Thanks to• Diamond Sponsors

• Gold Sponsors

Microsoft Dynamics Partner Academy

Transitioning to the CloudAn introduction

Introducing Partner Master Class

• Recognised worldwide as a top PDC

• All personnel have built partners from scratch

• Live and breath your business pains

• Wide range of experience in all areas

• Proven success in multiple countries across Europe

• Top class coaches

Guus Krabbenborg• Guus has been co-founder of DBS Business Solutions in 1994. When he left in 1999 DBS has grown to 120 employees

• Guus has been commercial director at Navision NL and started in 2000 his own company TerDege

• Since 2000 Guus has specialized in supporting Dynamics partners. He delivers trainings and workshops in many places around the world

• Guus also executes workshops for companies looking for new ERP or CRM solutions

• Finally Guus writes books, columns and a well-known newsletter for partners

Microsoft Dynamics Partner Acadamy

Partner Developer/Architect

Partner MarketingSpecialist

Partner Sales

Specialist

Partner Project

Manager

Partner Application Consultant Partner

PresalesSpecialist

Partner Technolog

yAcademy

Partner MarketingAcademy

Partner Sales

Academy

Partner Project

ManagementAcademy

Partner SolutionAcademy Partner

PresalesAcademy

Microsoft DynamicsPartner Academy

DEVELOPER

LEADERSHIPROLEMARKETINGROLE

SALESROLE

PRESALES ROLEPROJECTMANAGER

CONSULTANT

CPLS

PDC

Some reflections….

• You don’t have to be ill to become better…

• Life’s to short to make all possible mistakes yourself!

• It’s not about what you know, but what you do with what you know…..

Resellers OnlyHigh Low Average

Annual Income $17,525,615 $1,468,614 $6,299,106EBITDA % 20.5% -4.5% 5.8%Services/Software Ratio 15.0 0.6 2.2Software Gross Margin 47% 12% 31%Services Gross Margin 64% 14% 42%Other Operating Expenses % of Revenue 47% 17% 33%Days Sales Outstanding 123 0 41Days Payables Outstanding 117 0 41Average Annual Hours Billed, per billable resource 1,565 559 1,088Average Annual Cost, per billable resource $159,602 $56,185 $97,538Average Hourly Charge-out Rate, per billable resource $193 $110 $154Realized BMUR 2.7 1.1 1.7Total New Customer Adds (last 12 months) 62 4 18

Revenue/Employee $294,118 $110,839 $193,890

Average New Deal Size $366,804 $37,859 $105,578Revenue/Salesperson $5,394,172 $558,191 $1,427,604Marketing Expenses % of Revenue 8.3% 0.1% 1.6%Sales Costs % of Revenue 19.3% 4.5% 9.4%

Partner KPI’s, September 2010

Source: Salesworks Partner Data Base

Microsoft Dynamics Partner Academy

What is Cloud Computing and what do others think?

Why…

Cloud Computing

What…Applications delivered as services that are always available, scale as required, provisioned just-in-time, run on shared industry-standard hardware, and are billed on a pay as you consume basis

Accelerates speed to solution, lowers TCO, and allows for more budget to be allocated to innovation vs. maintenance

Defining Cloud Computing

On-PremisesBuy my own

hardware, and manage my own data

center

• Buy own machines, connectivity, software, etc.

• Upfront capital costs for the infrastructure

• Complete control and responsibility

HostedPay someone to host my application using

hardware that I specify

• Rent machines, connectivity, software

• Lower capital costs, but pay for fixed capacity, even if idle

• Less control, but fewer responsibilities

• Pay-as-you-go• Shared, multi-

tenant environment• Offers pool of

computing resources, abstracted from infrastructure

Cloud Pay someone for a pool of computing resources that can

be applied to a set of applications

Clarity around the options

Cloud Computing

• All developers can quickly deliver highly available, secure,and infinitely-scalable applications

• Rich end-user experience anywhere from any deviceApp

Model

• Mainframe of the future: 1000× as powerful at a fraction of the cost

• Maximum efficiency on industry-standard hardware

• Your datacenter or ours

Hardware

Model

• Resilient to hardware and software failure• 24×7 availability with “9 to 5” management• “Restart, reboot, reimage, replace”

