Judson Althoff: Worldwide Partner Conference 2016

Remarks by Judson Althoff, Executive Vice President, Worldwide Commercial Business, in Toronto, Canada, July 13, 2016.

LASZLO AKOS FOLDESI:  I’m Laszlo Akos Foldesk, CEO of Systemfarmer based in Budapest, Hungary.

We are honored to be the Hungary Microsoft country partner of the year.  The value of the partner ecosystem is more important now than ever before.

Every morning, I’m terrified of how much I don’t know.  What we thought and what we did last year is no longer true.  That makes our job both marvelous and scary.

We are at the right place to share, learn, network, and stay on track.

There are so many great partners here.  Just look around and start the conversation.

(Video segment.)

ANNOUNCER:  Now, ladies and gentlemen, please welcome Microsoft Executive Vice President, Worldwide Commercial Business, Judson Althoff.  (Applause, music.)

JUDSON ALTHOFF:  Good morning to all of you here in Toronto and greetings to those of you who may be watching from around the world.

It is, indeed, an honor and a pleasure to be here with all of you today.

This is an exciting time in our transformation, and frankly I am very humbled to serve each and every one of you in my capacity of running Microsoft’s commercial business globally.

I spent my entire career living and working with partners and working with all of you to bring great solutions to life for our customers.

You have my commitment — steadfast commitment — that that will never change.

As Satya said, this is a company that’s always been led by partners and it always will be.

I’m inspired by what we can do together.  And I want to spend this last segment of today’s general session talking to you about how we’re going to get it done, the things that we’re going to do together this year that will truly make a difference.

Before I get started, though, the most appropriate two words to share with all of you are “thank you.”  I don’t want anybody in the room to be numb by these words because I know that many that have stood on this stage before me have thanked all of you.

But I know the hard work, the dedication, the tenacity and grit that you have put into our customers’ success.  And having been there right along by your side, I want to thank you from the bottom of my heart for the work that you do.

We cannot do what we do without your help.  This is our business.  It will always be our business.  And the higher calling that we stand to serve is one that we share together.  So thank you, genuinely and sincerely, thank you.  (Applause.)

Our mission is to empower every person and every organization on the planet to achieve more.  If you slow down and listen to these words, they carry a huge responsibility, one that we’re proud to carry on our shoulders together because it’s what makes us different.  We’re not a partner ecosystem that stands on the merits of simply releasing great technology to market, not simply a partner ecosystem that stands to deliver record-breaking financial results or market share growth.

We are a partner ecosystem that uniquely stands together to help others achieve more.  That is one that I’m proud to carry forward with each and every one of you.

Our bold ambitions have fueled our innovation.  They’ve actually inspired customers to vote with greater confidence than ever before in this very ecosystem.

And what stands underneath that as the foundation is our culture.  It is the very fiber of our being, whose core is rooted on making a difference.

It’s about being something bigger than any of us.  It’s why we’re all here.  We want to be bigger than something that is just ourselves.

I want to share a story with you that really brings this to life.

(Video:  Saqib.)

JUDSON ALTHOFF:  (Applause.)  Ladies and gentlemen, we have a very special honor to be in the presence of a super-special and amazing guest.  Please join me in welcoming to the stage Saqib Shaikh.  (Applause.)

Saqib, thank you so much for being with us here today.  I am truly humbled by the work that you’re doing.

SAQIB SHAIKH:  Thank you.

JUDSON ALTHOFF:  I was wondering if you might share with the audience what it’s been like to work with a partner to develop this groundbreaking technology.

SAQIB SHAIKH:  It’s been absolutely amazing.  The Pivothead hardware has just been a perfect platform to bring years of Microsoft research on computer vision into this natural experience that we’ve shown in the video.

JUDSON ALTHOFF:  That’s amazing.  So the research itself, it is just truly inspiring.  Perhaps you could share in your own words what the research itself has meant.

