Perficient Doubles Microsoft Cloud Revenues Yearly Since 2010; Boosts Trusted Advisor Status

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1 Perficient Doubles Microsoft Cloud Revenues Yearly Since 2010; Boosts Trusted Advisor Status Overview Partner: Perficient Partner Website: Partner Size: 2,300 employees Country or Region: United States Industry: Professional services We viewed cloud services like a train hurtling down a track. We needed to either jump on that train or get run over by it." David Greve, National Microsoft Cloud Strategy Director, Perficient Customer Profile Perficient, based in St. Louis, Missouri, is an information technology and management consulting firm serving Global 2000 and enterprise customers from offices throughout North America and delivery centers in Eastern Europe, India, and China. Business Situation By 2008, Perficient had become a major systems integrator with in-depth knowledge of Microsoft server products. When Microsoft launched its cloud services, Perficient needed to respond. Perficient was one of the biggest names in technology consulting services when Microsoft introduced its cloud services in Today, Perficient is one of the biggest names in Microsoft cloud services, with a growing range of guidance, architecture, migration, and managed services offerings around both Office 365 and Microsoft Azure. Microsoft Cloud revenues have doubled every year since 2010, now make up 40 percent of total Microsoft revenues, and are on track to constitute as much as 80 percent of total Microsoft revenues by How does Perficient do it? Read on. Solution Perficient chose to integrate Microsoft cloud services into its existing project/consulting-based business model, in order to make the cloud part of every customer engagement. Benefits 90 percent of Microsoft business tied to Microsoft cloud 85 percent of revenue comes from repeat business Reinforces trusted advisor status

2 When customers ask us about new technologies, new options, we have to be ready with the answers. There was really no question about our adopting cloud services. David Greve, National Microsoft Cloud Strategy Director, Perficient Situation When you re a small technology provider, cloud services can be a way to grow your business. But what happens when your revenues are already sky high? In 2008, Perficient was a 10-year-old systems integrator with revenues of more than US$230 million. The company served Global 2000 and other large enterprise customers from a network of offices across North America and a growing range of global delivery centers. The company s business was aligned with Microsoft offerings. When a large enterprise customer wanted a systems integrator to manage an on-premises deployment or upgrade of Microsoft server products, there was a good chance that Perficient would be involved. In recognition of Perficient s expertise with its technologies, the Redmond, Washington software maker awarded Perficient its elite National Systems Integrator (NSI) status. Then, in 2008, Microsoft did something that has since proven to have remade the market for some of its most popular products: it introduced an online services version of its popular Microsoft Office suite. Meanwhile, Perficient s business model was based on large on-premises projects, and business had been good. Would this change? Solution No one in the technology industry gets ahead by standing still. And so, when Microsoft introduced its online services (expanded and enhanced in 2011 as Office 365), Perficient was among the first to adopt them as service offerings for customers. Today, Perficient offers a broad range of services around Office 365, including guidance, architecture, migration, and managed services. We viewed cloud services like a train hurtling down a track, says David Greve, National Microsoft Cloud Strategy Director at Perficient. "We needed to either jump on that train or get run over by it. It s important for us to be ahead of the curve with the latest technology Microsoft offers or we fall behind as a partner. When customers ask us about new technologies, new options, we have to be ready with the answers. There was really no question about our adopting cloud services. The Business Model Remains the Same Maybe not, but Perficient still faced some important questions about how it would adopt cloud services. Some technology providers in the same position have chosen to create cloud practices. Perficient wasn t one of them. Nor did it change its business model, weighted toward project-based consulting. Instead, Perficient makes cloud services available to customers through the company s existing consultancy model. Today, Perficient s Microsoft team leads with cloud services in every engagement and allows the customer to rationalize an on-premises solution when that is its preference. Segregating cloud services would have put us in a difficult position on large-scale projects, by limiting who does what, Greve says. Customers are trying to accomplish results or solve business problems. The cloud allows us to accelerate the realization of their goals by scaling according to their needs. Universal Education Giving every consultant responsibility for using cloud services required that every consultant have the expertise to act on that responsibility. Back in 2008, and later, in 2010, when Microsoft Azure was introduced, that was a bit of a challenge one that Perficient met with in-depth training. Today, says Greve, that s less of an issue: The people we hire as consultants are well-aware of cloud services and come to us with that expertise.

