Good morning from Los Angeles! The Staples Center is rapidly filling in and there’s an opening dance routine on the main stage…. it looks like WPC will be getting underway any moment now.

Out to kick things off, Microsoft channel chief Jon Roskill

“Sometimes, changing the world is what we’re about,” Roskill says. Apparently, there are a record number of partners from Japan in the house here in LA.

Roskill showing a video of highlights of last year’s Day of Giving Carnival — games, contests and other fun benefiting the Boys and Girls Clubs of Los Angeles and the Magic Johnson Foundation.

Awesome! Apparently, the Danish attendees brought a bunch of Lego with them for the Day of Giving Carnival. Nice touch.

“This conference is all about how we’re going to win together,” Roskill tells the 12,000 partners from 120 countries in attendance.

“Virtually every partner type is here and represented,” Roskill says, from distributors to learning partners to ISVs.

A record number of partners representing Dynamics technologies, Roskill says, before talking about the Dynamics Referral Program (5 per cent of deals for partners who refer business.)

Wow. $10.1 billion in partner-to-partner activity in the Microsoft channel last year, Roskill says. “Get out and take advantage of that opportunity,” he urges partners.

“You are the elite of the largest technology ecosystem in the world,” Roskill says.

Themes for the event – winning together and changing the world.

“For every dollar Microsoft makes, partners make $8.75,” Roskill says, making it a $580 billion industry in the Microsoft channel. “If we were a country, we’d be number 19, between Indonesia and Swizerland” in terms of world GDP.

Roskill jokingly tries to get partners to boo VMware’s name. But there are a lot of Microsoft partners who are also big on VMware.

Roskill says partner input last year drove the WPC agenda this year. Ballmer to talk about “the future we’ve talked about being here right now.” Tomorrow, talking about what’s coming next with private and public cloud, on-prem and mobility. Day three about partnering and competing, with Roskill back on stage, plus Kevin Turner and guest speaker Sir Richard Branson.

In other words, pretty much the same keynote schedule as the last few years in terms of focus.

Thursday night closeout show to feature Los Lobos and Smash Mouth.

Microsoft has always led in transitions, Roskill says, although has been challenged at each phase. Microsoft has been successful “through following a unique and consistent strategy” of creating platforms that enable profitable partner business models, delivering 95 per cent or revenues or more through VARs.

Today, 58 per cent of Microsoft partners working with the cloud, but more opportunistically than as a core business. “We’re going to give you more reasons over the course of the next three days to continue the transition to the cloud,” Roskill says. Cloud content “baked in” to every track here at WPC, he says.

And with that, Roskill hands it over to CEO Steve Ballmer.

“I am beyond excited to have a change to be here today at WPC,” Ballmer starts, says that coming to this show is “about the most exciting thing I get to do in any 12-month period of time.”

After a relatively low-energy (for Ballmer) presentation last year, Steve seems to be back in full-energy full-on-shouting mode this year.

“Customers aren’t quite as all in as you are,” Ballmer says, and partners are pushing both Microsoft and customers.

If partners do 95 per cent of Microsoft’s business, “I can’t find the other 5 per cent. So I’m just going to say we’re 100 per cent through partners. So thanks for pushing us and thanks for your work.”

Last year’s WPC was “scary,” Ballmer says.

Says Microsoft was talking about cloud four years ago — but until last year, the company really only talked about Software + Services as opposed to SaaS or full-on cloud.

Over the last few years, partners have told him that they’re not sure if they like the cloud. Last year was scary because “I said we were 100 per cent in on the cloud, and we need partners who want to come with us.”

“To see 15,000 people here coming with us, pushing to the cloud, pushing Windows Azure, pushing Office 365, that’s exciting after being nervous last year that some of you wouldn’t be all-in on the cloud.”

Today, 40,000-plus partners who identify themselves as cloud partners, including new partners to the Microsoft partner community.

“I’m very appreciative of the fact that you’re making the transition with us,” Ballmer says. 

Ballmer’s presentation graphic detailing the year at Microsoft looks a lot like the live tiles in Windows Phone 7. Nice touch.

Ballmer offering his “report card, or state of the state” on how Microsoft is doing on building business with partners.

Talking about creating software for three screen – small, medium and biz, or phone, tablet or TV and PC.

“Across the board, the last 12 months were really quite phenomenal for us,” Ballmer says. “Consistently through the first three quarters, we’ve delivered absolutely outstanding double-digit growth rates in the Office product line and the Server product lines, and that testament to the work our partners do across the globe.”

“Microsoft is absolutely unique in the breadth and level of integration across the product line. We’re the only company out there that’s investing both on-premise and in the cloud,” he says. Investments on one side, he says, helps you build the other side as well.

