How do you successfully transition your traditional on-premise business model to the Cloud?
Are you all in or still thinking about it?
Maybe you've dipped your toe?
There is no doubt that one of the main challenges facing Partners today is Cloud, and exactly what to do about it. Not just from a technical perspective, but even more so as a shift that demands a change of business model and a change in thinking.
One of the challenges is how do you manage your customers, partners and employees through the transition? Do it wrong and it could spell disaster.
Do it right and you could secure the future of your business. Learn actionable tactics and strategies from internationally renowned SaaS and Cloud expert with a VAR background who works for one of Europe's largest and fastest growing SaaS companies and has helped hundreds of Partners with their transition to the Cloud.
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I love being thrown in the lions den- being a SaaS specialist- I sit at the top of the food chain… So I’m probably quite delicious fodder for you datacenter guys
Need analogy
There has been so much talk about Cloud over the past few days
I don’t want to hear any more about cloud!
The good news is that datacentres aren’t going away- it’s just getting a whole lot more interesting
Over the next hour I want to dig beneath the hype to the real reasons for going cloud- from the business perspective and not the DC perspective…
Because that’s what’s really driving cloud
So- who’s using it?
So- who’s using it?
So- who’s using it?
So- who’s using it?
So- who’s using it?
You’ve got to understand the cloudonomics
Because that defines when you should use Private Cloud- assuming no security risk
And when to use hybrid cloud
From the Mimecast Cloud Adoption Survey http://www.mimecast.com/events-press/press-releases/article/view/cloud-computing-delivering-on-its-promise-but-doubts-still-hold-back-adoption/462/
From the Mimecast Cloud Adoption Survey http://www.mimecast.com/events-press/press-releases/article/view/cloud-computing-delivering-on-its-promise-but-doubts-still-hold-back-adoption/462/
From the Mimecast Cloud Adoption Survey http://www.mimecast.com/events-press/press-releases/article/view/cloud-computing-delivering-on-its-promise-but-doubts-still-hold-back-adoption/462/
From the Mimecast Cloud Adoption Survey http://www.mimecast.com/events-press/press-releases/article/view/cloud-computing-delivering-on-its-promise-but-doubts-still-hold-back-adoption/462/
2010 Gartner Hype Cycle for emerging technologies
2010 Gartner Hype Cycle for emerging technologies
Let’s relate that back to the email market
We’re at approximately 4% adoption today according to Gartner
Rising to 10% at the end of 2012
And 30% by the end of 2015- a big shift
What’s the problem?
How did I get here to be presenting in front of you about building the case for cloud?
Not by first great western
Or my brompton
It was many years crawling under desks
And fixing issues running a medium sized value added reseller. A VAR
Oh and subscription businesses are worth 2-3x a services business.
Double edged sword
Cloud Represents a Perfect Storm for Channel partners
A shift from Capex
To Opex
A shift in focus
And a shift from a technology focus
To a business focus
So why is the cloud so scary for the channel?
The cloud offers a lot of what the Channel used to.
Disrupts the financial model
And the skills
We’ve seen this before in other industries
Like the travel business- how many people go into a travel agency to book holidays these days?
I can’t remember the last time I went to a travel agency- with kayak and comparison sites- I never go there.
If you do it’s because you want service- a package, a solution, personalised without any hassle
Although cloud adoption has been growing rapidly, it is still unclear where and how the channel can and will add value. Because of this, channel companies have been hesitant to invest, leaving end users with limited access to help when they need it.
I don’t want to hear any more about cloud!
2010 Gartner Hype Cycle for emerging technologies
The challenges facing enterprises building private cloud services or leveraging public cloud services are significantly more complicated than just the technology. Fundamental change is needed in culture, business models, IT architecture, service management and politics — all opportunity areas for the channel to provide business consulting, but very different from the channel's traditional role.
Greenfield sites
Business processes
Hybrid architectures
Mean professional services
Cloud readyness- tidy up the ecosystem
Carrot and stick
Any company that relies on the product transaction (hardware or software) to drive attached services revenue supported by ongoing maintenance contracts will have to rethink how and what it offers its customers today and in two or three years.
If traditional channel partners don't react quickly enough to the changes in the market, they will be replaced by other channel partners in their accounts.
More and more IT providers are attempting to go directly to end-user customers with their cloud solutions only to find out that customers need more than they are willing to provide. This will mean increasing channel capacity to meet demand.
