Microsoft Channel Exec Toby Richards On New Partner Investments, The Microsoft Customer Agreement And The Windows 7 End-Of-Life Opportunity

Richards also spoke with CRN about Microsoft’s Partner Advisory Councils, changes to Digital Partner of Record and the new Azure Lighthouse tool for simplifying Azure management.

Last week, Microsoft launched into its new fiscal year with the Inspire 2019 partner conference, which saw the announcement of an array of new solutions and investments aimed at better enabling the company's massive partner community.

CRN dug into some of the key announcements and updates that Microsoft partners need to know about with Toby Richards, general manager of Microsoft’s partner co-selling and go-to-market programs for its One Commercial Partner organization.

[Related: Microsoft Inspire 2019: The 6 Biggest Statements From Gavriella Schuster And Judson Althoff]

Topics covered in the conversation, held earlier this month at Microsoft's headquarters campus in Redmond, Wash., included new investments for channel partners, the Microsoft Customer Agreement, changes to Digital Partner of Record, Partner Advisory Councils and the Windows 7 end-of-life opportunity.

What follows is an edited transcript of the interview with Richards.

What are some new investments for partners that you'd like to speak about?

I would argue that we are invested more in partners today than we were a year ago, and more than years before that. Especially with the engineering capability that will make partners more successful. Take the Azure Lighthouse capability, which puts Azure management features of all your customers into one pane, one view. What partners would say is, that's going to reduce our customer onboarding time by 71 percent. Which is tremendous ...

We're going to be doing more on skilling--more Azure skilling, more Dynamics 365 skilling, marketplace, more Cloud Solution Provider, go-to-market services, marketing services. We just started [marketing services] last year. We supported about 2,000 of our gold partners last year with marketing services and the kind of varying levels of marketing services--self-service, personalized, custom demand generation campaigns. Those are the things we're investing in with the partners that want to differentiate, grow, drive value.

How is Microsoft prompting partners to become more than just a traditional reseller?

Our belief in the era of the cloud is that partner success is going to be around solutions and applications and long-term customer success. We've spent so much time over the last few years on rebuilding our commerce platform, that the act of transacting software is less and less interesting to customers and to us. And so really where our incentives, our investments and programs are going to is how partners can differentiate themselves. For example, we've had the Azure Cloud Platform competency. But we've built so many things into Azure that partners are now saying, "OK I'm great at SAP in Azure, or I'm great at Linux on Azure, or I'm great at cloud migration." Now we've created these advanced specializations for those partners to be differentiated in the market, to say these are our top partners. That's about solutions, and not, "You can get a better price from me." All customers want value. The value today isn't derived by the transaction of the core platform, it's derived by what's driving digital transformation--am I able to connect with my customers better, am I able to empower my employees, am I able to make my operations more efficient? Partners who are driving that are the ones who are going to be able to capitalize on the trillions that you see in digital transformation opportunity.

Do you consider the Microsoft Customer Agreement and CSP to be two alternatives?

That's a great way to describe it. I would actually say there's three alternatives. We believe in customer choice, but we also believe that partners can play a role no matter what the customer chooses. And so there's basically three models. You have your typical Microsoft seller selling a large enterprise agreement to an enterprise. You as a customer could purchase an integrated solution from a partner that includes our stuff and CSP and some managed services. Or as a customer you could purchase direct. But the partner will be able to capitalize on all three motions. For CSP, partners are obviously demonstrating a level of managed service within the customer's environment. But through an enterprise agreement or through direct, they'll be incented by driving more Azure usage. So the principle is customer choice first. Partners play a role in all three selling motions.

If the Customer Agreement is a direct arrangement, is there a conflict between that and CSP?

If you are only a reseller, there would be conflict. But if you're a services provider driving managed services, there shouldn't be a conflict at all. [Partners] should be thinking about migration offers, managed services offers, customer success offers—beyond the transaction. That's really the key thing. Because with digital transformation, we want to partner with these companies—partner with our partners—to deliver on long-term customer success. And grow that customer's business, that partner's business, and our business over a long period of time--well beyond the actual nuts and bolts of the sale. And so by making our program partner-friendly—from the standpoint of, partners can play a role no matter how the customer buys, and can be compensated for that—we see that as a super positive. Now obviously if you're selling CSP, that's great, because it's all on one piece of paper. So we'll continue to push that with our customers.

Can you speak about the changes coming to Digital Partner of Record?

