Microsoft Boosts Spending On Incentives For Channel Cloud, Solution Sales

Microsoft will spend an additional $200 million on cloud and solution incentives for its channel partners this fiscal year, boosting the company's overall partner incentives spending to more than $4.2 billion.

In keynote speeches at the company's Worldwide Partner Conference in Toronto Wednesday, COO Kevin Turner and channel chief Jon Roskill exhorted the 16,000 partners to aggressively compete using Microsoft's Office 365, Windows 8, Windows Server 2012 and other products.

"We're not in this to be second place," Roskill said, speaking in the cavernous Air Canada Center. "Don't hold back in FY 13. It's time to get out there and compete with passion. It's time to go big and go bold. We have everything we need to win. So don't hold back."

[Related: Exclusive: Steve Ballmer Speaks With CRN At Microsoft WPC ]

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Microsoft is growing its cloud and solution incentive spending, which Roskill described as "some of the richest programs we've ever had," by 40 percent.

Microsoft touted an International Data Corp. white paper that said the benefits of the Microsoft Partner Network program spending provides $320,000 in value annually to a Microsoft partner with about 50 employees, $5 million to $10 million in annual sales, and between two and five Microsoft competencies.

Microsoft also unveiled changes to the MPN competency program under which partners become certified to achieve gold or silver status. A new application development competency combines the previous ISV, software development and Web development competencies.

Likewise a new collaboration and content competency, focused on partners that work with SharePoint, merges the previous portals and collaboration, content management, and search competencies. Microsoft is also revamping the desktop competency to focus on devices and deployment, and the digital marketing competency will now include Bing advertising and related tools.

The Wednesday keynotes, the last major speeches at WPC, are traditionally used by Microsoft executives to fire up channel partners who account for 95 percent of Microsoft's revenue.

Turner didn't disappoint. Noting that there are 1.5 billion people on Earth who use Microsoft products, he said: "But there's another 5 and a half billion people we need to go get with our partners."

The COO said revenue from Microsoft's cloud products grew more than 100 percent in fiscal 2012, which ended June 30. Windows 7 now accounts for more than 50 percent of all desktop Windows installations, he said, "and the opportunity is to go and get the rest with our partners."

NEXT: Turner Takes Aim At The Competition: VMware

Microsoft's Turner often uses his WPC keynotes to give partners advice on how to go after Microsoft competitors. This year rival VMware was most in his sights, and he drew cheers when he said that for the first time Microsoft's Hyper-V virtualization is gaining market share against VMware.

And, he urged the Microsoft partners who also work with VMware to switch to Microsoft's virtualization products. "You're late, but we still love ya," he said.

Sounding the same theme voiced by CEO Steve Ballmer and other executives all week, Turner said Microsoft is entering a "new era" this year that includes refreshes of many of its mainstream products, including Windows 8 and Windows Server 2012, and rapid growth in next-generation products such as the cloud-based Office 365 and the recently introduced Surface tablet.

"It's the single largest release cycle in our history," he said of the company's rapidly changing product lineup.

Other competitors he exhorted partners to compete hard against included IBM -- Microsoft will replace 5 million Lotus seats this year, he said -- Google and Apple. On the latter, Turner, referring to comments from the late Steve Jobs and other Apple executives predicting the coming end of the PC era, said: "Apple has it wrong."