Steve Guggenheimer: Worldwide Partner Conference 2016

Remarks Steve Guggenheimer, Corporate Vice President, Developer Platform & Evangelism, and Chief Evangelist for Microsoft, in Toronto, Canada, July 13, 2016.

DAVID FUESS:  Thank you, Gav, what a great speech.  I’m David Fuess, CEO of Catapult Systems based in Austin, Texas.  We are honored to be the U.S. Microsoft country partner of the year.

I believe the value of the Microsoft ecosystem is more important than ever before.  Our goal at WPC is to connect with the Microsoft leaders to map out our business strategy for the year.  We’re focusing on also connecting with other partners, especially ISVs, to find new opportunities to drive our businesses forward.

Now, ladies and gentlemen, it’s my pleasure to introduce Microsoft Corporate Vice President, Chief Evangelist, Steve Guggenheimer.  (Applause, music.)

STEVE GUGGENHEIMER:  Good morning, WPC.  I hope you guys are having a great week.  I’ve had the opportunity to meet with a number of partners over the last couple days, and the energy is just outstanding.

Now, there’s been a lot of discussion around transformation.  Brad talked about revolution.  I want to highlight the fact that the other side of the transformation road is disruption.  And for all of the industries, companies and sectors that are transforming, there’s a set of startups out there and a set of ISVs that are trying to disrupt these.  The things that we’ve done, the way things have worked.

And the best conversation of all is when you can bring together disruptors and transformers for entirely new conversations.

And it turns out in this world of disruption and transformation, software is the bridge and developers and ISVs are all of our friends, partners, co-workers, and folks we need to connect with.

There are a number of ISVs here, and so I want to sort of bridge the traditional partner conversation and the ISV conversation through a bit of story and a bit of what we’re doing to help build those bridges.

Now, it’s technology that’s driving the change.  Brad talked about physical, biological and digital.  And in my belief, it’s the software that’s doing the bridging between all of those.

And even if we look just from last partner conference to this partner conference, the conversation and bots, conversations as a platform, where we are with augmented reality, cognitive services, IOT, et cetera, it’s moving incredibly fast.

Kirk said yesterday that the clock speed is increasing, and that is absolutely the case.

And in this world, developers and ISVs have never been more important because that’s the piece that brings it all together for our collective customers.  And this pace of change is not going to slow down.

I like to always bring this to life through stories.  Last year, I talked a little bit about digital transformation and software disruption and transformation through the conversation of the connected cow.

If you put a pedometer on a cow and you watch how they work, turns out you can make more cows, and turns out with some new software companies, you can more efficiently make milk.

So that was last year’s conversation.  I wanted to pick one for this year that we could all relate to.  So I didn’t pick one of the industrial retailing or banking, et cetera.  I picked television because, frankly, I sort of like TV.  I’ve grown up with it, and it’s something I think everyone can relate to.

Now, in terms of television, or if we’re going to be disruptive in this conversation, we’re going to talk about digital media.

For the first 40 years, there was essentially a set of broadcasters out there who had a direct pipe over the airways to a set of customers who watched television.  And in the U.S., we had a couple of stations.  And if you’re as old as I was, I was the clicker when I was young.  When dad wanted to see a different channel, Steve got up off the couch and he turned the channel and we got to watch one of the three stations.

A friend of mine said backstage, he supposed, “You were lucky, we only had one station, it was government run, so be happy you got to be the clicker.”

Now, that was the first 40 years of digital media or television.

The second wave, let’s talk about the second 40 years.  In this era, sort of cable networks came along.  They laid the pipes out to the house so that all of a sudden we could get an explosion of channels, Cable News Network, MTV, et cetera — at least in this country — that were then delivered to the home via cable or satellite and you had a set-top box next to the television that would decode the signal and allow for a whole bunch more channels.

That created a new distribution arm between the content creators on the right side of this slide, us viewers on the left side of the slide.

But it’s pretty much around more channels, really interesting bundles that we could go and buy, and the growth of television in that sense.

