Phil Sorgen: WPC 2014 Keynote Day 3

ANNOUNCER: Ladies and gentlemen, please welcome back Phil Sorgen. (Applause.)

PHIL SORGEN: All right, nothing like getting the day started with some great blues. I have to thank Buddy Guy and Quinn Sullivan. What an amazing performance again to start the vision keynote. That’s two days in a row.

And I have to say on behalf of all the Microsoft people here, we’ve so appreciated the connection the first two days of this conference, and we still have a lot more time to connect.

So welcome back, everyone. We have a great morning planned for you. We’ll talk about selling in a modern world. We’ll talk about winning the next billion customers on Windows together. And then something we’ve all been waiting for, Satya Nadella will take the stage and talk about his vision for the future of Microsoft and your place beside us.

But before we jump into that, I just want to take a few minutes to frame how I think about investments broadly in our partnership. These reflect the promise we make to you every day, and how we can help your business grow today and tomorrow.

I view this as the four pillars that represent the full portfolio of what Microsoft can offer our partners.

The first pillar is we develop and deliver world-class products and services.

The second pillar is creating markets that you can sell in.

The third is enabling your business success.

And the fourth is our focus on the last mile of sales and marketing execution with you.

My team and I work across the company to drive balanced execution across these pillars, and I want to take a little while to walk through each one of them, just providing you a few examples of what you can expect.

The first way we invest in partners is just fundamental and core to our partnership. We work hard to deliver world-class products and services that our customers want and that you can build a successful business around.

It’s pretty simple why I start with this one. If we stop creating world-class products that our customers want and that you can build a business around, the next three pillars don’t matter. We know our ability to innovate will determine our success, and it’s why we invest over $10 billion in R&D every year.

And you can see these investments pay off. FY14 was our biggest innovation year ever, and this year is on the same pace.

But we know innovation alone is not enough. Our route to market is through you, and you need business opportunities that fit your business models, opportunities to grow your success with Microsoft. So to ensure that there are great opportunities, we’re focused on making sure that the partner opportunity is embedded in every product and service we bring to market. In the last year, we’ve introduced dozens of programs, business models and licensing models designed to drive your growth. You heard about five of them on Monday alone.

Across the company we’re listening to your feedback and working hard to bring more opportunities to you faster. And while it’s been a year of good progress, we will continue to accelerate our efforts in this area.

Now, the second way we invest in you is by creating markets. We know your cost of sale goes down when your customers have a preference for Microsoft products.

Now, we have the global reach to create awareness broadly for the products and services that you’re selling, but we need to go beyond awareness. We address this by investing in platforms and campaigns to drive your growth.

Now, I want to highlight just one example of a campaign we’re bringing into market this fiscal year. This is the Modern Biz Demand Generation campaign. It’s a multimillion-dollar global campaign featuring cross-product solutions targeted at the small and midsized business space. For those of you that focus on that customer segment, you know this is a high-growth area where we’re seeing rapid cloud adoption. This particular campaign goes into market on August 1st.

But beyond our enthusiasm and excitement about the opportunity that this campaign means for you and for us, I want to call your attention to the lower left corner of the slide. The Modern Biz campaign has a strong partner call to action, as do many of the other campaigns across segments that we’ll be driving this fiscal year. And leads generated through these campaigns will be routed to Pinpoint and the local teams and on to our partners, which brings me to our next investment, which is Pinpoint.

For those of you not familiar with Pinpoint, it’s a marketplace where customers can go find partners who can help them.

But I’m excited to announce an important new release of Pinpoint that’s coming to market in September. This new release will be better for customers trying to find the right partner, and better for each of you.

The new site will be modern and easy to navigate, but more importantly we’ve worked a lot on search relevance, which leads to better, higher quality referrals for you. And those referrals will be integrated into a new lead management dashboard, so you can track your progress.

We are also introducing a new seller dashboard to help you with your sales.

So I encourage you to go out to Pinpoint and make sure your profile is current with your qualifications and your differentiated value. And if you’d like to get a look of this new site before it’s released in September, stop by the MPN booth in the expo center.

Now, the last area I want to cover in creating markets is where we pull together our global reach and your unique value. And this is a platform we call a Partner Marketing Center. And what you can get out of this Partner Marketing Center is branded and customizable demand generation and marketing materials that help you generate more business.