Talking about how Microsoft partners are using Kinect sensors in business applications.

Dynamics – “We’ve switched out our competitors’ customers and brought them into our fold.”

Office 365: Ballmer says “the other guys have yet to show up.” Interesting comment, given the success of Google Docs.

Phones – “We’ve gone from very small to very small, but it’s going to be a heck of a year” he posits.

“It’s been a year of great momentum and progress, but not without a lot of competition. These products are the foundation for a lot of business growth.”

“If you told me 10 years ago that we’d still be growing in double digits with Office 10 years later, I’d have been dubious. But yet … that’s exactly where we are.”

Ballmer says Bing is the “Microsoft product partners spent the least amount of time with,” but that will change — talking about opening it up into a platform that partners can build against. But it’s an important part of the company’d device strategy and cloud strategy. So he’s going to spend a bit of time on it anyways.

“The opportunity to innovate in this space depends on traffic,” he says, so having growth is crucial to being able to integrate.

“The Internet is changing more today than any time in history, moving form an Internet about HTML documents to an Internet that’s about the social graph, location, accessing from mobile devices.” Those changes give an opportunity to chip away at Google’s search dominance, Ballmer says.

And now we’re onto a Bing Demo. Showing integration with Facebook and how search — sorry, decision-making — can be pulled into Bing search results.

The Bing differentiator seems to be integrating with partner sites to make it easier to do things from search results — search for Dodger tickets, get a one-click link to buy tickets from Microsoft’s Bing tickets partner.

“Make decisions and take actions” is how Microsoft phrases it.

“If search and Bing is the first cloud application, the most important for the people in this room are around the server platform, the productivity and collaboration applications,” Ballmer says — onto discussion private cloud (Windows Server with Hyper-V) and public cloud (Azure).

In the last 12 months, Microsoft has “made major advances” in Windows Azure functionality and capability. “We have a much more coherent and complete public cloud and private cloud story” with System Center, with Visual Studio, with Active Directory.

That includes mobility from private cloud to public cloud, extending on-prem with new functionality on Azure. “In this world, things will move to the public cloud, but LOB applications will move at a much more measured pace than other parts of the infrastructure.”

Ballmer says that its public cloud competitors have applications that have merit “in some limited type of way,” but that Microsoft partners want the flexibility of on-prem, private or public cloud.

Talking about Windows Azure reference customers — Boeing, which built an app to market the 737 with the help of Microsoft partner Wirestone with thousands of images to show off the plane; American Airlines, which has built an updated application for Windows Phone, offering realtime information via live tile on gate and baggage information, etc.

Dynamics – this is the 10-year anniversary of Microsoft in the biz application space. “Over that 10 years, 20 per cent CAGR.” Ballmer offers his thanks to Dynamics partners, particularly those who’ve been with the company the whole way.

“Whether it’s ERP or CRM, we see a unique POV coming from Microsoft in terms of flexibility of development and ease of use of the program.”

“When you’re over a billion in revenues, and into the hundreds of millions in public, there’s no doubt that you’re all in, and we want partners who push with us,” Ballmer says of the Dynamics opportunity.

Two out of three of CRM design wins this year have been in the cloud, Ballmer says.

“When does ERP move to the cloud” – starting with Dynamics NAV early next year, Microsoft will move ERP apps to the cloud.

Onto Office — 100 million licenses of Office 2010 so far, plus the launch of Office 365 recently.

50k businesses around the world trialing Office 365 – about one business every 25 seconds, from very small to very big.

Ballmer slips and refers to documents as papers. “See how old I am?” he quips. “I still refer to paper as if it matters.”

“Any place a partner engages with Office 365, we win,” he says of competing with Google Docs. Asks for partners to keep the energy up in signing up customers.

“Skype… subject to regulatory approval, I have to be careful here, but I’m very excited about acquiring Skype.”

Skype is consistent with one of Microsoft’s core businesses, collaboration. Does this mean they’re less serious about Lync? No. “Use Skype to allow the enterprise to have control of collaboration through Lync, but use Skype to connect to consumsers, partners around the world.”

“Lync is the product that is growing most quickly in the enterprise” among Microsoft’s portfolio, Ballmer says. That’s been SharePoint’s position for quite some time… that’s a significant change.

“With Skype under the umbrella, we’re going to be able to do even more fantastic things together.”

Moving on to Xbox. Talking about using Kinect as a business tool, but “the Xbox team is still motivated by entertainment.”

Offering a preview of the Xbox 2012 user interface, which is very voice-centric. Coming to a gaming console near you in time for Christmas this year.

Oh yes… and it has live tiles that look like Win Phone 7, to nobody’s surprise.

Bing voice search. “You say it, and Xbox finds it,” Ballmer says. Search through Xbox Live, Hulu, Netflix and other content providers.