Now, that was that second 40 years.  If we take the next 10 years, I tend to think about the notion of when technologies converge, industries collide.

There’s this notion of logical separation between the folks that build or create content, the folks that distribute content, and how we view and aggregate content.  It sort of gets all blown up.

Because what happens now is when all of the content goes digital, all the media is all bits now, all of the pipes are TCP/IP based, and all of the decoders now, essentially, all of the screens can decode themselves.  This notion that there’s only one path to the customer or one way of doing this is sort of gone.

So if you look at Hulu, Netflix, or Amazon in the U.S., they’re not just the distributor, they’re creating original content.

If you look at the traditional networks that are out there, they’re not just creating content, they bought cable companies, they bought distribution companies.

And if you look at the receivers now, you could be watching television here, I hope you’re not, but you could be watching television on the train, on any type of device that has a screen, because all of the capabilities are now consistent.

And that leaves for incredible change in a very short time, basically in the last we could say seven, six, five, 10 years, doesn’t matter.  Brad showed how quickly things change.

In that world, lots of opportunity for both transformation and disruption.

I’ll leave the left side alone.  Obviously, you guys are aware of Xbox in terms of its capability and Xbox One as a service.  Apple TV, Roku, et cetera.

But if we look in the middle on the distribution side, the first company there, Deltatre, it’s a transformer.  It helps sports leagues and sports teams stream live media, basically their live events, over this new pipeline directly to end users across all those devices.

And they were at the Olympics in Vancouver here, they were at the Olympics in London, they do rugby, one of the ones I like, they do European golf, tennis, et cetera.  Very focused on an industry, helping with the transformation.  They’re a 30-year-old company so they’re playing right in the middle of this.

I’m similar, but for broadcast television.  Traditional broadcast television, you have a broadcaster at some point anywhere on the planet, essentially.  And as they distribute out, they need to sort of take their content and make it available in all the areas to affiliates.

Now, in the case of affiliates, if I’m in Seattle watching a show and I’m in Vancouver watching a show or Toronto watching a show, I might want different ads or information inserted in that.

So they have to build a pipeline for distribution, ad insertion, the best way to serve their customers.

Imagine us helping them move from private cloud, because that’s how they’ve all done it, to public cloud enabling digital VCR capability, enabling digital ad insertion, helping the entire broadcast industry transform.

Those are two transformers, software companies that have been around a while.  They’re sort of in that transformation/disruption area.

Sling, that one’s pretty disruptive.  Sling started as a box you put next to your TV.  You could sort of remotely watch what was going on in your television if you were sitting in a meeting, maybe in Redmond, not that I would have ever done that, but you could over the internet.

And as sling moved from being a physical box, they said, “Hey, I can make this a service.”  And they’re now basically going the opposite direction of cable or satellite, which bundles a bunch of channels together, and allowing you to unbundle and create your own personal bundle of whatever television programming you want.  So you can subscribe to different services or different content and watch it through their service on any of the devices that are out there.

So that’s an interesting way in terms of how OTT and how media is moving from bundled to unbundled.

Now, a couple of examples from the content creation side.  If you look at Setkeeper, this is a startup out of France.  They just went through our accelerator.  If you look at the production of movies or television shows today, it’s all manual.  It’s paper for scheduling the actors, the food, the sets, the props, the costumes, you name it.  I would bet backstage here, we’re probably doing some of the same.

And it turns out they’re building an ERP system for the creation of movies.  You want to digitally watermark the script, you want to make sure the actors are there at the right time, you want to make the most-efficient use of your resources.

Very popular, actually, as the shows and television has been done manually for a long time.

And, by the way, just to segue, this is happening everywhere.  I was at NASCAR event two weeks ago.  It turns out, the way they’ve checked the cars for racing for the last, I don’t know, 10, 20, 30 years, paper and pen.  Right?  About six hours.  They’ve cut the time more than in half moving to a digital system.

Turns out, they’ve put it in the cloud so they can track who’s trying to cut the corners, right?

So the movement from physical to digital in terms of production, big change.

