Marlow's Microsoft has head in the clouds

Pip Marlow will lead Microsoft Australia during an especially challenging period for the software vendor and its sales partners, as it shifts from its reliance on software licence renewals to the ‘as-a-service’ model of cloud computing.

Marlow [pictured] was annointed yesterday as general manager of Microsoft Australia (which internally, she said, equated to ‘managing director’ as was the case with predecessor Tracey Fellows).

Marlow has broad experience across channel sales, government sales and small business solutions during her 15 years with the company - a period in which the vendor branched out from the desktop into enterprise computing at one end of the market, and smartphones and consumer gaming consoles at the other.

But possibly the biggest step in Microsoft’s evolution will be the shift from selling software licences and boxed product on local shelves to online services delivered from its Singapore-based Azure data centre.

Today we asked Marlow how she would align Steve Ballmer’s “all bets on the cloud” vision with the needs of her Australian customers and partners.

Bullish on cloud

Marlow said her top priority for leading Microsoft’s Australian operations was to ensure the company has “strong growth plans”.

“The transition to the cloud is a major part of that,” she said. “Microsoft has committed 90 percent of its R&D staff focused on cloud development.”

The opportunity for Microsoft, she said, was two-pronged: “how we help customers save money” and “how do we enable channel partners to innovate” around its cloud strategy.

Those “opportunities” can equally be expressed as challenges. Namely, how do you keep customers buying Microsoft products in the face of cheaper web-based alternatives? And how do you balance this against maintaining relationships with Microsoft’s traditional channel partners?

“It’s the same world for our partners as it is for us,” Marlow said, only she saw the scenario in cup half-full terms.

For partners, Marlow said there was a potential for services revenue to be derived from helping customers migrate from on-premise to cloud deployments.

Microsoft was offering “strong channel incentive programs” to help customers make this happen, she said.

But once a customer is signed up to an Azure-delivered service, Marlow conceded that the VAR has effectively made a commission sale.

Marlow said there was still a potential for partners to earn “ongoing services revenue” from these customers – but these opportunities are limited to providing additional support or from developing custom applications that extend the Microsoft platform.

Accordingly, Marlow said the most desirable skills channel partners will require are software development skills and an ability to maintain strong relationships with customers.

“This is going to require a deep understanding of customer needs,” she said.

Asked for examples of the “channel partner innovation” she had seen in the face of these challenges, Marlow cited MYOB’s move to use Azure as the platform to deliver its accounting software to small and medium businesses, and cited how financial services organisations have used Azure to handle peak workloads (such as an initial public offering, for example).

Further, Microsoft is “evolving” its relationships with local telcos such as Telstra and Optus to meet the needs of its ‘three screens strategy’ under which the vendor intends to deliver the same user experience across the PC, smartphone and interactive television platforms.

The launch of Windows Phone 7 “leap-frogged” where Microsoft had been in the smartphone market, Marlow said, winning over users that wished to balance their corporate communications needs with their personal interactions on social networks.

“And best of all it is integrated end-to-end [with Microsoft’s wider platform],” she said.

Microsoft’s real test in 2011, however, will be the launch of its Microsoft’s Office 365 suite, scheduled for launch in February.

Office 365 is the next generation of Microsoft’s software-as-a-service play and a replacement of BPOS (business productivity online suite).

Marlow said Office 365 will be far broader than the handful of SKU’s on offer under BPOS. It will also offer stripped-down web-based “kiosk” versions of Microsoft software for those field staff that do not require a fully functional desktop.

“It will also change the way customers can license product,” Marlow said. “It will give them the choice to scale up and down as their needs fit.”

But Marlow said that despite Microsoft’s investments in Azure and Office 365, the organisation will remain partner-led.

“Microsoft is quite deliberately dependent on our partners and that will continue to be our strategy,” she said.