The VARBusiness QandA: Microsoft COO Kevin Turner

Nearly a year has passed since Microsoft's top brass tapped a near-20-year Wal-Mart veteran to run the world's largest software company. Kevin Turner, now Gates and Co.'s COO, started humbly as a Wal-Mart cashier while attending college. He climbed his way up the ranks on a combination of business-savvy and technical acumen, eventually becoming an executive vice president and CIO of the retailing Goliath. By the time Microsoft CEO and president Steve Ballmer came a-knocking, Turner was running Wal-Mart's Sam's Club franchise, a $37 billion business. Turner has spent the past 11 months circling the globe--three times to be exact--meeting with Microsoft's army of partners and throngs of customers. He hopes to turn feedback into productive strategy and help marshal the company's latest initiative, the "People Ready" business. Turner sat down in Redmond, Wash., recently with VARBusiness' Carolyn A. April, managing editor/special projects, and editor Lawrence M. Walsh to share insights from his first year at Microsoft and talk about how partners fit into the the company's newly unveiled vision.

VB: What's the most interesting thing that you've learned, switching from the customer side of the house to the vendor side?
Turner: One of the most interesting things is that Microsoft is truly a global company. With that comes a lot of opportunity in the different time zones, and how do you help orchestrate a business with far reaches to every part of the world? It's really been an interesting experience for me, and I'm continuing to learn and grow into that. I think the amount of innovation and the capacity of the company to turn out the innovation is something. I'm still pretty amazed by what's going on in Microsoft research and what products we have coming out. I mentioned the $20 billion in prior-year R&D spending. The field and our partners are ready, and they want it, and so that's going to be exciting.

VB: What are your specific operational responsibilities?
Turner: I'm responsible for all of sales, all of marketing, all of services--our customer-support services and consulting services. I'm the only sales guy I know who also has responsibility for IT. I've got all the operation centers, all the invoice processing and all the licensing agreements. I have pretty much everything, except the product group's development and research.

VB: How do you keep up with all of it?
Turner: One day at a time. The day starts early. Some days, it ends late.

NEXT: Turner's biggest partner pain point.

VB: What's the biggest pain point you've come across in talking with your partners?
Turner: I think making it easier to do business with Microsoft is something we have to do. I think we have to get our people more equipped to have conversations around licensing and contracts. I don't know that we'll ever make licensing and contracts simple, but I do know that we need to make it simpler. Partners talk to me a lot about innovation and what's coming, and how they equip themselves to take advantage of that. They're not bashful about how to help us improve.

VB: Given the vast number of products in the pipeline, do you feel comfortable with the capacity you have on the partner side?
Turner: I think we're always looking for more partners, and we're always looking for new opportunities to go to market and increase our channel capacity in a thoughtful and mindful way. And I think that, again, the broader our portfolio gets, the stronger that muscle becomes around how we bring people into the system and equip them with capabilities--both existing partners for new solutions and new partners for new solutions. I think that's something we have to continue to improve upon and expand.

VB: You've mentioned skill shortages. Can you elaborate on that a little? Does software as a service play a part in alleviating those shortages? And how do partners fit into this shortage/relief paradigm?
Turner: It's not a secret that the skill-shortage opportunity exists not only in the partner channel but also in the engineering fields, and in the specialist fields, and that's certainly something we deal with. I think that our commitment is to the training and education and the ability to give people a platform so that they can develop those skills. In fact, we have some of the best education programs of any company. How do we continue to plug the right people into that system, and to turn out the quantity and quality of people that we and our partners need to fill out their channel? Our whole program of being able to continue to develop people is a very fundamental part of the 'People Ready' infrastructure we're trying to build. And having people at the center is certainly the thing--the calling, the magnet, the true north--that brings us back to the center so we don't get too busy and forget what our job is. And our job is to make sure that we take care of our people and our partners in that process. So I think it's just a fundamental thing that we're all working on and continuing to develop.

VB: When you were at Wal-Mart, I would imagine you had a lot of opportunity to purchase from a variety of different companies. How has your view of the competitive landscape changed since you've come over to Microsoft?
Turner: Well, I think that there are fewer real choices in the marketplace now than 10 years ago. What's left is a whole lot stronger and better-equipped, and there are certainly some very competitive companies. And I think that competition is something that we, as a company, embrace. It makes us better. The hardest product to run at Microsoft is the one that doesn't have competition. So I actually think there's a healthy side to competition, in that you have constant [pressure] to keep improving, and you have to earn [your keep] every day. I'm as competitive as the next person; I want to win every day, in a fair and legal way. At the same time, the competition makes us better, and we have to continue to innovate, outhustle and outthink our competition. I think this is a company that's very competitive by nature, and one that I'm very compatible with.

