Microsoft exec talks channel investment

News Nov 16, 2012

Microsoft exec talks channel investment; says ‘there’s no rush’ to cloud

One of Microsoft’s (NASDAQ:MSFT) top executives has revealed the firm’s preparations for its busy schedule of product launches in 2012, and a future that embraces the cloud.

Speaking to Channel Pro, Microsoft’s worldwide VP of Small and Midmarket Solutions and Partner Group, Vahé Torossian (pictured), said the firm is providing “unprecedented investment” in partner training and certification, with much of the activity around the new launches.

He said that as well as a global advertising campaign worth $120m, the vendor has spent $30m in local channel support including boot camps, training, sales days, plus top line marketing.

“From reselling to developing, there is a new set of opportunities for the channel,” he said.

New products

Torossian believes the release of Windows 8 will benefit from the current momentum around the consumerisation of IT, and itself spur sales of smartphones and tablets. “This year there will be 370m PCs sold in the market worldwide, so it’s a huge opportunity for refreshing the installed base as well as selling new devices,” he said.

He also said there was a “huge opportunity” for VARs to sell software like System Center 2012, which manages the customer’s server infrastructure and client devices. “Many companies have been virtualising and the cost of managing virtual machines is getting higher, so Systems Centre 2012 and Windows Server 2012 are really helping our partners to build new deployment capabilities and services that didn’t exist in the past.”

Elsewhere, Torossian heralded the success of Office 365 among SMEs, of which 80 percent of are new customers. “This is a fantastic set of tools for productivity and collaboration to address SME customers,” he said. “We have seen an increase in demand from these types of customers [looking] for a more flexible environment.

He said Microsoft’s decision to allow its partners to begin billing directly for Office 365 services for the first time was “a breakthrough”, adding “there are still partners deliberating [as to whether to sell Office 365] – this is certainly going to be an accelerator.”

Cloud

In the UK the number of Microsoft partners transacting in the cloud – with Azure, CRM Online and Office 365 – has increased by 300 percent to 800 new partners every month.

“The SME space represents the fastest growing part of our business…and cloud is an opportunity to reach a whole new base of customers,” added Barry Ridgway, UK general manager of SME and Partners Group.

“It’s a new channel; three years ago they didn’t exist,” said Ridgway, who added that Microsoft’s combined hosting and open subscription model currently represents 56 percent of its SMB business.

Clearly, cloud has been a massive play for Microsoft, with the vendor investing millions of dollars in it over the past couple of years. However, Torossian denies the firm is forcing its partners’ hands when it came to making the leap to cloud services.

“The cloud is not for everyone and not for everything,” he said. “At some point if [a partner] wants to move to the cloud, we want to give them the ability to respond. There’s no rush, it’s up to you to decide, but also listen to your customers.”

He added: “Last year we did a lot of business transformation workshops in the UK. We said to resellers, “there’s no hurry, but the most important thing is for you to understand is the implications…We don’t want someone to want to go to the cloud and not have a solution.”

Torossian also admits that Microsoft didn’t do a good job of communicating with partners over its decision earlier this year to drop Small Business Server. Many SMB resellers were critical of the decision, as they felt Microsoft was forcing them to move their customers into the cloud when they weren’t yet ready to make the transition.

“[The partners] were emotionally connected to Small Business Server and it was working very well; it was a perfect package,” he said. “We didn’t communicate well the fact that Windows Server Essentials is giving even more capabilities – it gives what SBS was giving them plus the opportunity if you want to move to the cloud. ‘Mea culpa’ on the communication!”

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