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Microsoft APC 2015: CVP Phil Sorgen: “Partnering is in our DNA”

Microsoft APC 2015: CVP Phil Sorgen: “Partnering is in our DNA”

Global channels boss believes he knows what's key to succeed in the Cloud

Phil Sorgen, Microsoft's corporate vice president, worldwide partner group

Phil Sorgen, Microsoft's corporate vice president, worldwide partner group

Microsoft's global channel boss let loose some tips and tricks for the channel to win in the Cloud, speaking as the keynote at Microsoft APC 2015.

Microsoft Corporate Vice President, Worldwide Partner Group, Phil Sorgen, says Australia is one of Microsoft's "top subsidiaries in the world", and its culture of innovation is a key component of why so many Australian Microsoft partners are leading the way globally with Cloud. Readify, for example, won the company's global partner of the year award at the World Partner conference.

The company has seen triple digit growth in Cloud across the last year, and now boasts 2200 new partners using Microsoft Cloud Services. Australia alone has contributed 1100 new Microsoft Partner Network members (MPNs).

"It says something about the solutions we're bringing, and the opportunity that that represents to every business," he said. "Partnering is in our DNA. We know the power of partnerships in bringing innovation to our customers, and that's what we're committed to as we move forward."

Sorgen said he is primarily a "data analytics guy" and as such threw out some interesting statistics.

Working with IDC research, Microsoft compared to groups of partners - those that had more than 50 per cent of their business in the Cloud, and those less.

"Those partners that did more than 50 per cent of their business in the Cloud were growing their customer acquisition 1.3 times, their revenue 1.4 times, and their profit growth by 1.5 times the rest of the partner ecosystem," he said.

The research also showed that those same businesses were seeing company valuations of between 5 and 14 times EBITDA than their rivals.

Sorgen then focused his attention on those companies hovering around the 14x bracket, and the attributes that made them stand out, namely IP differentiation, marketing, customer retention and acquisition and people and measurement.

The key focus these companies had in common was a focus on building long term customer bases based around recurring revenue, such as easily monetisable IP, utilising first party IP as MSPs, focusing on SaaS and lower risk via high utilisation and bill rates. He invited a series of Australian partners to the stage to demonstrate each facet of this new market philosophy.

Livetiles CEO, Karl Redenbach, described its recipe for success.

Livetiles comes from an Office365 and Sharepoint focus but provides tools and add-ons to make it more usable. Working with born-in-the-Cloud distie and Microsoft partner, Rhipe, the company has since picked up customers such as Nike and Pepsi overseas.

"Don't be scared to fail. We had several failures, but we learned from it, and you need it to be eventually successful," he said.

Read more: Microsoft APC 2014: 21 partners awarded

Redenbach said the company looked for a gap in the market, and pulled together IP that differentiated their offering. The company is already working on new software, called LiveTiles build, and has some project already on the way for Microsoft's augmented reality technology, Hololens.

Total Synergy CEO, Scott Osborne, described the changes his company had made to its go to market, focused around a change in marketing - namely a focus on customer engagement.

The company completely changed the way it approached the media especially, and has gone to having four marketing people and just one sales rep: "It was a real change to our marketing spend," he said.

The company is spending less on marketing overall, but redistributing how it is used. The company has already seen response times to calls drop and churn is now down to just 2 per cent a year.

Neil Wilson of Oakton was next up, and focused on the change from his company's systems integrator focus to a more service based organisation since its acquisition by Dimension Data late last year.

Merging the 1200 Oakton staff with the 2200 DiData staff was no mean task, and Wilson believes that the careful selection of people to projects has helped make the merger a success. But reworking the company's entire business model to cope with 'as-a-service' - especially sales incentives - has been a problem.

Even now, he said, the company still faces situations where it needs to partner - no company can provide a complete end to end solution without problems. Providing the right incentives across the board is key.

"We've now got annuity models baked into our incentives. Our IP model is now baked into our incentives. That's the behaviour we want in our sales force," Wilson said.

To conclude? "There was actually a very consistent formula across all those partners," Sorgen said.

"They were all providing different verticals or horizontal solutions, but at their core there was that same consistent formula."

And where does Microsoft fit in?

"We're focused on increasing the value of a partnership with Microsoft, lowering the cost of partnering with Microsoft, and making it easier to partner with Microsoft. If we can do that consistently, that makes greater profitability for you. I commit that to you as part of my team."

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Tags Phil SorgenLiveTilesScott OsborneNeil WilsonOaktonMicrosoft APCKarl RedenbachTotal Synergy

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