CRN Interview: Microsoft COO Kevin Turner

Microsoft Chief Operating Officer Kevin Turner kicks off Thursday's sessions with the opening keynote at the software company's partner conference in Boston. Turner sat down recently at the company's Redmond, Wash. headquarters with CRN Editor Heather Clancy, Industry Editor Barbara Darrow, Senior Writer Paula Rooney and Senior Editor Stacy Cowley.

Turner, who joined the software giant nearly a year ago after 20 years with Wal-Mart, talked about the company's "People Ready" campaign, how it applies to partners, and other topics. Edited excerpts follow.

CRN: What's your take on Microsoft's partner relationships and ecosystem?

Turner: Steve [Ballmer, Microsoft CEO] has done a good job indoctrinating me into the fact that it's partners, the great partnerships we have with our partners, [that] built Microsoft in the early years. Being an enterprise customer, I had a lot of different partners in my tenure as CIO [at Wal-Mart].

It's great to visit with partners around what are their issues and what we can improve.

CRN: What's going to happen at the Worldwide Partner Conference?

Turner: The agenda is we set the table for FY 07. The enablement of a People-Ready channel through our People-Ready business strategy, which I'm very excited about. Something we're putting a lot of time and energy in. This is really the core way of how we're trying to run Microsoft, extending into our customer and partner space. Because it's about putting people at the center, which I'm very supportive of and a big proponent and driver of being able to enable our partners and our customers to create business value. We believe that's the competitive advantage that we're driving

CRN: Beyond the marketing how will this message change the process?

Turner: One thing is it's about our ability to get into a couple of things. It's about how we're lining ourselves up to run Microsoft in a people-centric way, which I think is fundamental. I don't know of many companies with external campaigns which also become the premise of how they're running the company. How it shakes out and defines in reality it says we're pushing that flexibility out on the edge where the people who actually do the work are empowered by things like SharePoint collaboration and our software connecting.

You'll see a series of campaigns coming behind the People-Ready launch that connect multiple solutions from us and tell a story. Something we've not done in the past. We've' done it more product-centric, one-at-a-time things, and I'm a proponent of connecting all the solutions.

Another investment we're making is in services. We're a business that's been in and out of the services business and our partners and customers tell us, you need to step up into the services arena and make more of a presence in that to help us, equip us, to take our services to the next level.

Third, it relates to investing in education. The $2 billion we're spending on training and education in the partner program -- I'm very proud of that. That's a significant thing for us as a company to make that investment.

Fourth thing, it's innovation. How do we bring it out? We invest $6.2 billion annually into our R&D budget, which is more than any other technology and software company in the world. The biggest milestone is fiscal year 07. This is the year that we bring about $20 billion of prior-year R&D spend into the marketplace. It positions us in very unique way, an opportunity to turn the vision, the investment into reality.

The reality is to sell to and through partnersas well as customers. That reality falls to the sales force, the field and services group to pick that baton up in FY 07 and really drive revenue and programs.

NEXT: About That Services Push

CRN : Can you speak specifically about the services investment?

Turner: It's not about becoming IBM Global Services. It's about being able to put our products together. The broader our portfolio of products gets, the more need I see for us to be able to connect and integrate those products into a solution.

When I'm around, partners want more technical support, more services, and more tools, as do customers. There's a void there that we have to step up into. As we get into more complex solutions like SQL Server, they don't sell themselves. You have to come in and really have a deep understanding of business processes and technology infrastructure and how those two map together

The more complicated our stuff gets, things like collaboration, business intelligence and CRM -- those are not out-of-the-box solutions and that's a difference for us from the portfolio days of the past and things we have to step into in a bigger way

CRN: But what do you mean by investing in it? Are you putting a ton of money into it? Training? People?

Turner: We're putting some money into it, we're putting some people into it and we're putting some knowledge and skills transfer into it.

That's not a natural skill for us to be able to have our technical specialists be able to connect all the solutions in a thoughtful and meaningful way to create business value for partners as well as customers

And that is where the bulk of investment is going. It's not that we want to be in the consulting business, to tell people how to run their businesses. We want to be in the services business to help sell more products through and to our partners as well as to our customers. That's the real charter difference from some other services organizations that you might know about.

CRN: :I'd like to know how you worked with partners at Wal-Mart and how your view of the partners' role morphed, if it has, since you came to Microsoft.

