Microsoft Retools Sales Operation as Azure Takes Central Role

Judson Althoff, Microsoft’s new business sales chief, says the company stumbled by trying to sell its web-based tools as if they were just another piece of out-of-the-box software.

“It was a flawed strategy to try to sell Azure like, ‘Do you want fries with that?’ ” Althoff said in an interview, referring to the company’s on-demand processing power and data storage. “But it isn’t our approach today.”

Microsoft grew into a business software giant in part by tacking on new products to the suite customers were already buying. Bundles of Windows and Office grew to include server software, database tools, and other products.

When Microsoft, chasing the success of Amazon.com’s Amazon Web Services business, started pushing its own package of rented processing power and web-based business tools, the company’s salespeople treated them as just another product to be added in sales talks.

But some customers didn’t know what to do with the tools, and Microsoft’s salespeople, used to a sell-it-and-forget-it model of pushing software licenses, weren’t in a position to suggest ways the company’s Azure cloud services might be useful to them.

Althoff, a former Oracle executive who joined Microsoft in 2013, says the company has shifted its salesforce to compensate.

Microsoft in the last year has added more than 1,000 salespeople with specialties in “cloud solutions” to its ranks, Althoff said on the sidelines of the company’s Ignite information technology conference in Seattle. Those roles are designed to incorporate expertise in how business can make use of Microsoft’s new offerings, envisioning the salespeople as a sort of digital consultant.

Layoffs, including about 900 disclosed in July, fell elsewhere in the sales organization.

“Our sales approach has changed entirely,” Althoff said.

Althoff has more time to devote to those kind of details than his predecessor. Before stepping down in July to run a unit of a Chicago-based investment firm, Microsoft Chief Operating Officer Kevin Turner built one of Microsoft’s largest corporate fiefdoms.

In addition to sales, the former Walmart executive was in charge of the company’s internal information technology team, operations, foreign subsidiaries, and even a chunk of corporate finance. At the time of Turner’s departure, more than 51,000 people reported to him.

With Turner’s departure, Chief Executive Satya Nadella broke up the organization.

Jean-Philippe Courtois took charge of the company’s sales-focused subsidiaries. Marketing head Chris Capossela would lead consumer-focused sales. Operations and finance units went to other groups.

Althoff, who previously led Microsoft’s North American sales, would take on worldwide commercial and government sales, as well as the company’s business advisory and developer outreach teams.

The company’s cloud, once an afterthought in broader conversations about Windows Server licenses or Office purchases, has become “a bit of an anchor tenant” for his staff’s pitch, he said. That’s particularly true if customers want to plug into Microsoft’s new, off-the-shelf machine-learning and data crunching tools.

“It really does put Azure at the center,” he said.