John Case: WPC 2014 Keynote

ANNOUNCER: Ladies and gentlemen, please welcome Corporate Vice President of the Microsoft Office division, John Case.

JOHN CASE: (Applause.) All right. Hello, WPC. All right, this is great. Hello to the corporate boxes up there. I hope you’re doing fine.

I’m very happy to be here. I’m honored to be here. My name is John Case. I do work on the Office and Office 365 businesses, but today I’m representing the entire end-to-end commercial cloud. I’m going to talk to you about what we will work on together over the next year and beyond to seize the opportunity for commercial cloud across everything that we do together.

So you’ve heard for the last hour or so from a bunch of our product leaders. And they talk about innovation, investments, and great things that they’re doing to drive value into the product. When you take all that together, when you think about productivity, biz apps and platform, and you look at the products that we’re creating — Office 365, Dynamics, and Azure — what you realize is that we believe, and I think you believe, our cloud platform is the most comprehensive, flexible, unique, integrated in the industry.

We think that together the whole is greater than the sum of its parts. And I actually think the market agrees. And you may have seen some of these stats, but I want to show you in one place a set of the momentum things that are happening around our businesses together, customer, partner, and the business overall.

The customer momentum on the Microsoft cloud is tremendous, 8,000 new Azure customers per week, 60 percent of the Fortune 500 having bought Office 365 in the past 12 months, over 4 million unique users of Microsoft Dynamics CRM.

But what I love seeing the most is that partners are benefiting from this growth. And that’s the thing that makes me the most happy. 35 percent today, 35 percent of Azure revenue today comes directly from and through partners, which is an incredible statistic.

CRM Online subscriptions, revenue per partner has doubled in the past year, doubled. And right now, three out of every four Office 365 customers are being deployed by one of you, someone in this room.

I love seeing the partner momentum coming from the cloud, so thank you so much for everything that you’ve done to support these three businesses over the past year. Thank you. (Applause.)

Now, the business is going to keep growing as well. A year ago, we were talking about $1 billion of Office 365 revenue run rate, and now we’re talking about 2.5, and that number is going to keep growing.

Dynamics CRM, 40 consecutive quarters of double-digit growth. And I think that’s just going to continue. We’ll continue to show you the momentum in the market, and we hope that you come along with us.

Now, one of the great things about the cloud, one of the great things, is just how fast we can innovate. How fast we can change things as needed. We took a look back over the last year and thought, “What were the big things that we did together with the partners?” And we came up with an entire huge list. And we said, but what were the four or five we wanted to specifically reference here, things that we did together over the past year. So this is a few of them that we put together.

The first, about a year ago, Azure 365 was just getting started in Open. Intune was added. Azure and Open was something that Scott just talked about. Just came out in the past few weeks.

Microsoft Dynamics Marketing and Social Listening, this is marketing automation and social monitoring apps were put into Dynamics CRM products in May.

Office 365 on the iPad. Since that was released in March, there have been 27 million downloads of our Office iPad apps, and that’s just continuing to grow.

Azure machine learning. Scott talked about Azure machine learning a few moments ago. And, you know, this is something where when that becomes truly available to everybody today, we think this app, which is a service for analytics in the cloud, will become a really exciting way for you to use Azure to help your customers.

And finally, I’m announcing here that CRM Online will come into open licensing during this fiscal year. That’s a new announcement today. Yeah. (Applause.)

Looking at all that together, you realize, though, that product itself is only half the story. And we love doing investments in the product. And we think that’s an incredible way for us to drive demand for you and for us. But we’ve also been investing heavily in what I’ll call the customer life cycle.

So for the rest of this talk, we’re going to spend a few minutes talking about the customer life cycle, things that we’re doing to help you on that journey because we believe that successful cloud partners engage at every stage of the customer journey. And we have to do more to help you do it.

Now, we’ve been looking at our partner group today and thinking about what do successful partners do that really differentiate themselves on the cloud? And we did a study with IDC. And in this study, this is specific to Office 365, but we think the points are applicable to the whole cloud business.