WSE, another startup out of the Israel accelerator.  So for all of the streaming content that a Deltatre would put together, in this case sports events, they take that, they use machine learning to chop it into little bits.  And if you want a 10-second clip or a 30-second clip of this sports athlete or that sports athlete or this event, they’ll give it to you exactly the way you want it, exactly the time you need it, and they’re using machine learning to do that, and maintaining the broadcasting rights.

Broadcasting rights gets to be another interesting area.  So it used to be that you created a movie, went to the big screen first, then they sold it to the airline so you could watch it on the airplane, pay per view on the cable network or satellite network, then sort of free on cable and free on TV in a big, long distribution chain and rights.

Well, add in Netflix, Hulu, the local version of every one of those, add in all the different devices you can watch it on, add in all the actors’ rights, very complex distribution rights.

And so Avatega was using the Dynamics engine and the Dynamics — not 365 yet, but the existing Dynamics engine to do all of that rights management.  And it only gets more complex in this world.  And so they’re using software and services and the cloud to do that.

Last, but not least, LiveArena (cheers.)  They’re here, I love it.  LiveArena will allow each one of you to be your own broadcast channel, right?  They actually offer a service that allows you to have the equipment you need, the training you need to set up your own television station as an individual organization, and their belief is that every person on the planet can be a television channel.  And they’re building that as a service, so they’re using Azure on the back end.

So tons of examples in this particular space of disruption and transformation, taking something that we’ve grown up with, television, and reinventing it from the ground up and sort of creating an entirely new set of opportunities for us as end users and for software.

Now, let’s rein that back in a little bit and let’s talk about transformation and disruption in the software industry and with you, our partners, and with Microsoft.  Right?

If we look at the eras of computing that we’ve all sort of grown up with, you can see the evolution of the partner channel and the relationship with ISVs and other types of partners.

In the client era, right, Windows and Office, a large part of our channel and partners were actually retailers and system builders.  People who put together hardware and they put Office and Windows on top of it, and then developers who built solutions on top of it.

But retail system building, some amount of SI were the core in sort of the largest part of the channel.

As we went to client-server computing and Office added SharePoint and Exchange and Windows added Windows Server and SQL Server and SMS Server, et cetera, et cetera, the licensing got a little more complex with client access licenses, CALs, server licensing.  So an entirely new channel was extended in terms of not just the management and setting up the software and the management of the infrastructure for a company, but the entire licensing process, the entire business around it.

The ISV channel grew because we had more client-server computing opportunities.  The entire ecosystem, this partner ecosystem, grew during that time period.

As we head into the mobile and cloud wave, and we’ve seen all the innovation and what’s going on with Office 365 as a platform, Windows 10 as a service, Azure and the data side of this, there’s an even broader opportunity for those people that are creating unique software, ISVs.

And as we think about it, that entire ecosystem is going to continue to grow.  And for us as a company, we need to find the right way to support the ISVs, connecting them with all the other partner types and creating an even-richer ecosystem as the importance of software and unique IP continues to grow.

In that area, we’re working on how do we create a connection between the people that build software on the Microsoft platforms and our traditional sales force and our traditional partner force?

And for ISVs that are out there and folks that are creating content and creating software now, we’re going to have a series of offerings.  We’re going to try and line them up evenly with the silver competency or the silver partner motion and the gold partner motion.

If you build an application or a service on one of our platforms, we have the marketplaces.  Scott showed that off, Kirk Koenigsbauer showed that off.  That’s a very logical starting point.

If we start to do some work together and you help us drive usage of Office 365, of Azure, we can do some co-marketing.  We’ll get together, make some noise, make a pop, we’ll talk about you on stage, and we’ll find the right place.

As you drive more consumption, we’ll sort of bring that together for our sales force.  Right?  We have a catalog of ISVs who we can show off by industry, by country, so that every sales rep in the Microsoft field knows who’s available in their country for which solutions, and in many cases the multiple offerings that are out there.

The further we go together, the more we can do custom go-to-market material, the more we can do custom sales, we can connect your sales force with our sales force.

