will be segmented in terms of the executives have access to them for their system, and the field force or the operations don’t. These are capabilities that, in many senses, can be democratized and made available to everyone at work, because everybody can use aspects of them to also become productive in terms of their role. So it’s a massive implication to the infrastructure as well as to the platform. Actually, when you really get into it, attributes of the infrastructure, like access, identity, presence, and rights become critical in enabling this role-based productivity environment.

So let’s switch to the discussion with IT, what’s the plus here? And it’s very important to understand that if you talk to IT, and we’ve talked over the conference about enabling IT and development to really, across the lifecycle, if you look at what IT are trying to do to advance the business, or make people more impactful, then how they think of platform today is no longer just the classic platform capabilities, user experience, BI, SOA, and so on. I believe, we believe, that the business productivity capabilities become part of the platform definition as I’ve tried to outline and highlight. Equally, when IT think of the infrastructure to manage the complexity and get this agility, or they think about protecting and giving control, equally the business productivity infrastructure capabilities are as important as the core capabilities inside the infrastructure itself.

So when IT is thinking about how to respond, we see a situation where IT is thinking about some core capabilities across the platform, and across the infrastructure, and frankly it’s consolidating the number of technologies, and the number of vendors that get involved. Probably like you, we have almost no discussions on point solution anymore, or best of breed. All of our discussions are on how do these pieces integrate, and can be optimized. And optimized is a term we’re using because it’s subtle. IT will speak with forked tongue, IT would say, yes, we want the value of the integration. But IT will also say it’s got to interoperate. And so optimize is a halfway house between showing the integration of what we do, but also that it interoperates from the get-go. And I think that we aspirationally help IT get more optimized in the platform, and the infrastructure, by describing this better place, we talked about it at the conference as dynamic IT, because it’s not only consolidation, standardization, rationalization that’s going on as IT looks to turn itself into something more efficient, effective, or even a strategic asset.

This is a yin and a yang in terms of really enabling the business as we’ve talked about, but also there’s some technology shifts that are very, very important to incorporate in this transition. Andy and Steve talked about them. We know this environment is going to be unified and virtualized. We know this operation is going to be more process-led, and model-driven. There’s going to be less people involved in the operations. Certainly it’s going to be services-enabled, you’ll see that through SOA or software plus services, and clearly as I talked about the user experience is everything in terms of what IT can provide. So IT is really looking then to optimize the platform, and the infrastructure in a very sequenced way. And we believe not only it’s possible with technology, but it’s possible by working with Microsoft and our partners, and I’ll come back to how we actually do this in the field on a day-to-day approach, but a very, very important plus here forming for IT.

So that’s our story. This is how we create a People Ready Business. And I’ve given examples mainly around the Internet and employees, but again this story will expand to roles in the value chain, the supply chain, and out to customers. This story will expand to the extranet and the Internet. And ultimately it’s all a story about business people demanding richer applications, and it’s all a story about IT expecting more optimized platform and infrastructure.

But like all good stories, there’s a moral to this story, too. And the moral to this story is, Microsoft and our partners, of course, and while Kevin outlined the Microsoft advantage in our story telling I think we have to net it out to customers a little bit more succinctly. And the way I suggest we do this is to talk about our company, and never has it been so important to have, as a company, such a diverse set of audiences or users that we think about, and as you know we wake up each morning thinking about how they use software. So our deep understanding of how software used does translate itself into a proposition in software that is ultimately familiar and easy to use.

I believe we’re a company of deep relationships, that’s shown here at the conference, it’s shown every day in the managed partners, and the managed accounts that I work with and talk to. I think we have to talk about this in terms of being an attribute of the company that is also part of why our software is so widely used, and thanks to you broadly supported. I do believe that customers want a relationship choice either with us or with you, and better together here in terms of the relationship we have, but more important the customer relationship that creates. And the software is being adopted fast because of our company’s ability with you to do that.