I’m surprised that Ballmer is doing a very poor job of making the Xbox pitch relevant to the Microsoft business partner community… aside from those who use the device as consumers of the technology… thus far.

Getting back on topic a bit, talking about Windows Phone 7. 9 out of 10 purchasers would recommend it. “It’s a very active, competitive market and we’ve got a lot of work to do to break through.” Says app ramp-up for Windows Phone faster than Android or iOS, and talking about the Nokia partnership.

“We know we’ve got a lot to do, but like the cloud, like NT, we’re all in when it comes to mobile devices, whether if phones, or slates or console devices. We’re pushing extremely far and extremely fast.”

And onto Windows 8. “A true re-imagining of Windows PCs and the dawning of Windows slates.”

Out to discuss Windows, Tammi Reller, corporate vice president for Windows and Windows Live.

But first, the opportunity with Windows 7 today. Last year at WPC, talked about the fast start for Windows 7. “Our partners are at the center of that success,” Reller says.

Companies like GM are “inches away” from 100 per cent deployment of Windows 7, Reller says.

End users are happy with Windows 7 because they’re getting a new machine and getting off a “decade-old” platform with “a dated browser.” Clearly, as usual, Microsoft’s biggest competitive threat is older versions of its products sticking around. In this case, the crosshairs are clearly on XP’s forehead.

Reller detailing power savings customers are seeing from moving to Windows 7 — some impressive numbers.

Half of Microsoft business partners are working with businesses on Windows 7 deployments, Reller says.

“So many great examples” or partners working with Windows 7, “but we’re really just getting started.” Still two thirds of business PC workers on Windows XP. “It’s urgent and important work for us to go after,” Reller tells partners.

Four motivators for Windows 7 migrators, per Reller:

1. Value — Efficiency, productivity
2. XP is end of life “one thousand days” from now. Reller expects 
3. The cloud. “Windows 7 is the best foundation for the cloud and for consuming cloud features. 
4. The path to the future and Windows 8.

Beta announced of version 2 of Windows InTune, including software deployment and more management options. Will follow up with more information later.

Meanwhile, Reller’s talking up Windows 8. So far, its communications have been focused on getting partners and hardware providers ready.

Next update: September in Anaheim. Translation: No major Windows 8 news here at WPC. Bummer.

“For 20 years, Windows has defined the computing landscape for well over a billion customers around the world,” Reller says.

“Developers and partners want to build apps that take advantages in the changes in the ways people interact with devices,” she says, which is part of the design criteria for Windows 8.

Talking about Windows running on system-on-a-chip technologies, namely ARM, as well as Windows 8 rnning SoC x86 devices.

“We’re still fairly early in the cycle,” Reller says. But the demonstrations offered so far show off “the  richness of Windows running on the ARM platform.”

“Windows 8 is the rei-magination of Windows from the chip to the user interface,” including designing it “from the ground up” to work with touch-only tablet devices.

Many partners want to know more about the new Windows 8 interface, Reller says. No surprise there… it’s a pretty significant change, looking more like Windows Phone 7 than today’s Windows desktop.

Apps are “designed for touch but work great with a mouse and keyboard too,” Reller says.

“We see a future with a heterogenous environment of Windows 8 devices and apps” working alongside Windows 7, Reller says. Hardware and software investments will be preserved. But meanwhile — keep pushing on Windows 7. “The best way to get to the future is to embrace the present.”

“Together we can add measurable value to customers by getting them on Windows 7, Office 2010 and the latest server infrastructure,” Reller says in wrapping up her presentation.

And with that, Steve Ballmer is back on stage.

“Windows is the backbone of Microsoft,” Ballmer says. “Windows, Windows, Windows, Windows. It’s where we’re grounded.”

“Our industry is more dynamic, things are changing more than ever before. That’s true for Microsoft, and that’s true for everybody in this room today.”

Despite general economic malaise, IT industry is growing and creating new opportunities. “We had a heck of a year together,” Ballmer says.

Seems like Ballmer is putting a bow on his presentation.

He’s looking for partner agreement on three things.

1. We had a great year last year.
2. There’s opportunity for phenomenal growth.
3. “At the end of the day, we’re 100 per cent in with you.” 

“As go you, so goes Microsoft,” Ballmer tells partners.

Ballmer thanks partners, and wraps things up, bringing Jon Roskill back out.

Roskill and Ballmer are doing their Worldwide Partner Award winners parade. Nice touch this year — little videos with each partner introducing their wins as they get their handshake and photo with Ballmer and Roskill.

And on that note, Roskill wraps things up, and we’ll call this liveblog a wrap for now. Much more coverage from WPC later today on ChannelBuzz.ca — thanks for joining us for the liveblog!