Selling Business Email to SMB End Customers

Agenda

• Quick solution Intro• Opportunity Overview

– Hosted Exchange Business Email– And beyond

• Best practices selling Hosted Exchange• Helping you succeed

– Resources available to you

QUICK SOLUTION INTRO

Hosted Exchange Solution Overview

•But optimized for deployment by service providers (e.g. monitoring, reporting, provisioning, scalability, etc)

Solution based Exchange 2007

•Using the Service Provider License Agreement (SPLA)•Service providers charged on a per user per month basis (pay-as-you-grow)

Licensed by Microsoft to

Partners

•Pay per month to service provider•Typically also purchase additional storage, mobile access, anti virus/spam

End customer “rents” a mailbox

What is Hosted Business Email?

Hosted Exchange 2007 based email solution that includes all collaboration features, Outlook 2007

and SharePoint

Work anywhere and at any time using

any device

Deliver new levels of productivity and

flexibility to SMBs

Free them to focus on their business

rather than worrying about IT

infrastructureRemove barriers

that have kept SMBs from adopting +

fixed price

End Customer Experiences Enabled

POP/IMAP

Server Product End CustomerExperience

Internet Explorer

Experiences Enabled

Richest Client ExperienceEasier to on-board end usersVoice access to email, voicemail in email

Full Outlook Web AccessIE-based equivalent to rich client

Basic Web AccessLimited inbox functions without collaboration

SharePoint team sites + 40 templatesInnovative ISV applications for verticals

Basic Consumer EmailInbox send/receive Introductory offer

Mob

ility

(Pus

h em

ail)

Instant Messaging & PresenceKnow online and offline status, as well asInteract in with real time chat, voice, video

OPPORTUNITY OVERVIEW AND SIZING

Hosted Solution Adoption is Growing Explosively

Hosted Exchange TCO is fixed and well know, expenses are capped. ROI simple to understand and calculate

Source: Gartner, Feb, 2005

What Our Market Research Tells Us

Primary research done in 13 countries in EMEA• Belgium, Czech Republic, Denmark, France, Germany, Israel,

Italy, Norway, Netherlands, Russia, South Africa, Sweden, UK

Focus on • Opportunity: how many SMBs are willing to pay what price – Who are the “Best Candidates”?• Buying Drivers: Why would they buy – or be interested

Key Results• Typically 10% - 15% of all SMBs are willing to pay up to EUR 15 (or equivalent) for a Hosted Exchange Business Email and purchase < 1 year• About 50% of the overall, long term, opportunity• Key reasons for buying Hosted Exchange Business Email

• Mobility, Collaboration, Security and Cost

Sample Research – United Kingdom

• Best Candidates: Willing to pay 15 £ and would consider adopting within 12 months.

• Short-Term Opportunity: Willing to pay 7.50 £ or more and consider adopting within 12 months.

• Mid-Term Opportunity: Willing to pay 7.50 £ or more and consider adopting in a 12-24 months time frame.

• Long-Term Opportunity: Willing to pay 7.50 £ or more and consider adopting in a time frame > 24 months.

• Additional Potential Opportunity: Would consider adopting at a very low price (2.50 £)

• Non-Candidates: Did not indicate a willingness to adopt.

• 52% (633k companies; 2.5m Mailboxes) of UK SMB Companies is the overall opportunity over the next three to four years

Sample size: 4502 companies with 1 or more employees

Hosted Exchange Key SMB Buying Drivers

Anywhere Access

•Mobility and Remote Access Needs•Mobility•Work from Home•Employees in Home or Branch Office•Device Related Synchronization•E-mail while traveling•Mobile push email

Get More Done

•Collaboration Needs•Better ways to share and track documents•Work together effectively •Check, Share Calendars•Share Ad-hock company information•Share Customer Information

Peace of Mind

•Operational Efficiency Needs•Off-Site Back-Up•Lower TCO•Predictable costs, no large up front investment•Threat Protection•Quality and Availability of Tech Support•High Availability

“Best candidates” have multiple needs.

SELLING BUSINESS EMAIL

Target Markets

Size Channels Key Messages

Buyer Bundling

Lower SB

1-5 PC

Web TelesalesRetail (?)

