Five burning partner questions Microsoft should answer at WPC in Houston

On Sunday I’m off to Houston, where I’ll brave the heat and humidity to cover my first Microsoft Worldwide Partner Conference (WPC), which runs July 7th through 11th. When CEO Steve Ballmer and channel chief Jon Roskill take the stage at the Toyota Center, and throughout the week, these are some of the questions I’ll be looking for answers to.

PARTNER COMPENSATION: The bottom line for partners with any vendor is always “how can we make money together?” In recent years, Microsoft has been moving to a new pay for performance model that changes the way partners are compensated for doing business with the vendor. In fiscal 2012, some $5.8 billion was invested in Microsoft Partner Network (MPN), including new tools, training and margin incentives. Is it working? Are more changes coming? Are partners satisfied?

TO THE CLOUD: Microsoft was later than some other vendors to embrace the cloud, but it has jumped in with both feet now. Office 365, Azure and Skydrive are among the testaments to that. But is Microsoft a software company? Is it a services company? Is it both? Right now, Microsoft has its toes it both ponds. For example, you can subscribe to Office 365, or buy a perpetual license for Office 2013. Will this continue to be the case, or will Microsoft transition entirely to the cloud? Will it need to revisit software licensing cost models in an as-a-service world? And what about partner compensation? Just paying a small cut of subscription revenue isn’t going to incentivize a partner to prospect. Other vendors are experimenting with bonuses or larger cuts for partners for the first year or two. Will Microsoft get creative with cloud compensation?

SURFACE AND THE CHANNEL: On the eve of WPC, Microsoft said it would finally sell its Surface tablet through the channel, but only through 10 hand-picked large account resellers in North America. This follows up on Surface being opened to limited retail distribution in February, after launching as a Microsoft direct-only product last fall. So the closed distribution model has opened ever so slightly, but most of the partners at WPC will still be excluded. And many of them will probably be asking why. There is certainly a desire for tablets from many of their clients in a BYOD scenario. And if they can’t sell them Surface, VARs will sell them a competitive offering. Microsoft says they intend to add more partners to the program soon. How much longer will partners have to wait for Surface? And when it does finally come, will they still be interested?

MANAGEMENT AND DIRECTION: After how do we make money, partners also look for stability, both in leadership and strategic direction. Microsoft partners have seen much change on both fronts, and more is rumoured to be coming. In Canada, Microsoft has seen a great deal of turnover under subsidiary president Max Long, who himself took over from Eric Gales just before last year’s WPC in Toronto. Things seem to have settled down, although Mark Dodds still hasn’t been replaced as vice-president of small-to-mid-market solutions and partners, and the de facto No. 2. And down in Redmond, rumours swirl that CEO Steve Ballmer is set to shuffle the executive decks, possibly as soon as WPC. On the direction front, Dodds had been tapped by Redmond to pilot the merger of the partner group and the SMB group. Where does that project stand? I’ll also be watching to see what strategic direction Microsoft will be articulating, as it goes into ever more areas. It’s not just a software company anymore. It’s a services company, with Azure et al. It’s a hardware company, with Xbox and Surface. How does it all come together?

CAN HOUSTON TOP TORONTO: Last year’s WPC was in the Great White North and, thanks to a big effort by Microsoft Canada, WPC Toronto set a new attendance record with over 17,000 attendees. Canadian attendance also hit a new record, and with increased international attendance WPC was more worldwide than ever. Will Houston be able to top Toronto? While Lenny Kravitz playing the closing party should help, it will still have its work cut out for it.