Q&A: Phil Sorgen, Microsoft's global channel chief

Microsoft appointed Phil Sorgen as its global channel chief last September. Speaking to CRN, he explains his key priorities in the role and addresses hot Microsoft channel topics such as the transition to cloud and the distribution strategy for its Surface tablets.

Can you give a brief insight into what your channel strategy has been so far?

I think of partnering in [the form of] four pillars: they're the lens through which we evaluate how we're doing broadly as a company around partnering.

Firstly, [we invest] over $9.5bn (£5.7bn) in R&D every year. If we don't keep creating products that meet the needs of our customers and which partners can build their business around, then the rest of it won't matter; they will go to competitors.

The second one is around creating market. We have to create unaided awareness of our products and we have to provide a trusted brand behind them - especially as we do more and more things in the cloud. Trusting where [customers'] data resides is really important.

The third thing is enabling partners - it's a broad category for all the things we do. We make investments; we provide incentives; we provide marketing tools so [partners] don't have to start from scratch. All of those enable them to build pipeline.

The fourth one, which I get to see as I travel, [is that] we have one of the largest field organisations - sales and marketing - across the world. We take a lot of pride in being a local company in those countries.

You recently overhauled the Microsoft Partner Network to incorporate cloud into everything partners do. What are the challenges and benefits of a deeper focus on cloud technology for resellers?

We are spending a lot of time with partners on the "how" [element of the transformation to the cloud. What worked in the past may not work in the future so we're trying to show them that [their] business model may look different in the future; they may move more into managed services [or] create more IP services.

There are a couple of things we have shown partners as they've seen this transition. Firstly, as they've moved into cloud they have found that their [traditional] business is quite local. Now they're able to acquire customers in a greater geographical area with cloud-based offerings because of the repeatable [business] and the selling process.

The second thing is they're finding their deal margin is increasing and that's because they have a predictable back end and are able to leverage predictable approaches. Third, especially for ‘traditional' partners, they worried they would erode their [traditional] business. But due to cloud they are able to acquire customers at a faster rate and cross-sell [to them].

Since you launched your Surface tablet in 2012, your go-to-market strategy has come under fire from some partners which have been keen to sell the tablets but have been unable to. What are your future plans for Surface distribution and will a wider base of resellers ever get their hands on it?

We will definitely look at plans [to expand the Surface channel] at the right time when it makes sense and can be profitable and successful. [This was] a new product category for us - it's not like we hadn't been in the devices business, we just hadn't been in this category - so it's really important that we have all the processes matured and very successful for our partners when they make an investment.

We're very bullish on the Surface product and bullish that it's a great opportunity for those in the [authorised Surface programme] today and at some point in time we will continue to evaluate the need for expansion.

You have a lot of OEM partners whose devices run Windows 8. How big a factor is keeping those partners happy in your decision to keep Surface resale to a small group of VARs?

[We] make sure in every change we make to any programme - Surface or any others - that the channel ecosystem is ready and we're ready to be a profitable partner with them.

So I don't think OEM partners are in that evaluation point for me. My point about OEM partners is that even if and when we expand our commercial Surface channel, we'll still be very focused on a rich assortment of third-party devices across price points and we'll continue to educate our customers and our own internal sales force on the various devices which will meet the needs of customers.

Will the recent appointment of Satya Nadella (pictured) prompt any tangible changes to the channel side of the business?

I can't speak for Satya but what I can say is he's been a long-term Microsoft employee; he's been engaged with our partners for years; he's been a regular at our Worldwide Partner Conference and he believes strongly that we're moving to a cloud-first, mobile-first world. His focus is on customer experiences and having a broad partner ecosystem [in order] to be successful.