VB: Having come from a large company that worked with a number of different technology vendors, could you argue both sides of the fence? That is, is it better to go with a diversified type of technology environment or, as Microsoft wants it, to go with a single stack?
Turner: You've got several things that drive those decisions. One is your budget. If you're an IT person, what is your budget? What can you afford to do? Can you come in under budget? And, secondarily, can you create business value? Budget and value proposition are overriding principles from which you have to pick the best solution. I think it's great that there are certain solutions that work better independently and certain solutions that work better together. With each product we produce, we want to be able to compete with the best product. I think [what's good] is that we offer a choice--that we connect all the stuff and, at the same time, try to make it easier for customers that don't want to manage the integration, because there's complexity involved in that integration.

Part of what's great about Microsoft is that the customer and the partner get to choose. And I think that's something we're very supportive of. I think our customers have told us they want more of a solution approach than a product approach, which has forced us to connect more of the dots. But if you think about the history of the company, Microsoft built one standalone product at a time. Generally, we started in the consumer space and moved into the business space. Putting our ear to the ground is really helping us figure out how to design and develop our innovation portfolio in a way that allows us to address where the customer is going, vs. where they've been. A mistake that some companies make is that they focus on coming out with a solution based on where the customer has been. Microsoft is committed to connecting the digital lifestyle and the digital workstyle and bringing that to the marketplace. We're really positioning ourselves in terms of where the customer is going, and in a thoughtful way.

NEXT: Turner's biggest partner pain point.

VB: When you talk to customers, and even partners, are you hearing a lot of discussion about open-source technology as an alternative?
Turner: Open source is certainly one of the things that we're sensitive to and stay focused on as a company. Again, it provides a choice. I think the biggest opportunity we have with open source is people really understanding our capability and really leveraging that capability to create business value. Open source is a tough competitor in some spaces, but, for the most part, it makes us a better company and puts the pressure on us to develop better solutions.

VB: Given where you came from, where do you see the role of traditional retailers such as Wal-Mart, Staples and Best Buy in reaching the small and low end of the midmarket?
Turner: There's certainly an opportunity there. Sam's Club, the division I ran, was in business for small businesses. Small-business markets grow anywhere from 9 percent to 11 percent year-over-year. The number of new small businesses is at an all-time high. We've got a big opportunity to build our breadth and muscle and go after small-business solutions. There are people who want to go to the retailer of choice--Best Buy or whomever--and buy their complete solution. And there are other people with very successful small businesses who use our partners, such as Dell and our OEM units. If you go down the stack in the local markets, we have boutiques and other people that participate in the small-business space. So we've got a lot of different channels in that particular arena, but there are more opportunities right now than we're able to capitalize on.

VB: Kevin, you said you like to win. Who keeps you awake at night?
Turner: Well, my kids sleep through the night now, so....You know, I focus on our people and whether we can grow and develop them in a manner that says we can keep pace with the growth of this company. As far as competition, I really don't lose sleep over it, except that there are some days I might get up in the morning thinking about how to win one particular deal in a fair and legal way. In my past life, you lived and died by how well you did against your competitors, not because of them precisely, but in terms of what your offering was relative to theirs. So, in many senses, it's the same thing now. You have to outhustle, outthink and outrun your competition, or you become obsolete.

VB: Are you worried about the real or perceived delays with Vista, about competitors being able to capitalize on that?
Turner: I think the biggest opportunity I see with Vista is making sure that we bring it to the marketplace as a quality product. The product's late--that's not news. But if you have a late product, it needs to be right [when it's delivered], and I think that's what we're most focused on as a company. As a seller in the field that wants to work with its partner channel, we're there. We're waiting on it. We need it. But I'm proud to be a part of the decision-making [process]--the choice not to sacrifice quality for speed.

VB: Aside from all of the things that we've been talking about, is there anything that has really wowed you since joining Microsoft?
TURNER: Microsoft is really bringing technology to places in the world that otherwise wouldn't have the opportunity to see it. I was in a rural-area school in Santiago, Chile, in a classroom with 40 kids that have a PC on every desktop. They were using the Internet with software and technology that we donated three to four years ago. Those are the types of things that Microsoft does. We don't do it to get the credit; we do it because it's the right thing to do. And I think that's one of Microsoft's real mission statements. It's about enabling people and businesses throughout the world to realize their full potential.

It helps draw us all closer to something that's bigger than ourselves. I think that's both a very humbling experience and an awesome responsibility that each and every one of us has as a manager. We need to live up to that, and to let that guide our business decisions and how we interact with our partners and customers.