SAQIB SHAIKH:  It’s just been great.  It’s always been my passion to create things which help people, particularly visually impaired people like myself.

And with this research, we’ve been able to create a prototype which, as you’ve seen, explains for different tasks what is around you and gives you that little bit of independence in different tasks in your daily life.  And that’s been really great.

As a developer and as a blind person, I’m really excited to see where we can take this in the future as the technology advances.

JUDSON ALTHOFF:  Simply awesome, Saqib.  Thank you so much for inspiring us all and sharing this story.  Thank you.

SAQIB SHAIKH:  Thank you.  (Applause.)

JUDSON ALTHOFF:  So that’s an incredible example of our mission coming to life right before your eyes.  And I want to talk to you about how we can do this for all of our customers, how we can really truly help them achieve more through their own eyes of what their own potential might be.

The rest of today’s presentation is going to be about all how we bring this together and make it real, the priorities that we’ll share as a group to be successful this year.

So I want to share with you the six priorities that we’ll have this next fiscal year together.  And the point I want to make to you is that these are our shared priorities, our shared priorities.  They’re the very same six things that I will articulate to Microsoft’s global sales force next week as we go through our kickoff.  They’re what we will do together to deliver more, to reach our potential, to strive on behalf of our customers.

So let’s take some time to walk through each of these.

First, you’ve heard a lot about digital transformation.  You’ve heard a lot about how we can marry our intellectual property together with the value-add that you bring to bear, whether it be vertically integrated IP on top of our platform or the services that you can provide, marrying those things together with business outcomes truly drives new opportunity for us to work together with customers.

Now, we also spent a lot of time talking about our three bold ambitions.  In fact, Scott Guthrie laid out all of them quite well, was reinforced by Kirk Koenigsbauer and Yusuf Mehdi.

Many folks have actually asked me, some of my own people have stopped me in the hallway, partners, and said, “So, with all of this rhetoric around digital transformation, how do we piece that together with these bold ambitions?  Or is Microsoft somehow walking away from these bold ambitions?”

So I want to put this into context for all of you and share with you how we’re going to go to market together around bold ambitions and our digital transformation.

So we talk about these four pillars of digital transformation:  Customer engagement, empowering employees, optimizing operations, and truly transforming products.

We also talk about the bold ambitions of reinventing productivity and business processes, building the intelligent cloud platform, and creating more-personal computing.

The fact of the matter is that 86 percent of all of the CEOs believe that digital is their No. 1 priority.

So let’s talk about how we piece these two things together.

You see, it’s my view that the bold ambitions serve as the ultimate agenda for every CIO and every CTO that we might work with.  It’s top of mind for them to work on these areas, to capitalize on the innovation that we’re jointly bringing to bear.

But when talking with a CEO, when talking with a chief marketing officer or a chief relationship officer, a chief financial officer, one has to speak in the vernacular of business outcomes.

So, metaphorically, you can think of this as a two-sided account plan to work with every customer.  In fact, quite literally a two-sided account plan.

To win the hearts and minds of the technology audience, we have to make the bold ambitions become their agenda.  To truly allow businesses to achieve more, we need to align digital transformation with their outcomes.

I had the fantastic opportunity yesterday to actually share some examples of customers, real, live customers, not demos, not PowerPoint, customers sharing the impact of digital transformation through partner solutions that all of you have actually delivered.

In this realm of reinventing customer engagement, you will see in this video that I’m about to run, you’ll see Thuze, who’s produced an Azure-connected wristband.  That takes a one-time transactional customer event and turns it into lifetime customer value.

We’ll share a physical therapy scenario whereby empowering physical therapists to truly engage better with their patients, not only did the patients receive great benefit, but they become better at their craft.

We’ll show you a connected oil field where a technology has really, quite frankly, been vacant from the industry.  But by using IOT sensors and machine learning and predictive analytics, we’re bringing energy sources at a time when the industry itself is super compressed.

