That’s right, I’m a PC.

I wear no suit. I build amazing products. I enable software developers to realize their deams. I’m a PC.

I’ve been thinking about business models quite a bit lately.  Mostly because of the work I am doing on cloud services.  In fact, many of the conversations I have been having at our Worldwide Partner Conference over the last few days have specifically focused on cloud compute business models.  I am going to put this out there, and let the VCs be damned.  There’s a reason that “free” and “fail” both start with “f” and have four letters.  “Free” is my new four letter word.  A business model that is based on free is frail and bound to fail.

At some point, the tyranny of the free has to go away.  Mashable had a similar article just the other day.  37Signals hammers on this point constantly.  It’s real simple, as far as I am concerned.  Make something, sell it, make more, and then sell more.  It’s a nice virtuous cycle.  I have lost count of the number of partners with whom I have met this week who have multiple millions of dollars in revenue attached to coding (ISVs or custom application development).  Selling ads against your app requires scale.  Scale comes to a very small number of apps.  There’s a ton of software left to be written that will never be used by enough people to be ad supported.

I want to offer the following: The free movement is completely wrong minded.  I speak from personal experience on this one.  The company I just sold has software+services that are completely free.  In just 14 months, we signed up 150K users, but the app didn’t have an engagement model that supported high numbers of page views.  We listened to one very loud board member who insisted that we be free and never charged for the product.  In the end, we sold the company (for a good result), but we were on fumes.  Developers need to be paid, and they don’t accept page views.  Had we started charging from the outset, I suspect we would not have sold so soon.

In the next few weeks, I plan to have some posts on the business models that are out there and what probably makes sense around cloud compute, but we, as an industry, have to refocus on solving real problems, and charging money for those things.  The penny-gap is getting harder and harder to cross with so much downward pressure on pricing from people who are willing to give stuff away for free.

Sometimes, it’s the little things that matter.  During all of the sessions here, any pre-made video has close captioning.  During the major keynotes, they had real time close captioning.  Looking around, I can see international partners using headsets to get real time translation.  I have seen real time sign language once or twice at a keynote for other conferences, but certainly nothing of this scale.

First things first.  I have been silent on the wire as things have settled down a bit.  The wife and I finished up the vacation and needed to figure a few things out.  First, where were we going to live?  We looked at a few places, but ultimately we decided to return to the city where we met.  In April we found a place in Redmond, WA, and are settling back into the Pacific NW.

Second, what was I going to do for work.  Having been in startup land for so long, I wanted to remove myself from the constant fire drill of day to day startup life.  This decision was made a little bit easier from the fairly strong recruiting tactics used by my old boss who heard I might be returning to the PacNW.

As of May 12, I have joined the Cloud Services team at Microsoft, working on Ecosystem development.  This is going to be one of the most challenging roles I have had in my professional career.  Microsoft is definitely late to the maket when compared to Google, Amazon and even Salesforce.  True as this may be, I am very excited about the development effort happening on our cloud services, and what it will mean for our partners.

Speaking of partners, I am at my very first Worldwide Partner Conference.  It’s pretty overwhelming, but there are a few things that have jumped out at me in just the few short hours I have been here:

1) We have a ton of partners.  I guess I always knew this, but sitting inside of the Houston Toyota Center, and seeing it packed with people is amazing.  And we’re not here to watch the Rockets stink up the joint.  The entire lower level and floor are completely packed.  Partners from all over the world.

2) Microsoft’s ecosystem is very strong.  I learned a new factoid today.  For every $1 in sales of Microsoft products, there are $7 more of sales/services tied to a Microsoft partner, and 96% of all revenues at Microsoft comes through a partner.  Those numbers simply blew me away, and we really need to do a better job of telling that story.  Our ecosystem is probably our must unheralded weapon in our toolbox.

3) Silent majority versus the tyranny of the minority - it’s interesting to see so many people who have positive things to say about Microsoft.  If you spend too much time in the echo chamber of Silicon Valley, you are indoctrinated with the incontrevertible fact that Microsoft products suck.  I have never believed this, but certainly over the last few years, having lived in the LAMP stack, it was pretty deafening.  However, talking with these partners, about their businesses and about their customers, it’s astonishing to me to hear so many positive stories.  You can tell a lot about what matters to people when the economy is tight, and I was expecting to hear a lot of bitching about Microsoft products.  I am happy to say that was not the case.  There’s a very vocal group of haters out there, and the new blog / twitter communication channels makes it very easy to hear them.

4) I have a lot of work to do to get immersed in the pro-MSFT blog community.  Most of the A-list bloggers are very pro-LAMP.  I need to find the strong voices in the Windows camp.  In fact, it’s my job to become one of the A-listers.  Microsoft has done a great job of using social aspects of the web to connect with customers and users, and I look forward to continuing on that in my new role.

5) Billion Dollar Baby - here’s a pop quiz: can you name all of the billion dollar businesses within Microsoft?  I’ll bet that you will be surprised to hear that there are more than 2.  In fact, there are more than 6.  The number is under 10, but stop and think about that for a minute.  A billion dollars.  That’s a lot of opportnuity for Microsoft and people who work there, but also for partners who build their businesses on top of our software.

So that’s it.  Lot’s going on, and not a ton of time for updates until now.  It’s time to get serious about the blogging again.