Operations

Model

10X-40X more efficient

10X-40X faster to market

10X-40X cheaper to operate

* Microsoft whitepaper

The platform for the new generation of business

Source: Microsoft white paper: “Economics of the Cloud,” - www.microsoft.com/presspass/presskits/cloud/docs/The-Economics-of-the-Cloud.pdf 

What Customers are Expecting

A reduction in both capital (CapEx) and operating (OpEx) expenses

• Pay only for what you use

• Do-it-yourself mentality – less appetite for services Lower total cost of ownership• No maintenance or enhancement• Less hardware, fewer technicians, etc.

Simplified software management

What Customers are Expecting

Vertically-specific applications• Out-of-the-box functionality – Instant on• Add on apps and functions when needed

Flexibility• Use 1,000 computers for one hour

– BOM, MRP, ECO, simulations• Scalability

Time to value• Speed to implementation• Speed to market

In CRM

100% of the deals in the partners’ pipelines have one or more cloud based CRM competitors.

In ERP

Based on Region• Eastern region averaging about 30%• Central region averaging 25%• West region averaging about 35%

In some geographies, as many as 50% of potential ERP prospects are enquiring about Cloud-based options now!

The Partner Experience – North America

Cloud Leadership Program

Early Entrants, Early Lessons

1. Shifts Happen

Cloud Impact

Customer ScenarioTier 2 ERP Multi X Vertical Buyer Business-in-a-Box

Some core business applications, work streams, and infrastructure move to the cloud to reduce costs, but a high need remains for customization and complex integration. Traditional services business almost completely preserved.

Strong preference for cloud-based core business applications to be accessible on a subscription basis, supplemented by add-ons and customization to meet the specific needs of the business. Traditional services business somewhat preserved.

Complete, vertically- specific cloud-based solutions demanded, accessible for a single monthly fee. Strong resistance to up-front fees (other than justified as a migration cost to a subscription model), and almost no demand for customization whatsoever. Traditional services business severely reduced.

Basic GLAPR cloud-based solutions demanded, accessible for a single monthly fee. No room for up-front fees (other than justified as a migration cost to a subscription model), and no demand for customization whatsoever. Traditional services business virtually eliminated.

Change in

Business

25–30 % 35–50 % > 50 % > 65 %

Dem

and

Shift

Services/Software Ratios

NetSuite Salesforce.com Average Microsoft Dynamics VAR

0.18 0.08

2.17

Composition of Services

On-Premises Cloud0

20

40

60

80

100

120

140

160

Executive TrainingWorkstation SetupServer ConfigurationData ConversionReportingUser and Super User TrainingApplication Setup and Configuration

Hour

s

Sales Impacts

On-Premises Cloud0

20

40

60

80

100

120

CloseProofSolu-tionDe-velop

Hour

s

On-Premises

Cloud

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%100%

Telemarketing (Ex-ternal)High Impact Direct MailPostcard Direct MailLetter Direct MailExec BriefingsPhone Follow-up (In-ternal)WebinarsEmail Nurture Market-ingSearch Engine Op-timizationPay-per-Click Campaigns

Traditional

OnlineTraditional

Marketing Impacts

Online

Impact of Cloud on your People – Changing Mindsets

SALES

• S+S• Speed to Close

• Subscription-based

• Solutions Focused

• Compensation

ARCHITECTS

• Business Skills

• New Architectures

• Governance Models

CONSULTANTS

• Fixed price SOW

• Deployment Included in Subscription Fees

• Compensation• Fast and Cheap Implementation

MARKETING

• Web-centric• Social Media• New and Exiting Customers

DEVELOPERS

• Focus on Service vs. App

• Focus on Scaled Design

• New Tools and Services

• New Operational Models

Packaging

Sticky Customer EnvironmentManaging Churn

Churn Management

For a Partner it is about• Planning and executing cross-sell strategies

– The more products and services subscribed to, the harder it is to leave • Knowing when they are likely to fall off