We actually think that partners today are doing some different things to be successful in the cloud. The first is successful partners are three times more likely to do proactive marketing. They tend to attach four or more services to each deal.

There’s a great partner in the U.K. called TechQuarters. I don’t know if you’ve heard of them, but for every dollar of licensing revenue they do on Office 365 — sorry, every pound, I said U.K., every pound — they do six pounds of services revenue attached to that pound of revenue. That’s an incredible transition. Think about how much you can add simply to the license itself.

They’re 8X more likely to be a managed service provider. And they tend to drive much higher customer satisfaction and renewal rates.

So what I propose to do now for the next 10 minutes or so is drill into these stages. Tell you about investments we’re making in each of the stages of the life cycle: sales, onboarding, enhancement, management, and renewal.

And you can think, “What are the steps that I can take as a partner to put my name on this list as a successful cloud partner?”

Let’s start with selling. One of the things we’re announcing today, available now to the market, is the Microsoft Cloud Solution Provider Program. This is a true cloud reseller program. We’ve taken a lot of feedback from you on this. Partners in the program will be able to directly provision customer subscriptions and provide one monthly bill for partner services and Microsoft services together.

You can also directly manage these customers with things like the partner admin center, and you will own the tech support relationship. (Applause.) Thank you.

This is a big deal, the Cloud Solution Provider program. We’ll start with Office 365 and Intune, but during the course of the year, we’ll also bring Azure and Dynamics CRM Online into this same reseller program. So all our commercial cloud businesses will be interested in this provider program.

We’ll roll it out over the next 12 months into 48 countries to select partners. And we’ll work with you country by country on who belongs in this program. It’ll be some different kinds of partners and some of our existing partners. For us, this capability is a major step forward in working with you on taking our businesses to the cloud to customers.

Onboarding. So we’re past sales. Onboarding. On the onboarding side, one of the things we see conclusively is that the faster that customers get to usage and get engaged with a partner, the much more likely they are to renew, much higher customer satisfaction, we’re able to add far and far more high-value services, and we deliver more qualified leads for things like expansion. So the math is pretty simple. Faster time to value, faster time to usage equals much faster partner opportunity.

We’re going to do a bunch of things in the product. For example, in Office 365 to help customers do more onboarding in an automated way. And we’ll have a lot of direct connections to those customers. And our intent is for every single new customer that comes into Office 365, for example, or Dynamics or Azure, to make sure that there is a partner attach to every single one of those new customers. And we’ll help provide that. (Pause.) I’m waiting for that one. (Applause.) Okay, there we go.

And we’ll create new space for you to do more things on complex deployment, more things on enhancement. And I’m going to spend some time talking about that now.

Once you’ve got customers onboarded, we think the next biggest opportunity for partners is to enhance the customer cloud experience. And this can take a variety of forms. One thing can just simply be migrating of existing applications, which we think is over a $6 billion opportunity for partners.

Integration, connecting one service to another or a hybrid environment, we think also is a multibillion-dollar opportunity.

Apps alone. We’ve seen over 5 million apps for Office 365 and Azure installed into our cloud businesses through our stores. And global scale, we’re reaching a billion users, and getting to global scale enables you, if you build one of these apps, to kind of hook yourself to that locomotive.

I’ve got some examples of partners that are doing this work now, and I just want to reference a couple of them because I see some really exciting work happening with partners enhancing one of our cloud services.

This could be migration. Partners like AvePoint and Dell Software doing great migration work. It could be integration. Zapier, for example, doing really exciting things integrating apps by the hundreds.

It could be scale. Skylight Systems, a two-person ISV reaching thousands and thousands of customers through our Azure and Office 365 stores.

Or it could be global ISVs. You saw a great demo a little while ago of a Salesforce experience, but partners like Salesforce and DocuSign are choosing to build apps for Office 365, Azure, and in some cases CRM Online specifically to take advantage of that sale opportunity.

One thing that we’re announcing today that you heard a little bit about already is the Azure Certified Program. The first six partners are live today, phase one. It’s Azure certified for virtual machines, for partners running in a single virtual machine and a bring-your-own-license configuration.

