Successful Cloud Partners 2.0: What Successful Partners are Doing to Build Profitable Cloud Businesses Microsoft Cloud Summit, Fall 2014 Marilyn Carr,

Successful Cloud Partners 2.0: What Successful Partners are Doing to Build

Profitable Cloud BusinessesMicrosoft Cloud Summit , Fall 2014

Marilyn Carr, Partnering and Alliances Research

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2013 IDC Report – It Can Be Done 2014 IDC Report – How? WW Survey with over 700 respondents 20 in-depth interviews

http://aka.ms/idccloudebook

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Agenda

Planning for your cloud business Cloud business strategies Cloud sales strategies Marketing for the cloud Managing and measuring Essential guidance

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Successful Cloud Partner Practices

Planning for Your Cloud Business

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Consider Your Cloud Plan • You’re probably not behind… yet. • But you are losing deals to

Born in the Cloud and other partners

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We have effective solutions where we serve business applications to mobile devices through SharePoint online or through Azure where SharePoint is a tenant. Then we are exercising three Profit Pools at once with Cloud as our leverage point.Emily Lynch, VP Marketing, Catapult Systems

Understand your profit pools • What do you make the most money on now?• What impact could cloud have?

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Is it time for a management offsite?

• Key decisions must come from the top• Helpful to get outside help to facilitate

Cloud has transformed our business but if you don’t have a plan and you haven’t communicated it, how the heck are you going to get everybody there? Connor Callanan, CEO , Core

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Your Cloud Business Strategy

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Build Your Recurring Revenue – The New Killer Metric• Offers predictability, cash flow, and positive impact on company

valuation

Like every ISV in the world you want to be seen as a SaaS company to Wall Street eventually.Brian Cook, Executive Chairman, Nintex

The Recurring Revenue Trough

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TodayPast Future

Revenue Revenue Shift + Investment

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Recurring Revenue: Long Term Appeal

Revenue from customers signed in year 1





Today Future

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Recurring Revenue: Predictability

Past Future

Revenue

Traditional Project Services Model Cloud or Managed Services Model

Having recurring revenue on a cloud service model has been gold for us because it flattens out the peaks and valleys of revenue. Jonathan Voight, CEO Agility

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Recurring Revenue: And not Or?

TodayPast Future

Revenue

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Go Big Or Go Small. You Can’t Do Both• SMB = volume• Enterprise = depth

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You May Not Have To Change Everything • Selling services to enterprise customers may not change too much.

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Use Cloud Internally And Share Your Own Best Practices

• Gain powerful credibility with customers by using the products you are selling

• Become your own best customer success story

We are using a lot of business intelligence internally to drive how we make business decisions faster. It is not difficult to transition this from an internal focus to an external offering as the decision making improvements we have made through the use of smart technology resonates with all commercial businesses. Mark Williams, Partners & Alliances Director, Wavex

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You Only Have To Stay One Step Ahead • Cloud technology is evolving rapidly • Successful partners stay one or two steps ahead of the customer

and competitors to be a leader• Create a plan to keep on top of key developments in the solution

areas where you focus

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Differentiate With Domain Expertise To Increase Profit • Cloud can commoditize you must differentiate• By business process (e.g. accounting) or by industry vertical (e.g.

retail).

Our presales technical guys and our architects that are working with the customers to implement our software: 100% we have hired from the industry. Isa Qureshi, EVP, Client Services, QLogitek

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Your Cloud Sales Strategy

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Understand Why Cloud Sales Are Fundamentally Different • Past: Get to the sale • Now: The sale is the beginning

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Open Doors With Cloud, Then Up-sell • Get in the door with Cloud • Up-sell over the long term relationship

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Choose the Right Sales Structure For You • Separate or Integrated? • Solve for Internal Conflict or Customer Choice?