– End of trial, end of contract• Making it easy to stay

– Evergreen services

Thanks to• Diamond Sponsors

• Gold Sponsors

Cloud Leadership Program

Customer Acquisition

First Fact of Cloud Marketing

The Cloud is a volume game• Significantly more new customer adds are required due to lower

upfront revenue collection• Lower cost per prospect acquisition• This is not a matter of “tweaking”, Cloud requires a significantly

different marketing approach

Second Fact of Cloud Marketing

The “online” customer expects to find and buy from you online

A viable long term business model depends on• Marketing costs lower than for “on premise” solutions• High prospect quality, using some form of “lead scoring”• An effective and efficient online demand generation engine

Microsoft Dynamics Best in Class

On-Premises Cloud

$11,500

$3,100

$5,200

$3,200

Marketing CostsSales Costs

Cust

omer

acq

uisi

tion

cos

t

Cloud Leadership Program

Sell in Waves - Sales Leadership

Who Are The Buyers

Business People: Owners/LOB Managers

Focused on business functionality/processes/rationale

Looking for Ease and Speed• Easy to Buy• Easy to Pay for• Easy to Scale (up and down)

Require limited education

Want to buy rather than be sold to

EXPECT industry specific capabilities with limited configuration

Buying Criteria Changes

On Premise:• Functional fit• Price• ROI/Payback• Risk (scope/budget)• Flexibility/Configurability• Relationship/Experience• Product flexibility

SaaS:• Speed to Value• Economics

• (Capex vs. Opex)• TCO

• Industry configuration• Business flexibility• Risk (data/security)

Cloud Leadership Program

Selling In The Cloud

Selling in the Cloud

Significantly different from traditional “F2F” sales approach

Different experience for both Buyers and Sellers

Different cost and compensation models

Significantly shorter sales cycle

Entire sales process executed remotely

Not relevant for all businesses

More than just a deployment option – strategic differentiation

Solution factory mindset (sales, configuration, implementation)

Buying in the Cloud – Make it Easy

To be found• (SEO, PPC)

To differentiate• Vertical or Value Chain Solution Sets

To sell/close• Hard-wired sales processes• Clearly communicated buying process• Compliance/CRM/Reporting• Firm management oversight

For business decision makers (BDMs) to say yes• TCO/ROI analysis• Risk reduction

Overall Predictions affecting Partners in the Cloud

1. Customers will be pre-disposed to buying directly from SaaS vendors or partners that offer vertical or value chain solutions.

2. Cloud offerings will favour a business centric buying approach, challenging partners current sales operations

3. The pricing model of selling a license and a bundle of services will shift dramatically to a pay as you go model.

4. Fewer service professionals will be required in the deployment and maintenance of cloud solutions.

Overall Predictions affecting Partners in the Cloud

6. Systems integrations (applications, servers, systems) will become part of the overall offering in PaaS reducing demand for systems integration.

7. SaaS customer adoption will negatively impact hosting operations

8. The importance of proximity to customer will be dramatically reduced and replaced by homeshoring, nearshoring or offshoring

Time Horizon

Transition Stages

Transition Timelines

Year 1 Transition Plan

Year 1 Transition Plan

Transitioning to the Cloud

Think 180 degrees from where your business is today• This is a volume-based sales and marketing game; a utility – not a

services play

Think about investment capital requirements• Whether internally or externally sourced, or both

Transitioning to the Cloud

The transition to the Cloud is like starting a new business unit• It is not like adding a service line (Microsoft Dynamics CRM,

Microsoft Dynamics AX)

Think new people• You will be a hybrid for a period of time• Must remain profitable to reach the inflection point

Think change management• People need to make the transition

Workshop ‘Cloud Transformation’

- Partner Master Class delivers workshops ‘Cloud transformation’ for NL/B in Breda (NL)

- 2 Days- Focussed on ‘awareness’

- Next session on December 13-14, 2011

- Then in the first week of March 2012

Questions?

Thanks for your attention!

Guus Krabbenborggk@partnermasterclass.com www.partnermasterclass.com +31 622 496 073

Thanks to• Diamond Sponsors

• Gold Sponsors