4 Things You'll Hear At Microsoft's Partner Conference

Microsoft is gearing up for its annual Worldwide Partner Conference, to be held from July 11-15 in Washington, D.C. WPC is Microsoft's channel Super Bowl, but this one will carry arguably greater importance than previous WPCs because it'll give Microsoft executives a chance to articulate what the company's new "all-in" stance on cloud computing means for channel partners.

Given that cloud computing and the channel are viewed in some IT industry circles as diametrically opposed forces, Microsoft partners will be hanging on every word. They'll also learn more about Microsoft's overhauled partner competency structure and how it could convey competitive advantages to partners who've long been searching for the Holy Grail of differentiation.

The nation's capital also happens to be birthplace of departing Microsoft Channel Chief Allison Watson, who's moving to a new position as corporate vice president of the U.S. Business & Marketing Organization. Watson, leader of the Microsoft channel program since 2002, recently took time out from WPC preparations to chat with CRN about what partners can expect to hear at the event.

1. Microsoft Is All-In With Cloud Computing

"All-in" has replaced "Software Plus Services" as Microsoft's marketing mantra. The change reflects Microsoft's desire to establish itself as a cloud pioneer and perhaps a bit of overzealousness that stems from its late arrival to the cloud market.

At WPC, partners can expect to hear Microsoft cite examples of channel partners moving their IT operations and software development to the cloud, although Watson acknowledges that some VARs are still trying to figure out how the cloud fits with their businesses.

"There's a tremendous amount of partner interest in the cloud," Watson said. "But in a room of traditional small and midmarket VARs, I'd say 30 percent will get it, and 70 percent aren’t sure yet about the opportunities. That's why it's important for partners to connect with other partners, to see in every solution there is a cloud story."

Microsoft says it's not abandoning Software Plus Services entirely, but on-premise software probably isn't going to get much attention at WPC. Instead, Microsoft will show its newfound dedication to the cloud with glimpses into its R&D roadmap. For example, inside Microsoft, 70 percent of developers are actively developing cloud technologies, a figure that will grow to 90 percent by the end of fiscal 2011 next June, according to Watson.

Windows Azure, which launched as a paid service in February, now has more than 10,000 customers, as well as 4,900 apps that developers have ported over or built entirely on the Azure platform, Watson said.

"Azure is ideal for spatial data infrastructure solutions that require huge amount of data processing, because it’s able to take advantage of scale-out and scale-up infrastructure for managing large volumes of data," she said.

For customers that don't have huge data consumption needs, the costs of hosting on Azure are 30 percent less than traditional hosting solutions, because customers are only charged for what they consume, Watson added.

Next: The Cloud And SMB Partners 2. Cloud Opportunities Extend To SMB Partners

Enterprises were among the first cloud customers, and midmarket firms are also busily sniffing out cloud opportunities. But Microsoft is endeavoring to show that the cloud offers advantages to companies of all sizes, and that partners serving the SMB space can benefit from the software giant's cloud push.

The combination of Windows 7 on the desktop with cloud-based Windows Intune desktop management is an example of the "very interesting cloud-based opportunity partners can take to SMB customers," Watson said.

CRM Online is another important offering for SMBs: In the past when CRM Online was only on-premise, some partners shied away from it, but its cloud-based counterpart offers a more "rounded opportunity" for SMBs and the channel partners that serve them, Watson said.

With Microsoft, "SMB partners can offer a platform that’s cloud based, operates with on-premise software, and has continual innovation. It's a pretty unique opportunity for SMB partners, and we haven't brought it out to them that way yet," Watson said.

3. Microsoft BPOS Is Channel Friendly

Since launching BPOS in 2008, Microsoft been faced with a small but vocal segment of channel partners who see it as a harbinger of channel disintermediation. Microsoft's BPOS price cuts, and its borderline obsession with Google Apps have caused partners to wonder if the already slim margins for BPOS might evaporate in the two companies' heated battle for cloud productivity dominance.

But Microsoft has maintained that BPOS allows partners to maintain revenue from services, and Watson reiterated this to CRN. "There's no such thing as Microsoft taking accounts direct. We have an Influencer Fee for all our BPOS deals," she said.

Watson acknowledged that there has been some confusion in the channel about the Influencer Fee and said Microsoft will continue to reassure them that they'll still be compensated this way when selling BPOS. But services opportunities will still be a part of the BPOS post-sale, she added.

"Customers can choose to buy BPOS online from Microsoft without using a partner. In the SMB, some do, but we see a much higher percentage of deals going through partners," Watson said. "Customers need value added services around these solutions."

4. MPN: We've Raised The Bar

Microsoft last month retired all of its old program competencies and launched new ones. With the new Microsoft Partner Network competency structure in place, Microsoft will seek to explain how raising the "bar" in terms of partner knowledge and technological expertise will help the program to continue functioning healthily.

Microsoft in May scrapped its planned Small Business Solution Provider competency and Small Business Solution Provider Advanced competency, deciding instead to keep the existing Small Business Specialist Community (SBSC) designation.

"For small partners serving small customers, we are well positioned -- the bar is set at the right place," said Watson.

For small partners that serve medium and large customers, the new MPN structure will help level the competitive playing field. For example, in the past Gold certification wasn't specific to a competency, so for a small partner with deep expertise in business intelligence (BI), their Gold would look like any other partner's Gold.

Under the new model, that small BI partner will carry the same level of competitive branding, which will allow small, specialized partners to compete at a much higher level, Watson said. In addition, the new Medium Business Solution Provider competency allows partners to have certifications across the stack, which is something they've been asking for.

"These partners have said, 'Wow, you're raising the bar.' And we are raising the bar -- look at where we are compared to competitors. It is a change for partners and its one we believe they asked for," Watson said.