•Anywhere Access•Features

•Business •Owner

Mobile +Broadband

Core SB

6-49 PC

WebTelesalesIndirect

•Collaboration•Get More Done•Cost

•Business and/or •Technical Decision •maker

Business Broadband

MM 50-500 PC

WebDirectIndirectVertical

•Peace of Mind•Integration•Management•Cost

•Technical •Decision Maker

Outsourcing

Companies with Windows Mobile users are significantly more likely to purchase Hosted Exchange Business Email

How to Sell Hosted Business Email

Small Business (1-24 PCs)

• Online• Telesales• Small Business Specialists (resellers)

Midmarket (25-500 PCs)

• Direct Sales (compensation)• Indirect Sales – reseller partners

Bundling

Up Sell

Priv

ate/

Whi

te

Labe

l

Monetizing the Up Sell Opportunity

Providers programmatically driving POP to Business email campaigns

• Migrate all users on HMC/Hosted Exchange• Give all users 2 month free Business Email trial• Use the 2 months to ensure new features are actively used

• 80%+ of active trial users buy Business Email• Overall >20% up sell conversion is benchmark (10% is baseline)

Case Study: http://www.microsoft.com/casestudies/casestudy.aspx?casestudyid=201366

Why Bundling Business Email?

Price advantage easier to buy for end customers• Cross subsidizing

Leverage the customer’s compelling buying event

• Mobile email device purchase• Business broadband connection purchase• Web hosting package• Managed desktop, etc

Leverage existing sales channel • For the target segment• Broadband and mobility call center• Direct and indirect sales channels

Very Intereste

d32%

Somewhat Interested

41%

Not In-terested

27%

Interest in Working with a Microsoft Hosting Service

Provider ( vs. Self Host or Other alternative)

Channels: Indirect Sales

• This is not an automatic. Hosting Partners will need to build effective programs that address their needs and concerns

We trust the Partners more than the large Corporate like (IBM, MS , HP ).

Believe we would have greater flexibility for more specialized solutions.

I can continue to maintain the client relationship and have the flexibility to meet special needs.

What do you see as the advantages to working with a

Microsoft Hosting Service Provider?Can free us up to work on more strategic

projects for our customers.

A new set of services that can have a significant and noticeable impact on the productivity of our customers.

Indirect Channels: Summary

18

• 10s of Thousands World Wide• Total of 450 SI and Reseller partners in

Israel. 1600 overall.How many Interested?

• Evolving Computer Paradigm: S+S -(although many do not articulate as such) -

• Extends their role as Trusted AdvisorWhy are they Interested?

• Trusted Advisors who either are Generalists, Managed Services Providers or Web VAPS

Who is most interested?

• More business and more - new- customers

• Extend Sales Opportunity – Verticals, etc

• Allows focus on other, potentially more profitable, less costly services

What is the benefit to the Solution

Provider?

Channels: Online

An effective online presence and marketing capability is absolutely essential

• In the Lower SB especially • Search Try Buy

• £30 billion of offline spending is informed by information or marketing found online. (IMRG 2006) • 90% of IMRG survey respondents say they have researched goods online before buying them offline. (IMRG 2006)

Even if you do not SELL much online, a large and increasing part of the customer’s buying journey takes place online• They may purchase through your call center after

their last question has been answered professionally

Web Marketing DO’s and DON’T’s

•Test and iteratively refine you landing pages and Web marketing campaigns (add words, DM, etc)•A/B testing •Test different messaging – on different segments•Anywhere Access, Get More Done, Peace of Mind

•Test your online ordering process extensively from a customer user experience perspective•Measure the “leakage” in your online ordering and qualification process

DO

LOOKING BEYOND BUSINESS EMAIL

Up Selling Does Not Stop Here…

Platform for Growth and Up Sell• Over half of all Hosted Exchange customers

plan to add at least one additional service– 30% will add two or more

Hosted ISVs

Hosted

Unified Communications

Additional Hosted Services SMBs are Likely to Consider Within Next 12 Months

Likeliness to Consider Additional Hosted Services in Next 12 Months

36%

23% 25% 22%16% 18%

29%

11% 6% 9%

8% 7%

0%

10%

20%

30%

40%

50%

60%

70%

Voice over IP Hosted CustomerRelationshipManagement

InstantMessaging

Private webareas with

advanced toolsfor collaboration

amongstemployees and

business partners

Hosted GeneralAccounting or

ERP

Hosted SalesForce

Automation

Somewhat Likely to consider Very Likely to consider

Sample size: 904

Percents do not add to 100 because respondent could select more than one

• Nordic Hosted Messaging and Collaboration Study, Edge Strategies, March 2005

Looking Beyond Business Email – Windows SharePoint

Business Function Description % SMBs High Need

Project management Coordinate schedules, tasks, and documents internally and externally

39%

Problem Resolution Assign responsibility, track progress, and resolve problems 35%“Lightweight” (CRM) Share and update information on customer accounts,

contacts, and sales28%

Centralized Document Management

Coordinate updating and distribution of company documents, lists, policies, and procedures