The two biggest challenges facing IT providers today are the lack of capabilities contained in their current partner ecosystem and the lack of new entrants with the skills required to further the adoption of various cloud services. Without these capabilities, the entire market will have slower adoption, regardless of the service.
Cloud Pro Services in Europe today is $560 million in 2010
European Enterprises Will Spend $8.2 Billion on Cloud Professional Services in 2015
The new IT environments will have elements of traditional IT, private cloud, and public cloud, and management and integration will become a challenge for which European enterprises will typically choose to hire an external service provider, driving further growth in the cloud professional services market."
IDC sees a clear trend that new outsourcing contracts include cloud services, and as much as 25% of cloud professional services will be delivered as part of outsourcing contracts. This has a major influence on the choice of provider for professional services as well as for cloud services: the provider needs to be able to manage both the traditional and the new environment under one contract and needs to be able to migrate larger parts to the new environment during the life of the contract.
"Some believe that cloud is just plug and play, but that is not the case for the more complicated existing or new solutions. So professional services will not go away, but they will change and in the longer run beyond 2015 — when migration is complete — account for a much smaller proportion of IT costs.
"Another important point is that service providers need to prepare for the rapidly growing request for cloud professional services and have the resources available. Right now, demand is mainly for business cases and roadmaps, requiring both business competence and architectural competence, but on a limited scale. But in a just slightly longer time frame, most if not all consultants need to understand cloud. Vendors have substantial investments ahead of them in creating the necessary capabilities to support this rapidly evolving market."
So I think the Channel needs to embrace the Cloud
Or face irrelevance….
So what to do now?
The most important thing is to retain the status of the trusted advisor
Which means you need to be educating the customers, not them educating you
Cloud is an Evolution and a Revolution
So we can’t stay the same can we? Otherwise we could end up like King Canut trying to repel the tide. Obviously the channel needs to evolve
http://en.wikipedia.org/wiki/File:Cnut_the_Great_Obverse.jpg
Cloud Services Brokerage- where you aggregate Cloud Services and provide Solutions to your Clients
Through 2015, cloud service brokerage (CSB) will represent the single largest revenue growth opportunity in cloud computing. The channel has an opportunity to play a significant role in aggregation and brokerage services, yet few have begun to invest in becoming a CSB.
So this brokerage thing- let’s dig into that. Can you really start to make money from selling Cloud Services?
BPOS- year one: 400 seats = £29,629 with £5333 margin
400 seats Office 365 £31,200 with £5,616 margin
400 seats Office 365 with Mimecast £53,050 with £9,926 margin
Or 400 seats with Mimecast: £51,129 and £9,643 margin
400 seats Office 365 £31,200 with £1,890 margin
400 seats Office 365 with Mimecast £52,100 with £6,010 margin 318%
Or 400 seats with Mimecast: £51,129 and £9,643 margin
Eat your own dog food
Selling Support
And Services around cloud offerings
Cross sell other Cloud Services- don’t lose budget
Provide Due-Diligence to choose the right solutions
Bring Cloud to the Customer’s network safely and smoothly
Deliver On-ramp services, that enable customers to get to the cloud
That Leverage Cloud and On Prem – “Hybrid” I hate that term!
More focus on Business Consulting
– not “how IT”
but “Why IT”
Just because Customers could do it themselves
Doesn’t mean they will. It is not the end of the channel. It’s just going to be different
Most people haven’t got the time or inclination to do it themselves. No one would have cleaners or builders if they did it themselves.
How can you dip your toe in the water?
Cloud and Perpetual don’t mix well at all- like oil and water
Set up a new business unit focused on Cloud
Enable customers who want to move to the cloud to do so
Run your perpetual business like a cash cow
Leave the customers that are happy with the old model in there (Cloud isn’t secure)
Without cannibalising your existing business
Develop a subscription revenue stream.
So when the perpetual business does die- you can fold it into the subscription business
The economics of Cloud are hard. The best providers typically spend 1 years revenue to acquire a customer
You’ve got a head start
But trying too quickly to Cloud will lead to disaster- so Watch out
Oh and subscription businesses are worth 2-3x a services business.
Green?
Double edged sword
Cloud Represents a Perfect Storm for Channel partners
Oh and subscription businesses are worth 2-3x a services business.
The world is your oyster if you choose to adapt
The Secrets of Successful Cloud Adoption: what they don’t tell you
Cloud has a seemingly unstoppable momentum behind it- but is it clear at the outset what the benefits of Cloud are beyond the shift from cap-ex to op-ex? What exactly are these benefits and how do we access them to adopt Cloud successfully?
