Q&A: Microsoft's Roskill Says Surface Channel Rollout Is Actually Going Well

Microsoft channel chief Jon Roskill is on the hot seat this week at Microsoft's Worldwide Partner Conference, and it has nothing to do with the fact that the event is being held in Houston in July.

Many Microsoft partners want to sell Surface tablets. So far, Microsoft isn't letting them do so. That's puzzling to partners who've been dutifully waving the Microsoft flag for years, and who've customarily been rewarded with a chance to kick the tires on Microsoft's latest and greatest before the general public.

That isn't the case this time. So, with Microsoft now selling Surface through a cadre of 10 high volume resellers, partners are growing impatient with what they're hearing – and not hearing -- from Microsoft's top brass.

[Related: Microsoft's Ballmer Avoids Surface Channel Strategy In Partner Conference Keynote ]

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On Tuesday, CRN sat down with Roskill to delve into this issue, and Surface-hungry partners might feel some optimism at what he had to say. Roskill also dug into other current matters of interest for the channel, like cloud computing, Office 365 and Windows 8.1, to name a few.

Following is a lightly edited transcript from the interview.

Partners want to sell Surface, and they're frustrated by Microsoft's refusal to let them do so…

Yes, there was a [CRN] story yesterday that implied Steve [Ballmer] avoided talking about it.

It's not so much that [Ballmer] was avoiding it. He just didn't see it as that relevant to the discussion, because we're so early in Surface commercial distribution.

If Microsoft is transforming into a devices and services company, is Surface part of the devices piece of that equation?

Oh, without a doubt. Steve's been talking about devices and services internally for more than a year now, and I think there have been people inside Microsoft saying, "What does that really mean for us?"

I've been talking with the Windows team and saying look, [Surface] is here. And they've been saying look, we've got so much on our plate already. How much more they can take on, and how fast, is really what the issue has been on all of this.

We made the decision in late February to put Surface into commercial distribution, and four months later, we did. I actually think that's pretty good for a company that is not a hardware company.

Who at Microsoft is making the call on Surface distribution?

I would say it's a collective decision. Tami Reller [Windows CFO and CMO] is responsible for Surface sales and marketing. There is also myself. [COO] Kevin Turner is very clearly aware, though he's not day-to-day on this. Vahé Torossian [corporate vice president, Worldwide Small and Midmarket Solutions and Partners Group] has been in on these meetings. And Chris Capossela [Microsoft CMO] in the consumer channels group. Those are the main players.

NEXT: Microsoft Talks Channel Roll Out Plans

So how is the channel roll out going to work?

We announced the commercial program July 1, and Monday we announced we're bringing it to 27 more countries by September. We're going in on a phased approach. We are working with set of distributors that give us the coverage we're looking for.

And as we go into a market, we're picking a handful [of LAR partners]; it's going to be three to 10, depending on size of the market, and the number that we need to work with to get coverage.

There are clearly other partners out there that want to resell the Surface, and I acknowledge that. At the same time, we don't want to get into position early on where we get over-distributed.

We're watching very carefully what happens in the U.S. over the next three months. We're watching what happens in these other countries, and we will make adjustments.

Switching gears, what does Microsoft think about its partners working with Apple on big iPad and iPhone deployment projects?

Well, anything that's driving business for our partners around our infrastructure is generally a good thing. There's money to be made there.

That said, we think a Windows 8 device is a much better device for an employee in a business. The iPad doesn't support encryption, or peripherals, or USB, or BitLocker. So you can have people walking out of the company with data, which can be lost in a taxi and then fairly easily be pulled off the device.

Microsoft's cloud business has come a long way since BPOS [Business Productivity Online Suite] launched at WPC in 2008. What lessons has Microsoft learned along the way?

In April, we said Office 365 is now at a $1 billion run rate. Windows Azure and associated services around it are also over $1 billion. Then there's CRM Online, and Windows Intune.

Looking around, who's the leader in cloud software? There's Salesforce, a pure cloud company; they're at about a $2 billion run rate.

You look at Google, their Google Apps business is in the $100 million range -- that's what they're making in terms of paid customers.

You could look at Amazon Web Services, and our data shows they're in the $1 billion range.

I really feel we're at the point where we're the leader in the cloud. This is something I'm pushing the company to state more loudly.

How much of the Microsoft channel is involved in driving this cloud business?

We now have 150,000 partners in cloud channel programs, which is 25 percent of our 600,000 partners around the world.

About three months ago, we looked at the data from partners in our cloud programs. About 75 percent of them are traditional Microsoft partners who've made the transition to cloud. About 25 percent are startups that were born in the cloud.