26%

Departmental Portals Access to department-specific information, regardless of location

22%

24% Actively interested

Of all SMBS 5.4% Best candidates• W

illing to pay US$10 per user per month and adopt within 12 month

Source: Edge Research

Industry or Vertical % of Best Candidates

Professional Services 20%

Finance, Real Estate, and Insurance (FIRE) 16%

Construction 16%Business Services 11%Consumer Services 8%Healthcare 7%

Source: Gartner Research and Microsoft Estimates

(Hosted) CRM Market Size

Overall CRM Market: 7% Annual Growth

Hosted CRM: 34% Annual Growth

With 100% year over year growth, industry analysts have declared that Microsoft Dynamics CRM is the fastest growing CRM software in the world. Growth

Microsoft’s Hosted Solutions are Mobile Ready

Hosted Exchange

•Professional Email + Mobile Push

Hosted SharePoint

•Intranet/Extranet + Web 2.0 Business Apps

Hosted CRM

•Mobile business applications

Hosted Unified Communications

•Hosted Office Communication Server

HELPING PARTNERS SUCCEED

Microsoft’s Investment in Our Hosting Partners

• Market research• Partner ecosystem development• TAP Programs• ADS - Architecture & Design Session• BDS – Business Development Session• Sales Training• Sales and Marketing Toolkit• End User Training• Go-To-Market Support• Premier Support

SUMMARY AND CALL TO ACTION

Summary and Call to Action

We are just scratching the surface of the Hosted Exchange Business Email opportunity• We need your help to fully leverage it!

Key growth drivers in your existing customer base are:• Up-sell, cross-sell and bundling

Entering new market and acquiring new customers:• Resellers create scale and access to new markets and customers• Online marketing is crucial – this is where your customers “live”

Business email can be just the first step in becoming a more important provider for your customers• Up sell to MS CRM, SharePoint, Live Meeting, Windows Mobile, etc

THE OPPORTUNITY IS THERETOGETHER WE CAN SEIZE IT!

THANK YOU!

BACKUP

Business Development Session

Agenda Day 1 Agenda Day 2

Introductions & Background Discussion

Recap of Day 1 and Business Objectives

Market Opportunity& Market Segmentation

Lead Generation

Product Positioning, Packaging and Pricing

Direct Sales

Competitive Positioning

Selling Through Channels

Going to Market Review of Action Items

Day 1 Wrap-Up Wrap-Up and Next Steps

• Overview and Objectives

• Microsoft– Better understand your

needs as service provider

– Increase depth and value of relationship

• Service Provider– Look critically at go-to-

market plans– Determine best

possible offers– Execute with practical

tools & approaches

Hosted Exchange + SharePoint Sales Toolkit

Hosted Exchange Flash Demo

SharePoint Flash Demo

Industry Campaigns

Ready made campaigns “in a box” for you to execute

• Law firms• Consultancies• Financial advisors (FS)• Architectural & engineering (A&E)• Accounting• Real estate (RE)

Industries/Verticals Available Now

Bill of MaterialsExecution PlaybookBattlecardPains sheetWeb texte-FlyerData sheetDirect mail flyer

NEW - HMC Sales Toolkit v2

• Table of contents– 8 Key Success Factors– Core Sales Materials– Telesales– Email Marketing– Exchange Hosted Services– Online Best Practices– Upsell Best Practices– Sales Training– Needs Analysis– TCD-TCO Tools

• Supported Languages– V1: 11 languages– V2: English only today.

Localization planned (FY08).

What’s New and Improved?• MAPI Up Sell Best Practices

– Guidance on running an effective MAPI campaign.

• Business Email Sales Training– Trainer’s guide and training decks

• Online best practices– Guidance on how to promote and

sell HMC online. • Key Success Factors in selling HMC• Greatly improved instruction for

deployment and online examples of – Total Cost of Ownership calculator, – Cost of Downtime calculator – Needs Assessment Tool– http://tools.muralconsulting.com/

• Exchange Hosted Service Toolkit– To help partners resell EHS.

Additional Up Sell Opportunities Push Mail• 15% of SMBs “Best

Candidates” for HMC 24% if a decision influencer uses Windows Mobile

• 42% of Windows Mobile users would pay for push mail

• Very quick time to market – little up front investment

• US$20 per user per month revenue opportunity US$7 margin

• Basic and higher end

email security services • No up-front investments,

rapid deployment

• Offering multiple services/solution for segments/verticals

• Minimal incremental costs• ‘Viral’ selling