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the new name for
© 2014 rhipe Pty Ltd
The CloudChannel Company
IDC's Channel Leadership Council
San Mateo, California, December 4, 2014
Bringing the channelwith you to the cloud
News from the front line
Warning: Perception is reality© 2014 rhipe Pty Ltd
rhipe – The Cloud Channel Company
• We exist to help service providers grow & thrive in the emerging cloud economy
• Born in the cloud since 2003• Listed ASX:RHP• 7 APAC countries• 10 vendors• 1300+ service providers
© 2014 rhipe Pty Ltd
Cloud: Customer view….
© 2014 rhipe Pty Ltd
SITUATION
© 2014 rhipe Pty Ltd
Most are not yet in, but…
• Customer enquiries have shifted
• Growing realisation that action is needed
• But…
• Confusion between messaging and “account management” action
• Change is difficult
• Help is wanted
© 2014 rhipe Pty Ltd
Two basic shifts they are facing
• Cloud is part of a wider social Shift from What and How.. to Why– From process focus to outcomes focus
• The service provider increasingly becomes the responsible party– From buyer beware to seller beware (Caveat emptor
to caveat venditor)
© 2014 rhipe Pty Ltd
1. Cloud is part of a wider social Shift from What and How.. to Why
“When it absolutely, positively has to be there overnight”
© 2014 rhipe Pty Ltd
1. Cloud is part of a wider social Shift from What and How.. to Why
© 2014 rhipe Pty Ltd
2. Focus shifts from before to after the sale (the Bow Tie diagram)
© 2014 rhipe Pty Ltd
2. Focus shifts from before to after the sale
Profit = Revenue – Cost of Sales ( x n) ( + ongoing delivery costs)
© 2014 rhipe Pty Ltd
ARR is the new measure
Revenue trough myth or real?
• Real for those who struggle!!!!
© 2014 rhipe Pty Ltd
BUT…
© 2014 rhipe Pty Ltd
3. Change is difficult
© 2014 rhipe Pty Ltd
SURVEY
© 2014 rhipe Pty Ltd
Survey Outline
• What support would service providers value
• What was the perception of how well vendors were delivering this?
© 2014 rhipe Pty Ltd
Survey participant profile
• Surveyed 15 Australian partners• Turn over: <AUD2 to <AUD200m• Staff: <15 to <500• All in the cloud:
– Started: 1997 to 2011– 57% Born in the cloud– Hoster/SI/VAR: 30%/30%/60% split– All motivated by “Insight”
• Growth rates– To 10th sale: 2 to 12 months (avg 6 months)– To 50th sale: 6 to 36 months (avg 20 months)– To 100th sale: 12 to 96 months (avg 38 months)
• Sales enquiries:– <50%/<99%/100%: 30%/40%/30% split
© 2014 rhipe Pty Ltd
Transformation Value vs Execution Quality
• Tech Training• Sales Training• BMT• Lead Generation• "Yellow pages" for partner
capability• Marketplace for partner
products & services• Financial support• Inner circle - access to
knowledge in advance
• Operational Advice -reporting, contracts etc
• Marketing/Event support• Internal Use Software• Marketplace
analysis/research• Reporting tools• License optimisation advice• Cloud Skilled Account
Management• Case Studies• Alignment to cloud (no
conflicts of interest)
© 2014 rhipe Pty Ltd
Value vs Execution
• Scales:– 1 – no value, 4 – Very
Helpful, 5 - High strategic value
– 1 – very poorly executed, 2 – Poorly Executed5 –Excellent
• In general any support welcome, poor execution
• 3 broad groups:– High value, well executed– Moderate value,
satisfactory to poor execution
– High value, very poorly executed1
2
3
4
5
1 2 3 4 5
Value to service provider
Perc
eive
d ef
fect
iven
ess
© 2014 rhipe Pty Ltd
Valuable and Executed Well
1
2
3
4
5
1 2 3 4 5
Value to service provider
Perc
eive
d ef
fect
iven
ess
• Tech training:• Deviation 0.86,0.60
• Internal Use Rights• Deviation 0.48,0.66
• Case Studies• Deviation 0.66,1.16
© 2014 rhipe Pty Ltd
“Technical training provides a platform for differentiation”
“Reference sales are key. Case studies are great, but need to be business focused and whole solution story”
“If we are not using ourselves then we lose credibility to recommend.”
Valuable but poorly executed
Value to service provider
Perc
eive
d ef
fect
iven
ess
• Lead generation• Deviation 0.43, 1.22
• Cloud skilled account mgmt
• Deviation 0.50, 0.70
• Alignment to cloud (no conflict)
• Deviation 0.50, 0.66
1
2
3
4
5
1 2 3 4 5
© 2014 rhipe Pty Ltd
“Conflicting compensation”
“Do not understand service providers”
“Hosters are 2nd class citizens”
“Unless we are 100% XYX then cannot get attention”
“Catch22 –need to look and act in old way to fit funding model!”
“Business coaching & short term ‘storm troopers’”
“Catch22 –have no history so don’t rank in searches, but existing do…!”