Turner: I think that one of the neatest things about the Microsoft ecosystem is the ecosystem we have for partners. The fact that through our partner channel we have an extended workforce of over 300,000 people that are enabled through Microsoft partnerships. That's the kind of thing that we don't always do a great job articulatingwhat that ecosystem looks like.

I ask partners what we can do better. Their success stories, how we can plug in and enable them. It fits in both our charter and mission statement as well as the history of the company. I think my eyes have been broadened about how far the reach is for Microsoft and all the different channels and different types of partners. It's very exciting as I go around the world, the opportunities we still have to capitalize on together.

CRN: What are your priorities?

Turner: I can tell you my goal sheet. It is certainly to make sure that we hit our numbers financially. I'm in charge of sales and marketing for the company worldwide, and that's one of my areas of responsibility. So certainly hitting our numbers is important to us. Being able to have a model for growth at the company is important. A key function of my job is execution. Making sure there's process excellence. I also have responsibility for the internal IT department at Microsoft. So I'm one of the few sales guys that will sit down and talk with you all as a group that not only has sales but also has to make the stuff work. Which is an interesting process as you might expect. It's a lot of fun and I'm learning a lot.

When you look at it -- hitting the numbers, growth execution -- people development is very important and probably the one thing at the top of my list. Do we have enough qualified people to take on all the opportunities? What is our development process, putting again people at the center, happy people enable happy partners, happy customers. Those are lessons from my past I've learned. People want to ask me all the time what's different between my past company and this one, and I want to tell them what's the same, and what' s the same is it's a people business there and a people business here. Making sure that we take care of people is my main charter.

NEXT: The Enterprise CAL and Other Licensing Options

CRN: Getting back to services. The thing partners worry about is Microsoft services. Services is a P&L correct? You make money on services?

Turner: We make a little bit of money on services.

CRN: There's this perception that Microsoft has IGS envy and wants to build or buy a big services arm.

Turner: This is a company that, as we continue to grow and scale, services will make money. We're a for-profit organization. In terms of the relative scope of our offerings, it won't make a lot of money. And that's one of the things that Steve was very clear about -- the services charter, because I told him I thought we were missing a big opportunity, hearing from customers about connecting all of our products and portfolios and building out our integrated stack of products.

It had gone from a money losing operation to a break even organization, to making money. We've kind of gotten in and out and in and out [of services] over a number of years

I'm committed to making sure we make a profit responsibly but it is not going to become something in the portfolio of our offerings that says, this is a major dependence of the profitability of the company

CRN: Wal-Mart has huge power in dealing with suppliers and partners. It's pretty much able to dictate that if you want to supply Wal-Mart you must do EDI, for example. I'm curious how you see the Microsoft-partner relationships contrasting with that.

Turner: The word dictating is very strong. That would not one I'd endorse for my past role and certainly not in my future. Certainly things like EDI and business efficiency are good for business and they're good, in my opinion, on both sides of the equation. I think that efficiency is necessary for survival. Effectiveness is necessary for success. We have to work on efficiency and effectiveness and that translates to and through our partner group as well as in their enablement.

I'm a business ambassador of that in making sure that we eliminate the unnecessary, that we eliminate redundancy and that we do what we need to do to make things happen.

CRN: This year Microsoft introduced the enterprise CAL. How do you expect it to segment? How many customers will look at that vs. the core CAL? And secondly, Microsoft is thinking about a plain client license, not linked to any servers. Can you talk about that?

Turner: I think the enterprise CAL is one of our big exciting opportunities. I hope that all of them take a look at it and our aspiration is to convert as many as possible. Releasing a specific number on that is not something that I've been privileged to do. I would tell you it's a big focus initiative the field. When I took you through my goal sheet, my role is to make sure we leverage those opportunities that the field and partner channel has wanted and needed from this past year's R&D spend we're bringing out. There are some offerings in that enterprise CAL that we think will resonate in the enterprise space. And us being good enough to articulate our roadmap for both our partners and customers is a big thing on my sheet. We're getting into selling tactics that I've observed that we'll improve upon. Our ability to articulate our roadmap with partners and customers is a big thing on my sheet.

CRN: And a new client-only CAL?

Turner: That's something that's certainly been on the table. We're constantly looking at different scenarios for licensing. I'm a big proponent of us getting to fewer and less-different options from a licensing standpoint. I actually believe that'll improve customer and partner satisfaction because of the complexity we have in licensing. Lots of models on the table. That's not one we've released or come to an agreement on yet.