Microsoft channel partners need to urgently redefine and evolve their businesses so that they can resell the company's cloud computing products, according to Chief Operating Officer Kevin Turner.
Just as Microsoft has embarked on a sometimes painful reinvention, its partners need to follow suit, because the alternative is to miss a massive opportunity in cloud computing, a vehement Turner said Monday at the company's Worldwide Partner Conference.
"We are making progress on this transformation, really good progress," he told about 16,000 attendees who packed the Verizon Center stadium in Washington, D.C., Monday.
What worked in the past for Microsoft and its partners won't cut it in the "mobile first, cloud first" world, he said.
Turner rattled off statistics to support his claim that Microsoft's cloud services, like Office 365, Azure and Dynamics CRM Online, are growing robustly, but said the work is far from over.
"We still have a lot of work to do but we have a lot to be proud of," he said.
He cited "hard decisions" Microsoft has made recently, such as offering its flagship Windows OS free to hardware partners making devices with screen sizes of 9 inches and smaller, and porting its Office apps to iOS.
"We will do what is necessary to win in the marketplace," Turner said.
Selling on-premises software was "good for you and us for a long time" but the future lies in the cloud and mobility, and Microsoft plans to go in that direction "with our partner community intact," he said.
Right now, there aren't enough partners on board. Microsoft has more than 600,000 partners worldwide, but only 53,000 are reselling cloud services.
"We don't have enough partner capacity anywhere in the world for cloud," Turner said.
While that number is up more than 100 percent from last year, Turner said he wants to bring it to about 150,000 in the next 12 months.
"You need to get on this train. This market is being made now," he said. "This is a huge opportunity for you."
The cloud business offers higher revenue and profits than the on-premises software business, he said.
In addition to heavily promoting Office 365, Azure and Dynamics CRM Online, Turner also pushed Windows, saying the next major rev of the OS will be a hit, especially for businesses.
"This will be a great, world-class enterprise OS when it comes out, with game-changing functionality for enterprises," he said, without providing more details about the product's features or its expected release date.
Microsoft is pushing ahead with its vision of having a single Windows API (application programming interface) for all types of devices, from small smartphones to massive displays, so that developers can write applications once, he said.
He also encouraged partners to get behind the company's hardware devices, such as Surface tablets and Nokia smartphones, as well as Windows-powered tablets, laptops and PCs from hardware partners.
He said OEMs this year-end holiday season will release Windows devices in the sub-US$200 and sub-$100 price range, including an HP Stream laptop that will cost $199.
"We'll participate in the low-end" part of the computing device market, and challenge Google's Chromebooks, he said.
Microsoft, the king of the PC OS with a 90 percent share, is very much a challenger in the total OS market for computing devices, including smartphones and tablets, with a 14 percent slice of the pie.
"We need to have a challenger mindset," he said.
Turner also urged partners to pitch the value of SharePoint and Yammer for enterprise collaboration to their customers, while also citing Skype, OneDrive, Outlook.com and the Xbox. He also highlighted security and IT management tools, like the Enterprise Mobility Suite.
Turner's impassioned speech closed a string of keynotes that started at 9 a.m. and finished at noon, all designed to get partners enthused about Microsoft cloud products, so that the number of partners reselling those services rises significantly in the coming year.
Microsoft also announced a series of incentives and changes for its partner programs.
Juan Carlos Perez covers enterprise communication/collaboration suites, operating systems, browsers and general technology breaking news for The IDG News Service. Follow Juan on Twitter at @JuanCPerezIDG.