Obviously, we believe in interoperability. This is sometimes misunderstood because we also believe in the Windows Operating System. And I want to get beyond that and talk about a base belief in the company. In fact, many markets we’ve made have started with being how to interop with what’s there, and I think we have to translate this together into software that’s easier to integrate and connect with what our customers have, and our long-term approach translate that into the roadmap, the R&D, the innovation, and ultimately software that’s going to evolve to meet the customer, and continue to meet the customers’ needs.

So hopefully that’s the story, and hopefully collectively we can understand the key story elements, the hero, the drama, the plot, the hero together, but also bring that now to a situation where we can bring out that uniqueness that I believe is here. I think if collectively we tell this story, we will realize the opportunity we’re talking about at this conference here, and my dream of 20 percent in the enterprise specifically. Remember, I think this is a unique story, because it’s a real vision for business, and together I believe we can execute it today.

Let’s get on then to clear approach, because I want you to leave in 10 minutes from me of being very, very clear on what our sales approach is, and what our partnership approach is. And, again, I’m going to try and do that for all segments, and for all partners, all sizes, and all denominations, because I think it’s important, again, that you leave the conference understanding how to get most or more ROI against the partnership you have here with Microsoft.

When I talk about sales approach and partner approach, what do I mean? I would suggest we think of it in two ways. How do we sell applications to business people, how do we sell the platform to IT, and how do we sell the infrastructure to IT? But also we think about it in terms of how do we sell to the enterprise, and here I’ve purposely described the enterprise as quite large companies, or with quite large IT. So in normal Microsoft parlance, I’m talking about how EPG with our managed accounts, and managed partners, work with the managed accounts, and how SMS&P in the upper mid-market work with managed partners on the managed opportunity, but ultimately all of these customers, as Kevin highlighted, think of themselves as enterprise.

And then I’ll try to simplify it again and say the core mid-market through to the small business, how do we think about that in terms of working with you as a managed partner, or through self-service, through the program or the Web. And I’m going to try and cover both as we whip through now looking at what are our sales approaches here, and what’s the partnership approach, and you can get clear as to where you make your investments.

Let’s start then with how to sell in the enterprise applications platform and infrastructure. And I’m not going to highlight the market growth but you’ll see in every single slide we grow ahead of the market. And this is using IDC data for packaged software, and the cure assumption if we’re growing faster, you’d be growing faster if you’re betting on us around our contribution to each of these opportunities through software.

When it comes to applications in the enterprise, what’s really hot is CRM, and what’s really good is we believe we’re outselling Salesforce.com. And we think we’ve taken leadership, and we’ll retain leadership position in CRM. I’ve purposely not put SAP or Oracle here as competition, because we work well with them, and we don’t have full suite of business apps. In fact, we work well with many, many companies who have domain and vertical solutions clearly. But I even, for the core business apps, would not put Oracle or SAP as the competition. But anyone whose core business is CRM, I would, because we’re on the front foot there, and we’re really starting to run.

When it comes to platform, clearly what’s hot is user experience, what’s hot is business intelligence, and what I like to call real world SOA. And I am stunned, 25-26 years into this business, how few application platform decisions are being taken on the traditional environments like development, management, and data management, and so on. It’s incredible how these new characteristics or attributes are driving the decision, and this is really hot.

Luckily, we’ve got Microsoft Office, because if I look at our competition against platform vendors, and I’ve purposely put Oracle and SAP here for NetWeaver infusions, if we look at our competition outside of the core application platform, we look at what other assets these companies have, and for sure SAP and Oracle have assets with applications, but frankly I would prefer my partners than what they’re doing themselves or acquiring right now. I really meant that; we believe we can win in application platform because of the ISV and industry partnerships, many of which are represented here in the room.

But what other assets do people have beyond core platform? They can have business productivity assets, too, and in many senses IBM has those through Workplace and WebSphere and Notes, and that’s why we’re stepping up there. Not only do we believe we’re better, but we think ultimately our application platform will win against IBM because of the differentiation of our business productivity assets as well.