Now, many of you use the Partner Marketing Center today. As a matter of fact, we’ve had over 275,000 assets downloaded in just the last year, and that number is accelerating.

Well, what’s new about the Partner Marketing Center is now it’s fully integrated into MPN, and we’ve now expanded it to 26 languages and 52 locations around the world, and we’re going to continue to expand it further for your benefit.

And if I take you back to the Modern Business Campaign that I just mentioned that we’re putting in market, that’s an example of an asset that will be in the Partner Marketing Center so you can use it as well, along with many other campaigns, to help lower your cost of sales and generate more business.

Now, for the next pillar I consider the Microsoft Partner Network at the very center of the investments we make to enable your business.

Now, beyond the benefits like support, internal use rights, and training and readiness, we’re listening to you and making sure that we deliver the kinds of tools that help you work through the pace of change that’s happening in this industry today.

This year, we’re doing a lot more to help you keep pace with the changing marketplace that we all see.

So to give you an example of how we can help in this area, let me take you back 12 months. Last year, on this stage we showed you why cloud has proven to be a compelling and profitable model for partners who invest. We showed you that partners who primarily sell in the cloud are growing 2.4 times faster. They’re delivering 30 percent more revenue per employee, and they’re acquiring new customers at a rate 1.5 times non-cloud partners. Kevin mentioned this on Monday as well.

And this opportunity is only going to continue to accelerate, with customer demand for cloud and hybrid services projected to reach 190 billion by 2020. So the opportunity is clearly there.

And many of you have embraced this opportunity, but you’ve continued to tell me that you’d still value more information on how to continue to adjust your business in this ever-changing market.

And we’ve created a site dedicated on the partner portal to profitability in the cloud where we’re regularly updating the assets. It goes beyond just the opportunity into the details of the how, because when I’ve talked to a lot of partners, you’ve asked me, how do you adjust your business model or adopt new business models, how do I structure my sales force, how do I differentiate or innovate?

We’ve worked with analysts from IDC and many of our own partners, who have taken different approaches to building profitable cloud practices, so that we can give you a real-world perspective and help you answer those questions for yourself.

As a matter of fact, we just launched an e-book with IDC, available today in nine languages, on cloud partner profitability. And if you want to see that e-book today, just go out to the partner portal and search for cloud partner profitability, and you’ll find it.

We’re committed to helping you keep your edge in this changing market, and we’re confident that these profitability resources are going to help.

Now, as I said, MPN is core to your enablement, and Gavriella Schuster was on this stage on Monday talking about the new cloud competencies for Office 365, Azure and later this fiscal year CRM Online. This is your feedback at work, and these new competencies unlock the richest value proposition in the industry.

Now, it’s true, we’re talking a lot about cloud benefits, but I want to be very clear, every partner, regardless of your business model, will see additional benefits to increase value and lower the cost of partnering with us this fiscal year.

Now, the final pillar is our sales engagement model. And when I think of this, I can’t help but emphasize the 3,000 Microsoft employees, whose job every day is working through you for both marketing and sales efforts, 3,000 people whose success, whose own success, is driven by helping you realize your vision with Microsoft. That’s an industry benchmark we’re really proud of.

And there’s more with new investments and the big bets we’re making around Azure and CRM Online, and these bets are going to help us grow these businesses faster and help you accelerate your business.

Now, I’ve only scratched the surface as I’ve summarized these pillars, but I wanted to give you an idea of the portfolio view that we take to how we invest in this partnership, and the work that my team and I do to make sure we drive this initiative across Microsoft.

So I just want to close with my commitment to you. My mission, plain and simple, is to increase the value of your partnership with Microsoft, to lower the cost of partnering with us, of making it easier to do business with us. That equation results in increased profitability. You have my commitment that this is the filter that I’ll use to drive decisions in my organization and I’ll work with my colleagues across this company.

Look, navigating this changing market is a journey, and while we don’t have all the answers, there’s one thing I’m very, very certain about. Our success in a mobile-first, cloud-first world will be achieved through a highly successful partner ecosystem. The complexion of this ecosystem may be a little different than it has been in the past, the business models reflected in it may be a little bit different, but I’m confident there’s a place for every single one of you in this future, and we want you with us.

There is so much opportunity out there, and I’ve never been more confident in our ability to succeed together.

So let’s go win it together. Thank you. (Applause.)