And then we’ll share how connecting a commodity device — transforming a commodity device like a water heater — can allow us to reduce greenhouse gases in Hawaii by 38 million pounds on a per-annum basis.

I’d love for you to watch this video and truly understand what it means to drive digital transformation.  And while you’re watching it, focus on the eyes of the customer because then you’ll truly understand the impact of digital transformation from their lens.

(Video:  Customer Montage.)

JUDSON ALTHOFF:  (Applause.)  These are great examples of digital transformation coming to life.  And, again, they’re not demos.  They’re reality.  Customers are appreciating these things that are being delivered by you, the partner ecosystem, today.  And I encourage all of us to embrace this revolution and be part of delivering it for customers.

So how do you get there?  I think Gavriella did an excellent job of providing you with the guidance that you need to embrace in order to help deliver digital transformation.  You have to differentiate yourself through the lens of the customer and bring forth what’s most important to them.

You have to rethink your own customer engagement and sales and marketing efforts.  This is no longer a transactional world that we live in.  You have to truly engage customers from anonymous interactions and social media all the way through to creating fans and advocates of the solutions that you deliver an ongoing lifecycle management of their solutions.

You have to operationalize and optimize your own operations.  And that means getting rid of some of the processes that overburden your own success and truly focusing on customers, embrace the cloud, move forward with these technologies.

Last, but not least, focus on that customer lifetime value.  Focus on customer lifetime value to truly transform the products that you deliver to market.

Every customer, every commercial customer with whom we deal today is looking to take their product and turn it into X as a service.  We need to be a part of that economy and help them achieve their dreams and goals.

Priority No. 2 for us all is to accelerate cloud adoption across every facet of the cloud from productivity to business processes reinvention through CRM and ERP applications in the cloud through to the Intelligent Cloud Platform itself; we have to embrace the need to drive deployment, usage, and consumption, and real active usage.

Why?  Because you don’t get value out of the solution, you don’t get value out of the experience until it’s truly delivered and realized by your customer.

We have to work together as an ecosystem to drive this forward.  And I want to talk briefly about each asset that we have to carry forward.

For Azure, you heard a great, great presentation from Scott Guthrie yesterday.  I’m not going to try to recant all of that for you today other than to say that our opportunity is truly differentiated.

I want to call out five things that we can do together with our intelligent cloud platform that, frankly, no one else can do.

First, it starts with hybrid.  We are the only hyper-scale cloud partner ecosystem that can truly deliver hybrid solutions.  You want to run it in your datacenter, you want to run it in our public cloud, you want to run any piece of it in either location, we’re here to support you.

We are also, as Brad so well articulated earlier today, we are also the company that can truly deliver a secure, compliant, and trusted cloud together as an ecosystem.

We have industry-leading security.  And together, we need to harness that.

You heard Guggs talk about all of the heterogeneous developer capability that we have with our platform.  It’s no longer about just Microsoft-centric applications, in fact, more than two thirds of the workloads running in Azure today are non-Microsoft workloads.  They’re open-source technologies and third-party technologies.  If you can dream it, we can build it together, today, on Azure.

The data and analytics assets within our Intelligent Cloud Platform are truly unique — truly unique.  The award-winning and groundbreaking research that we’re doing together around artificial intelligence that you witnessed on stage with Saqib is something that really only we can deliver together.

But the No. 1 reason why customers are leaving AWS and coming to Azure and not considering Google and choosing Azure instead is because of the go-to-market opportunity that we recognize here in this room.  The opportunity to partner together.  Our success is, in fact, your success.  We measure our own people inside of Microsoft on the partner solutions that are delivered to our customers.

When it comes to Office 365, again, Kirk took you through all of the great new innovations, and Catherine did a fantastic demo on stage showing you everything from features to the rich security offering inherent in Office 365.

I want to focus on what differentiates us, what we bring to bear that, frankly, no other provider can bring to bear.

Once again, there are five things to focus on.  We can bring experiences to heterogeneous compute environments like no other company.  Case in point, we actually delivered the latest release of Office for the Mac before we released it for Windows.