And then lastly on infrastructure, clearly Active Directory, moving into identity and access, and as I mentioned earlier, actually moving into presence and rights, is so hot, because it’s not only controlling and access, it’s actually lighting up the Office Servers and allowing a unification of communication and collaboration in the scenarios we’ve been talking about.

Clearly virtualization is critical, everything is being virtualized from PCs to applications to servers and so on. Everything should be and will be. And luckily with the 2008 Server and System Center, Virtualization Manager, we’re very well positioned there. And clearly UC and collaboration is hot, hot, hot, hot.

Competitively on the infrastructure we think mainly about Linux frankly and EMC, but actually we have good collaboration with EMC as well around business productivity. So, there’s a maturity in my descriptions here, because our compete is on certain capabilities, and we have good alliances around other capabilities, and our customers and you expect that. There’s no such thing as a vendor war here. So, we have good collaboration with EMC. We actually have good collaboration with SAP, and in certain areas like quarantine and IP we have good collaboration with Cisco.

I can’t think of very much good collaboration with Oracle and IBM, if I’m honest with you. There’s really not a lot there. Or with Linux or Google frankly. So, that will remain a very clear compete agenda.

So, let me get into the last piece, which is actually talking about how it relates to you, and let’s start in the enterprise. As we talk about it’s all a managed relationship that we would like a business plan behind, and as Kevin said, conditions of satisfaction in place.

But as importantly now, because we’ve all got to pick things that we’re going to focus on, they could be solution areas to sell applications to business or they could be capabilities in the platform or capabilities in the infrastructure, but we really like this idea of putting together a number of solution plans with every managed partner, so we know exactly what it is we’re respectively focused on, and what it is respectively we can bring and need.

Now, then you look at what does that actually mean, and I would suggest that this partner business plan, and in particular the solution plan should be how we work with our managed partners at the account or opportunity level, but bring us together as one Microsoft to make a single set of commitments to you around the commitments you’re making to us as well.

So, specifically if you look at the marketing, here I’ve highlighted the five campaigns to sell basically applications to businesspeople around business process, customer connection, the performance, about mobile workforce, and you can align with us on the priority solution areas we’ve picked. Some are by industry. We’ve talked about that in a lot of breakouts at the conference. But also some are cross-industry, like CRM or PerformancePoint or more role-based like ECM and so on.

And then clearly we want you to have a set of commitments with our services practice as well. And Maria will come up after me and talk about the service lines, in this case how you would partner with us with our industry practices or our own business applications practice that Maria leads.

So, you get the idea; that’s how we sell applications. When it comes to selling platform, we’ve got the single campaign around optimizing the platform.

We have a sales approach based on these optimization models where we go into customers and talk about capabilities, not products, because they don’t buy products, and they actually want to understand the capabilities in terms of the interaction, but also to benchmark themselves as to how optimized they are. And in one sense it’s a math proof system without doing design and proof for every customer, and that’s why I think it’s the most immaculate co-engagement tool with partners. If I’m taking one thing from this Partner Conference this year, it’s the positive feedback on the optimization models as a way of engaging IT for a collective engagement framework that amplifies the impact everyone in the room can have, which is just super to hear and is now good to see.

And clearly Maria can talk about the application platform practice, and it’s important news about pre-sales architects, that those that partner with us on platform should be pleased about.

Then selling infrastructure, we’ve got the two campaigns for business productivity infrastructure and core, the two models for business productivity and core, and then two practices that will help drive that, but they all work just the same, and we’d like to get that single set of commitments to you across EPG and upper mid-market around these campaigns and these partner engagements and through the partner solution plan that would be done from both teams in EPG and now SMS&P.

Let me just quickly go to the mid-market and the small business approach, and I’m going to purposely start with you, the partner. There’s essentially three ways of working with us here through the program or through the partner Web. I’m going to do a little plug, because I picked up a lot of good momentum here about the Small Business Specialist community that’s forming within that. (Cheers.) Yeah! Everyone who’s a Small Business Specialist or part of that community, I think we’re getting real momentum, and I’ll come back and give you some proof points of that in a second.

