Cloud Champion - Week 3: Eye on the Opportunity

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Information about Cloud Champion - Week 3: Eye on the Opportunity

Published on March 20, 2014

Author: chlong



This is round three of our Cloud Champion course, focusing on Cloud Profitability. We have interviewed hundreds of successful cloud partners from across the globe and have shared their insights in this deck.

Cloud Champion is Microsoft Australia's 12-week step-by-step program to help our partners be successful with selling Cloud solutions. For more information on the course, please visit

Eye on the Opportunity Brent Combest Director, Cloud Sales Small and Midsize Business Group

Strong Demand Comparing Vendors Cloud Momentum by the Numbers Tremendous Potential Worldwide Cloud Market* 2017 $108B 994k 215k H1 FY14 Trials 5x The IT Industry growth rate Asia-Pacific contribution 20% 42% Asia-Pacific CAGR 50,000 Partners in FY14 Will surpass On- Premise Units Sept 2014 FY16 SMB Aspiration for revenue distribution (cloud vs. on-premise)50% Of the most popular workloads are covered by Office 365 & Azure**70% 24% 15% 12% 11% 8% Productivity BDR Website App Host Content *Source: IDC **Source: Spiceworks, 2014 26% 31% 35% 128% APAC

Primary Customer Drivers

Partner Evolution: Building the Snowball $143B 2013 2018 Managed Services Market Growth (Markets & Markets, 2013) $256B 5…29% 9% 9%U.S. Office 365 Partner Models *Based a survey done of 9,575 U.S. SMB Office 365 Resellers SBSC ISV VAR MSP

Cloud Partners Outperform Peers

*Source: Forrester: Market Overview, Managed Service Providers, Part 2 May 2013 Valuation Multiples* (X of EBITDA) What attracts a premium price* Variable Before Revenue $5M EBITDA 8% Operating Income $400k Valuation Multiple 2.25 Price $900k After $8.45M 12% $1.01M 6 $6.59M The Reward is on the Horizon

The Five Keys of Successful Partners Build Own Annuity Multi-Workload Volume Sales Web Centric Marketing High Services Margins

Building The Annuity  Infrastructure Monitoring  Exchange Configuration  SharePoint Set-Up  Lync Set-Up  Front Line Support  User Training  Software Asset Management  Remote Monitoring  Managed Security  Patch Management  Policy Management  Desktop Management  Diagnostic Reports $38k 44% Office Standard vs. Office 365 - Midsize Business: 50 Seats

Multiple Workloads $5  Service Monitoring  Exchange Configuration  SharePoint Set-Up  Lync Set-Up  Front Line Support  User Training  SharePoint Templates $52  SAM  Remote Monitoring  Managed Security  Patch Management  Policy Management  Desktop Management  Diagnostic Reports  Network Monitoring $167  Custom Apps  Website Management  Identity Management  Backup & Disaster Recovery  Media Hosting  Big Data  Small Apps  3rd Party Tool Connectors  Vertical IP  Business Function Solutions $55

Volume Sales A New Type Incent on Volume Higher Rate on Your Annuity Monthly Commissions Qualify Week 1 Proof Week 2 Proof Week 3 Close Week 4  BANT Criteria  5 Pivotal Questions  SKU Selection  SKU Review  Feature Overview  Trial Maximization  IT Review  Deployment Planning  SOW Development  SOW Sign-Off  Onboarding Review  Scheduling  Prevent laziness  Focus on acquisition  Renewal Rep @11 mo’s  A Deal Per Week  Accelerated Process  Minimum Thresholds Variable Paid on Year 1  Attach to every deal  Yours = higher margin  CI = 5-7% of Revenue  Treated as Income  Raise Comfort Zone  Normalize Revenue Of Sales Rep

Attracting a Web Centric Buyer Attract of Gross Revenue  SEO  Pay-Per-Click  Blogging  Back-linking  E-mail Campaigns  Vendor/Influencer Educate  Short Videos  Whitepapers  Customer Videos  Case Studies  Customer Training Assets Nurture  Monthly Nurture Assets  Nurture Engine Execution  Retention Assets 50% 35% 15%

Project Activity Hours Sales, Assessment, and SOW 4 Hoster/Registrar Discovery 2 Mailbox / Alias / DG Discovery 2 Email Architecture Planning 6 Office 365 Account/User Provisioning 4 Client-side (POP/IMAP) migration / PC 1 per PC Server-Side Migration, QA 8 DNS Changes, QA 1 Project Management 3 Company/End-User Comms 4 Outlook Setup 6 Total ~40 Gross Services Margin Sell More No delay due to resource availability Increase Margins Automation creates efficiency and fixed cost No Surprises Keep scope creep out and customers happy Incremental Value More than just an automation tool High Margin Services

Differentiation Maximizes Profit Higher Price Point Influencer Advocacy Maximum ARPU Marketing ROI Sales Efficiency Service Margin+ Subject matter expertise adds value to services and solution recommendation, justifying high cost. Domain expertise builds trust and enables additional offerings to be sold. Proven capabilities can establish stamp of approval from those target customers trust. Increased focus in audience improves message strength and campaign results. Repetition in process and pitch improves win rates and requires lower cost resources. Consistency increases efficiency and reduces the dependency on high cost technical staff.

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