We provide comprehensive, modern communications across text, video, voice, inclusive of translation for global audiences so that you can reach and engage customers like never before.

The analytics capabilities in the platform truly provide the ability to measure the impact of productivity without fracturing the productivity experience itself.

The example I love to share with everyone on this is if I myself am trying to schedule a meeting with Walmart, Walmart is a massive customer of ours, they’re a great enterprise partner for us, but they’re also a huge, huge consumer partner of ours.  They sell more Xboxes and consumer devices than most of our other partners.

So when I need to meet with Walmart to understand our business holistically, the old-world way of thinking and doing this is to assemble a group of folks to get a report back on how it’s going.

The minute I do that, I fracture the productivity experience.  The capabilities we’re bringing to life with Delve allow me now to take a look at an RFP response or take a look at a CAD drawing that might eloquently describe how we’re going to lay out our products in retail and instantly look at how many people are involved in our project, the productivity of their work, the scheduled outcomes that they have to deliver without fracturing the productivity process.

The other unique thing about Office 365 that I hope that you all harness is that Office 365 is a platform for you to build upon.  The ISV network and solutions network, as Guggs said, developers have never been more important to Microsoft and our ecosystem.  Office 365 is a platform for you to build solutions upon.

And last, but not least, and hopefully you’re getting the understanding of a common thread here, the security capabilities in this offering are industry best in class.  It’s our commitment to deliver a secure and trusted cloud across all of our assets.

When it comes to business applications, we’re super committed to providing world-class cloud and hybrid application experiences.

But even in the realm of finished SaaS applications, we’re creating a platform for you to build upon.  We will never have the vertically integrated application experiences that you can deliver for customers.  And we want to work together with you to bring those to life.

Once again, there are five things that we can do together in this space that really no other ecosystem can do.  We have unmatched integration with productivity.  And this is so critical because productivity that is a stand-alone function and not woven into the business process itself is not effective at actually really delivering against the vision of what productivity strives to deliver.

The intelligence, everything from AI to core business analytics and representation of outputs through Power BI is inherent in our applications platform.  It’s built in.  It’s not bolt-on.

What this allows you to do is deliver solutions that create real intrinsic value and represent it as such through the offering.

Once again, hybrid capabilities that no one else can deliver.  Binary compatibility of these solutions.

Security.  Security.  Security.  Security.  If you’re sitting there in the audience and saying, “Gosh, if he says security one more time, I’m going to just poke myself.”  We’ll make a deal.  If you promise to position security with every customer that we have, I’ll stop talking about it.

But it is, in fact, a differentiated offering that we have to carry together forward for our customers.  And it is the core of everything we do.

The last thing I want to leave you with on our applications space is the power of the integrated platform, the full portfolio of intellectual property we bring to bear.

You saw some great solutions represented on stage this week from Rolls-Royce to Schneider to Ecolab.  Every single one of those solutions was brought to bear by a connecting fabric of intellectual property across productivity, across our application set, and across the intelligent cloud platform.  All delivered by partners.  All delivered by you.  Once again, this is our shared strategic differentiator.

Now, these experiences themselves need delivery through end points.  And if you’re going to deliver these high-value experiences to millions, you have to protect that information.  And our Enterprise Mobility Suite is the fastest-growing product that Microsoft has ever had.  Of all of the assets we’ve ever built, the highest rate of adoption across customers of any product we’ve ever had.

This is a must-add aspect to every solution that we deliver together in the cloud.  And I ask you all to embrace and continue the growth and success that we’ve had of this capability.

When I think about it, and bringing it all together, again, it sits on the foundation of security.  Now, let’s be clear.  There’s no company on the planet that can deliver every capability around security that a customer needs to protect against every single threat vector that is out there.

Unfortunately, we have a world where there are a lot of folks out there trying to present new threats each and every day.  But there is only one company and one partner ecosystem that can provide a strategy for customers from the device through the cloud to the datacenter, and that is Microsoft and our partner ecosystem.