Partner Measurement Areas
• Vendor Focus vs Usefulness as a measure• Areas
– Technical capability– Sales Skills– Consulting skills– Revenue– Deployment rates– References– Case Studies– Industry experience
© 2014 rhipe Pty Ltd
Measurement
Usefulness as Measure
Perc
eive
d Ve
ndor
Foc
us
• Good measure and focus• Technical capability• Revenue
• Good measure, poor focus
• Industry experience• Case studies• Deployment rates• Sales skills
1
2
3
4
5
1 2 3 4 5
© 2014 rhipe Pty Ltd
“Still revenue vs effective deployment focused”
“We are not designing projects, we delivering outcomes”
“Industry recognition allows us to stand out”
“Consulting is no longer engineering, but business process”
“With SaaS we have more of ‘tell’ relationship – like accountants”
Hardware Partner Programs
• Hardware spend– 30% (bitc group) <10%
– 70% 50%+ h/w vs s/w spend
• Software vendor program engagement– 100% actively engaging in 1+ programs
• Hardware vendor program engagement– ~10% actively engaged
– ~20% engaged but not active
– ~70% not actively engaged
© 2014 rhipe Pty Ltd
“Even then poorly aligned to service provider needs”
“Really just puts us on a marketing list”
“Tin is just tin, we pick tier 1 to be safe but after that…” (80%)
Hardware Partner Programs
• 100% like financial support (!!)– 75% true subscription model
• 50% early engagement– Differentiation
– Credibility
– Trusted advisor
• 60% poor account management
© 2014 rhipe Pty Ltd
“If the customer takes a laptop as part of the managed service then we lower our monthly charge”
“We engage as much as required to get a price break” (40%)
But talking to 2 x senior APAC execs, service providers are only growth area
“There’s no margin so make it easy for me. Early engagement helps me control the conversation”
“3rd platform 0% CAGR”
4. Interpretation – our survey says
• You are good at doing the things you are familiar with
• Your channel wants your help
• You are not “perceived” to be managing the new engagement model very well
• You need a different focus on measures used to recognise the “new” best
© 2014 rhipe Pty Ltd
MESSAGES THAT RESONATE
© 2014 rhipe Pty Ltd
Service Provider Best Practice Framework
© 2014 rhipe Pty Ltd
Business Strategy (Commercialisation)
Delivery Strategy (Consumption
Platform Strategy (Enablement)
Research Strategy (Innovation)
5. Delivery and Business Strategy areas are a “white space” of opportunity
CAREER BREAK MUMS BACK INTO ACCOUNTING INDUSTRY
Differentiation example
© 2014 rhipe Pty Ltd
Interesting Dynamics
© 2014 rhipe Pty Ltd
Cloud Positioning – earning the right to discuss the impossible
© 2014 rhipe Pty Ltd
Custom/Complex -> Commodity (what I do today but for less)1
Cost prohibitive -> Affordable (what I have wanted to do and can now afford)
2
Impossible -> Possible (enabling
me to consider creative ideas)
3
Business Value
Busi
ness
Ris
k
It is a Hybrid World = opportunity
Hybrid
Public
Private
Service Provider
Office
Home
Mobile
IoT
Etc etc
© 2014 rhipe Pty Ltd
Have a Plan – document & share it
© 2014 rhipe Pty Ltd
Why?
How?
What?
(Simon Sinek – inspire action)
Purpose, Autonomy & Mastery
(Dan Pink - motivation)
(Blue Ocean Strategy)
COSTS
BUYERVALUE
VALUEINNOVATION
Key Partners Key Activities
Key Resources
Value Proposition
Customer Relationships
Channels
Customer Segments
Cost Structure Revenue Stream
InfrastructureOffering
Customer
Finance
Source: Business Model Generation, Alexander Osterwalder & Yves Pigneur, et al.www.businessmodelgeneration.com (Business Model Canvas)
(Purple Cow: Transform Your Businessby Being Remarkable, Seth Godin)
Useful Links• Simon Sinek – Start with the Why rather than What
– Youtube video of the TED talk on How great leaders inspire action -http://www.youtube.com/watch?v=qp0HIF3SfI4
• Blue Ocean Strategy – a classic
– Wikipedia summary - http://en.wikipedia.org/wiki/Blue_Ocean_Strategy
– Youtube summary from one of the authors - http://www.youtube.com/watch?v=clp-IMpuwaQ
• Dan Pink – What motivates people
– Great audio/visual presentation - http://www.youtube.com/watch?v=u6XAPnuFjJc
• Business Model Canvas – a simple way to model possible options for your business
– 2 minute overview - http://www.youtube.com/watch?v=QoAOzMTLP5s
– Wikipedia summary - http://en.wikipedia.org/wiki/Business_Model_Canvas
• Shift Happens - From the world of education but highly relevant to change
– http://www.youtube.com/watch?v=XVQ1ULfQawk
• Sir Ken Robinson – Do schools kill creativity
– One of the top TED videos (inspiring and funny) -http://www.youtube.com/watch?v=iG9CE55wbtY
© 2014 rhipe Pty Ltd
© 2014 rhipe Pty Ltd
Summary - The 3 R’s
einforce
emind
eveal
rr
r© 2014 rhipe Pty Ltd
Contact Details
• Stephen Parker
• Head of Cloud Strategy, rhipe
• +61 424 321748
© 2014 rhipe Pty Ltd