The concept of Digital Partner of Record is improving in its overall telemetry. So in the area of Azure—where a lot of this partner service principle is being embedded—is being changed to a capability called Partner Admin Link. And it actually provides quite a bit more fidelity of what a partner's actually doing in a customer tenant, down to very specific workload levels. As opposed to Digital Partner of Record, which generally just said who sold it. Partner Admin Link will happen in October. It will be the way in which a customer provides partner attribution to the actual work they're doing, and they can do that at various workload levels. So if there are multiple partners involved in a particular customer tenant, that allows the partners to get the association to the actual work being done. It goes from a very wide aperture, to a very narrow aperture—which is not only beneficial to all the partners involved, it's also beneficial to the customer from a security and privacy perspective. Because it now provides a lot more specific admin use rights. Especially in the time of really important security practices and things like that, it actually will improve our partners' security practices, which will be great. So the Digital Partner of Record concept will begin to change as we build out more of these capabilities.

How will partners need to adjust to this change?

They want it. It'll be celebrated. Because if you are a partner who doesn’t sell, but you drive all of the customer's consumption because you're there and you're doing managed services and that sort of thing—if you weren't that Digital Partner of Record, you would never have gotten recognized as doing all of the great work you're doing. So it's a positive change all around.

How active are Microsoft's Partner Advisory Councils?

We have about 14 Partner Advisory Councils. We have several for each of the major product areas. So Azure has four, I believe. Microsoft 365 has two or three. Dynamics has two or three. And they might be a little bit more product-related. Then we have an additional set—we have a partner experience advisory council, we have an ISV advisory council. We have what's called the indirect provider advisory council. These indirect providers support a lot of the smaller resellers around the globe. Anyway it totals around 14. We meet with them physically two times a year, and many of those councils engage on phone calls monthly. The product folks combine both technical and business model scenarios. And then for partner experience and ISV, it's a little bit more around partner experience, business models, benefits, things like that.

So you are getting the SMB partner take from these advisory councils?

Totally. On our partner experience council, we have probably about 20 people on that. We have some small partners and we have some very large partners. And that makes the conversation diverse, but also hard sometimes. We do a periodic offboarding/onboarding. We get the [partner] feedback actively. There's very little that we have announced in the last year that has not gone through the advisory council.

Is Windows 7 an opportunity for your partners, or is it more for the hardware partners?

Obviously it is for the hardware partners. But we're coming out with a security competency at Inspire, and managed desktops are a huge opportunity. And so we're excited about the security competency, because it's very much around the Intune scenario—things like that. If we're just talking about pure operating system migration, yes, that's primarily the hardware partners. But as it relates more to the broader managed desktop scenario, and customer success, user adoption, things like that—we see that as a great opportunity. But a little bit more in the area of managing desktops and collaboration. When they're on Windows 10, and Intune, there are these new capabilities. And I think as it relates to user privacy, user security, GDPR, all those kind of things, that's where we see the opportunity with the services partners.

Server migration is also a huge opportunity. Those are end of life as well.

But those server migrations don't have to go onto Azure necessarily?

The assumption is it goes onto the Azure platform. Partners could do [newer versions of Windows Server and SQL Server]. And there will be scenarios, especially in regulated industries, that we would expect to see that. But where we're putting our go-to-market, our partner incentives, is all cloud-based migration.

What should partners know about Azure Lighthouse?

Lighthouse is a new capability for Azure. When you're in Azure, managing many customers, you're basically managing company A, [then] company B, and so on. And as you can imagine, what is that scenario like when you're like some of our Azure Expert MSPs—New Signature, 10th Magnitude, DXC—and you've got dozens or hundreds of companies? So this brings all of your customer clients all into one integrated experience. It's not only great from a customer on-boarding perspective, but it also allows you to build into new managed services that really take advantage of that feature, to be able to apply that across all your customers. So we're really excited about that ...

Long term in the cloud, basic management isn't even really something you want to differentiate yourself in. You want to differentiate yourself in new areas. So this really helps those partners to drive a lot of success.

Is Lighthouse just for the Azure Expert MSPs?

No—you could be a gold cloud competency partner and use that. Those companies were really involved in the process, because they tend to have the most customers on Azure.

What other new investments are you making for partners that we haven’t talked about?

We are putting a ton of security features into Partner Center. We're building out our referral and our co-sell system. Co-selling with our top partners generated $9.5 billion in partner revenue. One of the big pieces of feedback in our Partner Advisory Councils was how clunky our experience was. We had a lot of old tools and things like that. We just created a new capability that we're rolling out in the next six months, which is an API-based lead sharing tool. So if they're in Dynamics or in Salesforce or whatever their tool is, bi-directional sharing [means] they don't have to go out and re-enter these things. So it's not just about the growth stuff, but it is about how we help make the business of partnering with Microsoft more efficient.