And that comprehensive support that we can deliver to customers is truly unique in the industry.

So pulling it all together, driving cloud adoption across productivity, business applications, and the intelligent cloud platform is our unique differentiator.  It’s a way in which we can provide value that no other ecosystem can provide.

If I move on to our third priority, if you think about the great demos that were done on stage, I myself wish I had a power drill up here right now.  Might raise the level of energy and excitement in the room.

But I hope what you took away from that Windows 10 presentation was that there are 350 million users of Windows 10.

Now, what does that mean for all of you?  One word:  opportunity.  Why?  Because those consumer features, all of the great things that Brian and Yusuf showed on stage, that’s creating 350 million pieces of demand creation for all of you.

Let’s not forget how this company had its first revolution of growth.  It was because people at home had rich PC experiences and then they came to work and had to stare at a 3270 terminal.  They wanted those experiences at home to be alive and well in the workplace.

With Windows 10, you get this dual benefit of bringing these awesome fan features to life across a litany of devices from wearables to phones to fabric to tablets to large-format devices and even the promise of holographic computing with one OS.

You get all of that consumer value and you can address all of that demand with the added benefit of deploying the most-secure operating system we have ever delivered to market.

So if you’re sitting there as a CTO or CIO inside of a company, this is the quickest win that you can achieve for your enterprise.  Wow.  All of this great consumer value, great end-user value inside of my enterprise with the added benefit of the most-secure solution on the planet.

Next priority, data.  So I might be the oldest and longest and perhaps the last database seller in the room.  Folks, I’m here to tell you that data is the new black.  And we are the only ecosystem — the only ecosystem — that can truly deliver an enterprise data estate for our customers across relational constructs inside of the datacenter all the way through non-structured data running in the cloud.

Why does this matter?  It’s the ticket to the C suite.  It’s the ticket to a visit with the CFO and the chief sales officer and the chief marketing officer, even the CEO, because they’re all looking for intelligent analytics and intelligent understanding of the businesses that they run.  And a system can only be as intelligent as the data over which it reasons.

In addition, with all of this great innovation that we brought to life with SQL 2016, we’re also democratizing data.  You can do everything that you can possibly dream of doing with data with SQL 2016 as the foundation, whether it be rich analytics, whether it be high-performance compute, whether it be expanding into the cloud.  You can do all of these things, but you have to be willing to spend one tenth of that of the competition.  Delivering a data estate in a democratized way for customers.

If you think about what all of this means and all of this translates to, there are 10 great reasons to go out and talk about data and talk with your customers about starting with SQL 2016 as the foundation for growth of their data estate.

So, again, to use our metaphor of talking to technical decision-makers and business decision-makers, my three favorite things to talk about when I’m talking to a CIO or a CTO is to talk about all of the great performance and analytics capabilities built into the database.

If you want to do statistical programming in R, it’s in the database, it’s not a separate bolt-on capability.

We are the most-secure database on the planet.  You can encrypt a row of data and manage it entirely through the transaction, at rest, throughout the state and life of the transaction, and no other company can deliver that.

The third favorite thing I love to talk about is if you want to build a table of data with customer information inside your datacenter and have three months’ worth of data living inside your datacenter and three decades’ worth living outside, you can do that.

If you wake up the next morning and decide you want to change and have three weeks’ worth of data on premises and four decades, you can do that by simply moving a slider bar and not changing a single line of code and reason over all of it with sub-second response.  True hybrid capability built into the database.

So if you want to talk tech, there’s no better database than SQL 2016.  But more importantly, if you want to talk to business owners, the ability to build this data estate from inside their datacenter to the cloud, harnessing every facet of data, we’re the only ones who can do that.  This partner ecosystem, the only ones who can deliver against that vision.

If I think about our fifth priority, I really want you to soak this in.  Of all of the things that Microsoft could focus on, we picked six priorities for next year, six.  You are one of them.