But equally you can work with us through distribution, not just that relationship, but we’re starting to more structure our offers around campaigns, and I’ll come back to that as well, but also clearly you can come through to Solution Finder and profile yourself and meet customers that way, too.

When it comes to customers, we’ve really anchored it onto the two sites, the medium business site, and the small business site, or the centers. If you actually look at it, the midsized business center has almost 100,000 subscribers today, which is very cool, and it really does now interact through newsletter, discussion groups, blogs. It’s actually quite cool what’s going on there across many parts of the globe.

I think the one that impresses me the most is the 70 countries now that the Small Business Center operates in. We’re approaching essentially 5 million unique users a month, and we’ve got to a situation of having 26,000 click-throughs per month on the campaign pages alone, so a real connection there, very good connection of customer to partner. Thank you.

I mean, really what they’re doing there, I mean, clearly they can get to Solution Finder through those two sites, or go to Solution Finder separately, but what we’re seeing, and it doesn’t surprise anyone in the room, is that customers are wanting local partnerships and to know that those partnerships are specialized on them, especially if they’re a small business, which is where we’re getting real positive momentum here, a positive success loop between the Small Business Specialist and what’s going on, on the Small Business Center, and ultimately the campaigns that we’re driving here. There’s essentially four of them, one around business solutions that is frankly more about your application than ours. I think here we’re looking at your domain or vertical expertise or local nature of your applications. There isn’t a motive here, more for us to sell the platform than necessarily, specifically one of Microsoft’s own business solutions itself, although that’s fine as well. Where we’ve really targeted our Dynamics assets is in this other one, which is around acquiring and retaining customers, where this campaign at the low end is really the contact manager in Outlook and then obviously Microsoft CRM in the mid-market.

But I do caution you that not every subsidiary in the world will be running these two campaigns on business solutions and customer acquisition and retention, but the main markets will.

Having said that, I can guarantee you every market will be running the campaigns around business productivity, which is really to be open with you more about personal productivity than role-based productivity at this stage. It’s around Office on the client, Exchange, mobility, and so on.

And then there will be also this infrastructure campaign basically very clearly targeting security and reliability, very clearly targeting Windows 2008 Server and Small Business Server, and very clearly targeting the opportunity we have with System Center Essentials and with Forefront against the existing installed base, including Symantec there.

So, hopefully through the conference you’ve become attuned to how to engage with us as a partner through the program, through self-serve, through distribution or through the Solution Finder. Solution Finder, just to be super clear with you, had 3.8 million referrals last year, so it’s a very real thing that’s going on now. Thank you. (Cheers, applause.)

And you can see how we’re trying to put you together with customers, and you can see how the campaigns are going to help. And we’ll direct those campaigns directly to preconfigured searches on Solution Finder. So, we’re really going to connect those campaigns directly to you, assuming your profile correctly on Solution Finder, without necessarily going through distribution or those customer portals themselves.

So, I have one goal, only one goal, because the business group marketing executives did such a good job over the last two days. My one goal was to make sure we’re clear on approach. I really do think what we have here with the People-Ready Business story is unique. I think it’s unique because it’s a real vision for business frankly that future proof in terms of intranet, extranet, Internet, and it’s a real future proof because it’s not just employees, it’s value chain, supply chain and customers. I think it’s huge. And what’s more, you’ve seen that we collectively together could execute and deliver on that today.

I hope you’ve seen through looking at our sales approaches and our partnership approaches that we can get very clear with you on the approach, and I hope I’ve taken you to that point where what you’ve got out of this session is you’re actually a lot clearer on how to get more return on investment out of the relationship you’ve already invested in, in Microsoft, and for that I want to thank you, and if I can be of any personal help, [email protected]. Thank you. Enjoy the rest of the conference, and 20 percent in the enterprise, please. Thank you. (Applause.)