3 Perficient demonstrates its expertise in Microsoft cloud services with webinars and blogs that show enterprise customers how to get the most from the technology. However, cloud services, compared to onpremises technologies, do present a distinctive education issue, he adds. Because new features and updates to cloud services are issued continually, rather than around massive product releases once a year or every few years, education becomes a continual exercise. New features in cloud services can impact a customer s project, Greve says. It s important that we stay ahead of these changes, to ensure we are always delivering successful projects. The Cloud Czar If Perficient s business model didn t change much for the cloud, the company did make other changes. For one, it appointed Greve to his position as National Microsoft Cloud Strategy Director or, as he s known by some within the company, Cloud Czar. He works with other Perficient cloud experts and key customers to help them plan their cloud strategies. He s also responsible for seeing that those strategies are implemented correctly a responsibility that gives him dotted-line supervision of architects in key teams. Greve also helped contribute to another cloud-related change at Perficient: The shift in the company s Microsoft marketing focus to the cloud. In 2013, 40 percent of Perficient s Microsoft marketing effort was devoted to the cloud; one year later, that share has more than doubled, to 90 percent. The company markets its cloud services through a mix of webinars, white papers, blogs, and digital campaigns. It finds that customers no longer need an introduction to the cloud, but that there s always appeal in new aspects of cloud services. Just now, that means high interest in cloud-based social media (Yammer) and business intelligence (Power BI). More than Office 365 Perficient has made a great business out of helping customers move to Office 365 but that s not the extent of the company s Microsoft cloud services business. It was

4 With Microsoft Azure, we have service opportunities we were not able to offer in the past. We have never been able to offer hosted infrastructure services, but now we can. David Greve, National Microsoft Cloud Strategy Director, Perficient also an early adopter of Microsoft Azure, and conducted 22 boot camps for the technology leading up to its launch. As Microsoft Azure has grown for example, with the introduction of infrastructure services so has Perficient s Microsoft Azure-related business. With Microsoft Azure, we have service opportunities we were not able to offer in the past, says Greve. We have never been able to offer hosted infrastructure services, but now we can, in Microsoft Azure. It functions now like an extended data center for customers, which gives us tremendous flexibility in how we recommend customers use it. Benefits Perficient has used Microsoft cloud services to expand services, boost revenues, and get closer to customers and it doesn t plan to stop any time soon. 90 Percent of Business Tied to Cloud Perficient has succeeded with its shift to cloud services. It has 500 customers, with 1.29 million (yes, million) seats on Office 365. And the growth is only accelerating. In 2010, the average deal size was 2,000 seats; four years later, it s 10,000 and deals can get larger than 100,000 seats. Perficient s Microsoft Cloud revenues have doubled every year since 2010, and now comprise 40 percent of the company s total Microsoft revenues. Exchange Online , they later take advantage of its other services, including collaboration (SharePoint Online), business intelligence (Power BI), and communications (Lync Online). As Microsoft continues to expand the ways that customers can use Office 365, it gives Perficient more ways to use it to help its customers. The similar expansion of Microsoft Azure likewise offers additional opportunities to the company. The growing range of ways for customers to use Microsoft cloud services and Perficient s consulting services contributes to another impressive Perficient statistic: 85 percent of its business is repeat business. Reinforces Trusted Advisor Status For Perficient, Microsoft cloud services means more than an opportunity for more sales. It also means an opportunity for closer, deeper relationships with customers. Perficient continues to deal with the enterprise IT executives who have long been its contacts at customer companies, particularly when it comes to moving traditional workloads to the cloud. But now it also deals more frequently with businessside executives, such as chief financial officers and chief marketing officers. They re the ones who are asking how Yammer, SharePoint, Power BI, and other Microsoft cloud technologies can serve the functional areas under their supervision. Greve expects the proportion of total revenues that Perficient receives from cloud services to grow to as much as 80 percent by That seems likely, since 90 percent of the Microsoft deals that Perficient makes today have a cloud component. 85 Percent of Revenue Comes from Repeat Business One reason that cloud services revenue at Perficient continues to expand is that cloud services themselves are expanding. While many customers first adopt Office 365 for We re using our services around Office 365 to reinforce our trusted advisor relationship with our customers, says Greve. We re talking to executives who need both technology and business answers,, and cloud services give us the opportunity to provide those answers.

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