It’s not infinitely scalable.  So there will be layers here.  But we want to make sure we’re doing as good a job as possible at taking the ISV side of our partner community, connecting them not just with our sales force and our marketing engine, but with all of you as partners who are working with our customers mutually.

And so bit by bit, step by step, I met with a ton of partners this week and ISVs, we’re starting to build those bridges.  We’re starting to build the infrastructure for this.  And over the next year, you’ll see us roll out lead management between our ISVs and our sales force.

Gavriella talked about connecting ISVs with our partner community, and we’re going to continue to grow that capability.  Because in the next wave, in that transformation disruption wave, the importance and criticality of ISVs to all of our success is front and center.

Now, part of working with the ISVs in this space isn’t just showing up once and sort of having a one-time relationship.  We really do focus on building enduring partnerships with the ISVs that we work with.

There’s a number that are here.  AT&T made an announcement yesterday.  They’re bringing their IOT platform to Azure, they’re building a starter kit so that together developers in this audience and other audiences can work on AT&T and Azure together to build solutions.

SiteCore, a great announcement today of their deepening partnership on Azure, bringing marketing capabilities to their and our mutual customers and infrastructure capabilities.  Atom Software works with them.

We had Awingu here yesterday, Unit 4 last year, so a set of partners that we work with not just once, and not just bit by bit, but over time to build the relationships and build the partnership not just with Microsoft, but with our partner channel so we can all scale together.

Now, it’s better said by others.  So I’m going to run a quick video from our friends at Mesosphere, ServiceNow, Imagine, and a few others to sort of highlight this conversation.

(Video:  Partner Success.)

STEVE GUGGENHEIMER:  I want to thank our partners for helping us with the video.  There’s an important message there.  There’s a set of ISVs and partners we work with for a long time that we will continue to work with and support.

And there’s a set of ISVs that didn’t grow up with us, never worked with us, that we’ve opened the doors to.  And Scott and Kirk and Yusuf showed how that’s going.  And the truth is, between the platforms we’re building and the work that our collective teams are doing, it’s a much broader ecosystem than it’s ever been.

We have the ability to address a broader set of solutions, a broader set of customers through a broader set of ISVs.  That is at that connection between transformation and disruption.

Now, the last piece that I want to just highlight on quickly is as we go through this era and this change, the pace of change is increasing.  And one of the requests I get is for people and developers that are skilled in taking advantage of these new trends whether it’s IOT, big data, data analytics, web or front-end development, Azure or cloud development.

And there’s a gap today between the short-form learning that’s available.  We do a ton of courseware through Virtual Academy in partnership with edX, you can watch videos. We do deep certification through our Microsoft Learning Partners.

But if I have a math professional or somebody from the STEM background — science, technology, engineering, and math — who’s used programming in university most likely, but isn’t an expert in an area, we want to help create an opportunity and a degree system for those professionals to get deep on a specific area.

So I’m happy to announce today the creation of the Microsoft Professional Degree.  It’s essentially a program that mixes together all forms of learning — self learning, some video, some online, a certain amount of testing, help from mentors and others.

Think about a four-month program.  We’ve been piloting this one around data science.  We have 900 people, some from Microsoft, some from our partners.  The first batch we think will graduate or finish or complete in September.  We’re looking at future technologies.

But we think this will bridge and help someone, for example, who has a math background, but hasn’t used all the tools with cognitive services and the R language to become proficient in using those tools so they can help in the data science area.

Somebody who has specific industry expertise that you want to mix that industry expertise with the ability to take advantage of data science to drive your business forward.

So we’re announcing the professional degree today.  If you want to learn more about it, and for our Microsoft Learning Partners, big shout-out to them, we can go by the booth and we’ll talk more about this.

And with that, I want to just say, first, thank you for your partnership.  The platforms never rest.  The conversation next year, the technology, and the clock speed will only increase.

So as we work together, let’s both transform and disrupt together, help our mutual customers and continue, as Brad said, to drive the fourth revolution forward.

With that, thank you so much.  Have a great day.

(Cheers, applause.)