Microsoft CEO Steve Ballmer and Channel Chief Jon Roskill rallied 12,000 channel partners this morning at Microsoft Worldwide Partner Conference 2011 in Los Angeles. Ballmer briefly conceded that some people think Microsoft has too many products in too many different markets. But Ballmer countered critics by stating that Microsoft competes in only three core markets. Ballmer also tried to provide a reality check between the PC market, the tablet market and cloud computing. Here’s a recap.
CEO Steve Ballmer mentioned…
- Hybrid Strategy: Microsoft is unique in the breadth and level of integration between on-premise and in-the-cloud solutions.
- Three Core Markets: Without mentioning any critics by name, Ballmer seemed to be addressing criticism that Microsoft competes in too many markets that are vastly different. Ballmer tried to simplify the discussion by stating that Microsoft competes in three core markets: Platforms for small screens, big screens and middle-size screens.
- Scary Time: Last year’s partner conference — WPC 2010 — was scary because Microsoft at the time said the company was “all in on the cloud… 100 percent.” Fast forward to the present, and Ballmer asserts that cloud computing will be one of the most beneficial transitions ever for IT users.
- Continued Growth: When it comes to market growth, Ballmer mentioned Windows Server, Azure, Bing, Dynamics, Windows Server and Office as continued growth opportunities.
- Jabbing Google+: Microsoft and FaceBook are connecting the dots between Bing and FaceBook. It sounded like an indirect jab at Google+, though Ballmer didn’t mention Google’s social media platform by name.
- PCs Still Dominate Tablets: Apparently aiming to provide a reality check between tablets and PCs, Ballmer said 350 million new PCs with Windows 7 will be sold in 2011. In stark contrast, 20 million tablets will be sold.
- Bing: This is the area where partners focus least right now, Ballmer conceded. But Microsoft plans to open up Bing over time as more of a platform for partners, he added. Ballmer said Bing has captured 14 percent market share, up from 11 percent last year.
- Phones: In terms of market share Microsoft has “gone from very small to very small but it has been a heck of a year,” Ballmer quipped.
- Cloud Comes Into Focus: In past 12 months, Windows Azure, System Center, Visual Studio, Active Directory and other Microsoft services have gained key on-premise and cloud capabilities to give customers more flexibility to mix and match between public and private clouds, Ballmer asserted. Ballmer mentioned WireStone LLC as a partner that used Windows Azure, Windows Phone 7 and more to launch a business application for Boeing.
- Happy Anniversary: Over the past 10 years, Microsoft has averaged 20 percent compound annual growth since moving into the business applications market with solutions like Dynamics, Ballmer said. Ballmer said ERP and CRM integration with the Outlook user interface gives Microsoft a leg up against rivals. Microsoft ERP solutions will be available in the cloud in early 2012; CRM solutions are already available in the cloud.
- Office 2010: Microsoft has sold more than 100 million licenses, Ballmer noted.
- Office 365: One business trials Office 365 every 25 seconds, Ballmer said. “Any place we engage or a partner engages with Office 365, we win,” asserted Ballmer, who said Microsoft is doing “outstanding” any time the company engages.
- Skype: Subject to regulatory approval, Ballmer said he’s enthusiastic about acquiring Skype to help people communicate and collaborate. “One of the great motivations in acquiring skype is to enable enterprises to have all the control they want to collaborate and communicate, and yet connect to consumers, partners and customers around the world. Lync with Skype will allow the consumerization of IT to proceed” aggressively, Ballmer said.
- Xbox: The strategy is to deliver any entertainment you want or dream of, and have that one any screen — not just your big screen in the house, Ballmer said. Also, Microsoft is preparing voice-enabled remote control for Xbox, which will arrive in late 2011. The voice-enabled software will be integrated with Bing, so that users can search NetFlix and other multimedia services.
- Windows Phone 7: Ballmer shared a message of “belief” with partners, stating that Windows Phone 7 has sold millions of devices but he avoided any mention of specific shipment numbers. He noted that nine out of 10 people who acquired Windows Phones would recommend them to a friend. He said there are 20,000 applications built for Windows Phone 7. And he mentioned that Nokia bet the company on Windows Phone 7, though he didn’t mention financial incentives that Microsoft apparently supplied to Nokia.
- Windows 7: Twenty-seven percent of the Internet runs Windows 7.
- Windows Intune: The public beta for the next Windows Intune beta is available now with more remote support features, though it sounds like Windows Intune remains Windows-centric; there was no mention of remote support for non-Windows devices.
During opening statements Roskill mentioned…
- Money Matters: For every $1 worth of Microsoft software that a partner resells, the partner generates about $8.70 in additional revenues.
- Who’s Here?: Roughly 12,000 partners from 120 countries are attending the conference. The audience includes distributors, OEMs, resellers and ISVs.
- Continued Partner Commitment: 95 percent of Microsoft’s revenues come from channel partners, Roskill said. He mentioned Parallels as a key company that helps channel partners to stand up and activate cloud and SaaS applications.
- Key takeaway: No big surprises from Roskill. He basically reinforced some key channel messages that Microsoft has promoted since early 2011.
The VAR Guy has a range of meetings with Microsoft executives over the next few days. Stay tuned for regular updates and analysis.