Separate Cloud Group Integrated Group


Carefully Architect Your Sales Compensation• Problem: How to motivate salespeople who were used to selling up

front license + services deals? • If affordable, pay up front

We changed the bonus triggers for our salespeople that they get more percentage on the SaaS sales than they do from on-prem. And they also have to sell a certain percentage of SaaS in order to even get the on-prem bonus. Anonymous, ISV

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Consider Hiring Outside The Box• Hire young • Hire for value • Cloud partners have more staff in sales

and marketing vs. other partners

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Create A Lean, Mean Operating Model For Volume • For a volume play, impetus must be on efficiency• Minimize the cost of making the sale

Consider Telesales To Increase Your Reach • Telesales can be a cost effective strategy, • Different skill • Metrics driven

The top sales people, like Charlie, are

making 50 to 100 calls per day. The

sales cycle is a few days and

implementation is a matter of weeks. The

focus is on high-volume.

Ben Gower, Managing Director, Perspicuity

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Take Customers To The Cloud In Steps • Many customers are still not ready to fully dive in • Certain products are good for the first sale, some better to up-sell

Once customers realize they can iterate and improve the Azure solution quickly and easily and relatively inexpensively - they go wild. There are no boundaries. The amount of overhead it takes for us to roll out a new set of changes is minuscule, it’s almost nothing.

Alex Brown, CEO, 10th Magnitude

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Speed Up the Sales Cycle by Sidelining Cloud Objections

• Arm your telesales team with resources to take FUD questions off-line

• One-page FAQs, videos, web sites, etc.

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Your Cloud Marketing Strategy

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Shift Your Marketing To Digital • Successful cloud partners are investing in digital marketing• SEO, pay-per-click, banners, videos, webinars, blogs, social media, iterative web

pages and landing pages, etc.

We have a film crew and editing company that does Youtube videos for us. Obviously our goal is to always try to differentiate ourselves.” Brian Cook, Executive Chairman, Nintex

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Establish Your Brand With Thought Leadership • Get known as a thought leader• Some partners provide incentives for staff to publish

We do a lot of bylined articles. I had a bylined article in ‘Wired’ a little while ago, and we just had one in ‘Chain Store Age’ magazine. We typically, I would say once a month, we have some thought leadership piece out there. It continues to build presence and awareness and it drives some inbound traffic. Alex Brown, CEO,10th Magnitude

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Managing and measuring

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Focus on new customers, but also renewals • It is critical to keep existing customers happy• Not as easy as it sounds

One of the things that we hadn’t intended on doing which was then a real success for us is the contact center. When we bring someone onto Office 365, the day they go live they have a 1-800 number. Stephen Alderman, Chief Technical Officer, InverseCurve

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Manage Using New Key Performance Indicators (KPIs)

• Monthly Recurring Revenue (MRR) • Recurring Revenue %• Churn % • Lifetime Customer Value

We have a monthly recurring revenue number that we want to hit. That’s the only metric we actually present back to our staff. And that number is on the wall. If we hit our target, we fly 40 people to Las Vegas in October.Chris Day, CEO, Fully Managed

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Essential Guidance

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Essential Guidance There are many paths to Cloud success. Common elements of success

include:

Recurring revenue models are slowly but surely replacing traditional project and transactional based models.

Most partners will have to endure some short term pain in order to achieve long term success, which could include higher margins and a higher company valuation.

Those who master a specific vertical or horizontal domain will be able to speak the language of the new power broker in the enterprise, the Line of Business executive.

The time to act is now. There is a land grab going on for cloud customers and there’s not much time left before you find yourself in the bottom half of cloud partners.

Successful Cloud Partners 2.0: What Successful Partners are Doing to Build

Profitable Cloud BusinessesMicrosoft Cloud Summit , Fall 2014

Marilyn Carr, Partnering and Alliances Research

Documents

Successful Cloud Partners 2.0: What Successful Partners are Doing to Build Profitable Cloud Businesses Microsoft Cloud Summit, Fall 2014 Marilyn Carr,