We’re excited today that partners like Oracle, SAP, Barracuda, Riverbed signed up now and live in the Azure gallery.

But this is open to anyone who wants to build this kind of application in a VM. And there’s a way to apply and get certified, and this will be a great way to say your apps are certified for Azure and pre-loaded in our gallery for display.

Once you get past enhancement, I want to talk a little bit about support. Because I actually think managing customers is a requirement that you have if the customers expect you to be front and center of the life cycle at all times.

Already during this year, we’ve done things like the Azure Admin Console. We launched the Office 365 Partner Admin Center back in January with updates coming all the time.

We also realized, though, that you need a different class of support service. Many of you were involved in a pilot for this over the past year where we gave you unlimited break-fix support, for example, for certain kinds of competencies, and really a unique tier of support for gold partners. And that was the pilot this year, but we’ve actually decided to institutionalize it. And we’re announcing today signature cloud support, which is a continuation of this support service, unique for partners, and will apply to Azure, Intune, Office 365, and soon Office Dynamics CRM.

So for us, we realize that you have to have support from us that enables you to serve your customers end to end. And we want to provide that. You’ll hear a lot more about this during the week, and Gavriella will talk about it in a few minutes. Signature cloud support for partners. It’s a good thing. (Applause.)

That brings us to the end of the life cycle, but by no means the least-important stage, which is the renewal.

And there’s some interesting data to share here, which I think you’ll find fascinating, as I do.

We know that when partners are engaged and engaged early, we have a much higher renewal rate. So customers are using the service actively and you’re engaged with that customer, the reality is that renewal rates are almost 100 percent.

And we want to bring you as deeply into this renewal process as possible. Already, for things like CRM Online, you can see all the customer communications through this secure partner website. For 365 and Azure partners, you’re already getting a consolidated e-mail detailing all the upcoming renewals from your customer base, and including you in all the customer contacts. That’s these e-mails on the bottom.

But because I have telemetry on those e-mails, there’s something I know that you might not, which is that only less than half of you are actually opening the e-mails we send you. And only 15 percent of you are actually clicking on the e-mail to find out more about what your partners are up to. So the reality is, renewal for us, we want to give you these tools. We want to tell you what’s coming. We want you to know what customers are up for renewal. We need you to see that through to the end. Right? That’s actually an incredibly important step.

So renewal for us, we’ll continue to provide you any data you need or ask for to know what’s happening to your customers and what they are and what stage of renewal.

That’s the end-to-end life cycle. We’re making investments in selling. We’re making investments in onboarding. We’re showing you how you can do more kinds of enhancement through things like developer tools, but also apps. We’ll help you manage through admin centers, dashboards and support. And with renewal, we’ll keep giving you information about which of your customers is up for a renewal stage.

The reality is, every one of our major cloud businesses has some huge sales opportunities ahead of them this year. If you look at that list, these are pretty significant things. These are door-swingers, right?

Office 365. Every single customer I talk to is working on a social strategy. Every single customer I talk to is thinking about what to do with click-to-run on the Office 365 client.

Microsoft Azure. This year alone, when Windows Server 2003 comes to the end of service, there’s a $6 billion opportunity with 22 million instances still running on Server 2003. You can bring them to the cloud, you can bring them to a hybrid solution. This is an immense sales opportunity.

Microsoft Dynamics is rolling out a new sales productivity solution that’s a combination of CRM Online, Office 365 and Power BI. It transforms sales forces in sort of a highly connected and collaborative experience. It’s a huge opportunity for partners. And every one of these is a big opportunity.

The reality is, we’ll keep driving demand on these things. We’ll keep arming you with those tools, arming you with the ways to give you data, help you with renewal, help you do management.

For us, that’s the end-to-end vision, okay?

Now, I’m going to bring a guest on stage and I will leave you. I’m going to bring Gavriella Schuster to the stage. She’s from the MPN team. She wants to talk directly about changes happening in the MPN program, and she’s going to help you turn the words I shared with you into real dollars. So I’m going to leave now and give it to her, look forward to talking to some of you during the week. Gavriella, please join us. (Applause.)


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