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Posted In: Channel Chiefs | Cloud Computing | Mobile Technology | Partner Programs | Software
Tags: Office 365 | Steve Ballmer | Windows Azure | Windows Phone 7 | WPC11 | WPC2011
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Too much fixation on tablets (which are being outsold by e-book readers), too much fixation on Apple (which is being outsold by Android), too much fixation on the desktop (which has already been surpassed in unit sales by smartphones). Still fighting yesterday’s battles, not noticing that the market is already shifting out from under them.
Just read the latest Comscore stats for US smartphones. Playing with the numbers, Winmo/WP7 combined is in a accelerating downward trend. The Jan-Apr figs are negative with 100.000 units/mnt and the Feb-May figs are down abt 300.000 units/mnt. From Jan until May there are abt 800.000+ Winmo/WP7 units LESS in the US market.
Provided my extracts are correct (and I believe they are), and stats are representative, Microsoft are unable to get Winmo users to replace their unit with a WP7 unit. The Winmo users are buying iPhones or Androids.
One might say that Nokia (and Mango) will change that, but the Nokia stock keeps heading downwards and the stock is now abt 50% of the pre Microsoft deal value. Latest Nokia results did in fact beat the market expectations but still the stock keeps moving downwards.
Gardner predicts 30 mill WP7 units for 2011 but I really fail to see how any stats or development in the market support such figures. The market is growing – true – but Microsoft keeps loosing actual units and not just market share.
Can Microsoft rebuild customer confidence lost when overselling Winmo 6.5? It will be a tough one.
Meanwhile, Apple sells in excess of 1 mill units/mnt in the US. Android sells abt 2.2 mill units/mnt and Rubin stated that 500.000 Androids are actvated every day. That translates to abt 125-130 mill units worldwide by end of July.
He was not comparing desktops to tablets. He was comparing windows sales to Mac sales.
Lawrence@1: The VAR Guy thanks you for the continued dialog. Ballmer’s keynote seemed a bit hit-and-miss. But despite the fixation on Apple, tablets, etc., Microsoft proved that it still knows how to build new, $1B businesses such as Lync. The problem: $1 billion is massive to other software companies — but not massive to Microsoft.
Jack@2: Even Ballmer concedes that Windows Phone 7 hasn’t moved the needle for Microsoft in the smart phone market. And The VAR Guy doesn’t particularly believe forecasts suggesting Phone 7 will somehow become the #2 smartphone OS…
Mark@3: Ah, looks like you caught The VAR Guy in an error. Thanks for the reality check. -TVG
@The VAR Guy:
Me neither. Just cannot figure out how such predictions possibly can be justified.
Came across a blogpost comment made by a VP in Microsoft’s mobile division dated 26 June. He confirms that the digits for WP7 are less than 5 mill units actually in hands of users.
US figures (Nielsen) states less than 1% which translates to approx 780.000. The promo campaign running until February was reported to cost USD 450 mill and if I’m not wrong virtually all of it was spent in USA.
If so, Microsoft have spent USD 600 per unit activated in USA. Then again one could easily recon that 50-80.000 of those units are used by Microsoft employees, partners and developers which makes the figs really grim.
Writing off Microsoft would be a part of the silly season, thus there’s absolutely no reason to disregard Microsoft. But the figures are also disturbing for HP with WebOS as the low figures indicates that there are really 2 de facto standards for smartphones – Android and iOS.
RIM could turn Blackberry around with more executive power to the guys from TAT (The Astonishing Tribe) who makes wonders with UX.
Jack@%: Thanks for coming back into the conversation. The VAR Guy was intrigued to see a bunch of HP WebOS smartphone commercials on TV last night. Looks like HP wants the tween crowd… The VAR Guy will be watching to see if that strategy works.
As for Blackberry, The VAR Guy isn’t sure what it would take to turn around that company’s aagging fortunes.
-TVG
Thank you for monitoring and participating in discussions following articles. Most writers leave their readers behind.
I’m a believer wrt the technical/conceptual promise of WebOS and the potential ecosystem (including WebOS management of Linux home/smb servers).
Unfortunately WebOS is a challenge for the potential customer. Right now they seem to follow the Palm tradition. Being slow entering into new markets and making devices available for people ready to spend.
It’s a familiar pattern. It’s like trying to survive by performing harakiri. Not a smart thing to do.
My second concern is that by the looks of it, they are saving costs by lowering the finish and sense of quality. They won’t attract the ideal customers and keep the retail price up by doing that. They won’t get tupperware volumes at premium price by delivering tupperware feel.
Build quality and excellent finish is major selling points.
They need to bring tons of units to the markets – and they need to get ready to push next gen units fairly soon. They already missed a few windows and the buzz just isn’t present in Europe anymore. The maccies I know (with Pre experience) clearly prefer WebOS rather than Android, but HP are loosing mindshare in Europe.
HP got muscles – but at the moment they are just flexing in front of the mirror
Jack,
The VAR Guy has been skeptical of the HP-WebOS strategy… mainly because of the strong, intrenched competition. But our resident blogger will see if HP manages to flex its muscle in the market, and not just in the mirror.
Thanks again for all the perspectives you shared. The VAR Guy will keep them in mind as future news coverage emerges…
-TVG