Microsoft channel chief outlines compensation structure

Los Angeles – After a full year as the Microsoft Worldwide Channel Chief Jon Roskill wanted to know how he performed. It wqas during a briefing with the Canadian channel media where he asked with a smile “How am I doing?”

Since CDN doesn’t sign his cheques it was unclear what he was looking for from the media.

Executives at Microsoft have told CDN that Roskill is one of the best operations people in the company and his appointment, which was literally days before the last Worldwide Partner Conference in Washington, D.C.. That appointment notice came as a surprise on many levels. But after a week at the conference where the software giant was more interested in talking to partners about execution rather than big picture announcements it looks like Roskill is the right man for this job at this time.

Roskill replaced the almost legendary figure of Allison Watson, who ran Microsoft’s

(Nasdaq: MSFT)channel for eight years. One of the smartest things Roskill ever said to me was that he ‘wasn’t Allison Watson’ nor would he try to be.

A year after Microsoft made its two biggest announcements with its “All-in cloud” strategy and Windows Phone 7 this time if for execution of those strategies and others.

Roskill talked about that along with new channel compensation plans, incentives and gaps in the Canadian market.

The following is an edited transcript.

CDN Now: Microsoft licensing is extremely complex. Has going all in on the cloud changed that in any way?

Jon Roskill: Microsoft licensing has always been difficult because of its complexity and its structure and we pushed hard to get it to be more consistent across product teams. We now have partner of record fees with our 12 per cent upfront and six per cent re-occuring compensation plan. In the three years we have been talking about the cloud it has help us unravel the complexity we have built within our licensing. The cloud was a way to get a fresh start. This is going to help the channel. This fiscal year is about execution and the one thing my team said to me as I took this job was ‘what’s your strategy’. I said we don’t need any more strategy. Before I took this job I had read everything and reviewed it all. In my previous job I was deep with the cloud strategy because 42 per cent of Microsoft business is in the U.S. and that helped. But now I said lets look and see if it makes sense (to streamline licensing with the cloud). So this year its about landing everything.

CDN Now: Microsoft’s new pay for performance channel approach has received a lot of praise from small to mid size partners. They said it’s a fairer system, but the LARs are impacted by it. What are you doing for the large account reseller community?

J.R.: The ESA program for LARs at its core is still the richest program we have. It is an incredible program with over a billion dollars. On the surface, we have 374 LARs in the world. That’s a concentrated amount of money. The evolution of the LAR in this program is that they can still make money; more than every before. If you look at the one’s that are nimble and thoughtful they are excited about the corporate space. They can go up to 12 points of deals, which is rich margin on some of those corporate enterprise agreements.

What we did with the cloud is crafty in how we take the cloud licensing structure and put it into the licensing structure. This is good for the channel and we could have done massive retraining. LARs have tonne of employees and their ramp up cost would be a lot, but with this they can sell tomorrow and we I am proud on that.

CDN Now: What about the SMB solution providers. How will the new incentives announced at the Worldwide Partner Conference impact them?

J.R.: VARs were lucky if they got eight points in an open deal. Well, they would feel good about it I should have said. I think with these incentives in someway is good that Microsoft is setting the price. Now they have to deal on a different dimension. They have to get anchored on the annuity benefits. It is going to be tough and if you look at the other end it helps you. It may take three years to build it out, but you will be in a good space. As an example, let’s look at the recent economic downturn we went through. Microsoft did better than most because we had three year agreements in-place, while others went out of business.

For on Roskill interview with CDN check out the next print edition of CDN – Computer Dealer News.

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Paolo Del Nibletto
Paolo Del Nibletto
Former editor of Computer Dealer News, covering Canada's IT channel community.

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