ISVs and systems integrators are of the utmost importance to Microsoft.  They always have been, but perhaps now more than ever.  And there are two types of partnerships that are more important to us than ever before.  Those where intellectual property is created and built on top of the platform and optimized for the same, delivering against the value and the vision of digital transformation, and those companies that provide the services that make our products become solutions in the eyes of customers.

You will see us invest very heavily in our ISV community this year.  And Guggs spoke very well to this.

We want to design into AppSource the most-comprehensive IP portfolio of products, the very best industry solutions, the very best horizontal solutions into our portfolio that is represented by AppSource.

And then once we’ve designed that in, we want to sell through with you and drive value for you, expand customer audiences for you, make you more successful in the eyes of customers around the world.

Again, we’ve instrumented our entire sales force to operate around this.  Everybody at Microsoft is compensated when you win.  We are aligned together and always will be.

When it comes to services, we need to continue to partner together, and more so ever than before.

My expectation that our aligned co-selling and enablement efforts with all of you will only increase over time.  We’re introducing all kinds of investment sources for all of you.  We have massive investments in cloud funding to kick off proof of concepts to work with you, with customers, and if you’re not getting what you need, let us know.  We’re investing to make you successful.

We’re re-pivoting our entire partner organization to focus on enablement.  More technical skill and expertise to serve you in the marketplace as you build out your practices.

Once again, we’re here to make you successful.

So when I think about our sixth priority, it’s making experiences come to life through hardware.

Now, honestly, I get a lot of feedback about this priority.  Gosh, Judson, should we really focus on hardware?  What does hardware have to do with digital transformation?

Let me make one thing clear:  Hardware is the last mile, the last mile of the experience.  And digital transformation does not come to life until we actually marry together our hardware solutions, whether they be first-party or third-party hardware solutions, they don’t come to life, these experiences don’t matter for customers until they’re touched by all these form factors.

And now, more than ever, through Windows 10, we have the ability to bring these experiences to life in a common fabric across every form factor, across everything we do.

So when you think about consumer experiences, whether it’s young Garrett, the 11-year-old piano composer, his experience doesn’t come to life until he can actually compose music on a Surface.

Whether it be BNSF reinventing track inspection through a Windows tablet or Land O’Lakes with the Internet of Tractors taking 100 bushels of corn yield per acre to 500 bushels of corn per acre through our experiences that we bring together to life.

So those are our six priorities.  Those are our areas of focus.  These are exactly what I will share with the Microsoft sales force next week.  I can’t over emphasize how we are aligned and how we are shared in our success metrics, in our focus, in our higher calling, our mission, our bold ambitions, our desire to bring digital transformation to life.

So if I could leave you with a call to action.  At the end of the day, it’s really about one thing:  It’s about customer success.  It’s our top priority together.  It’s the No. 1 thing that should drive us all, and we have to start with the customer.  We have to understand their technology agenda and apply the bold ambitions.  We have to understand the desired business outcomes that they want and deliver against the four pillars of digital transformation together.

Last but not least, we have to embrace our own readiness, our own learning agenda in order to reach the potential that we have together for our customers.

So whether it be pursuing the new Microsoft Professional Degree Program that Guggs talked about, or embracing your own learning, we have to continue to strive for improvement of our capabilities to reach our potential on behalf of our customers.

A final thing to leave all of you with is that we’ve never had an opportunity like this before.  If you saw the opening video, now is the time to be amazing.  Now is the time.

I couldn’t be more excited to embrace that journey with you, to wake up every morning and look in the mirror and say, “Are you ready to be amazing?”  I’m excited.  I’m humbled, and I’m honored to be here with all of you.

And the final thought that I’ll leave with all of you is that I work for you.  My goal is to make all of you successful.  And I’m super excited about the opportunity that lies ahead.

So if there’s ever anything you need, please reach out because we’re here to serve.  Thank you.


(Video:  Unbroken aka Inspiration.)