Catapult Systems Succeeds with Sales, Marketing, Delivery Makeovers for the Cloud Overview Partner: Catapult Systems Partner Website: www.catapultsystems.com Country or Region: United States Industry: Professional services Partner Profile Catapult Systems, based in Austin, Texas, is a globally-focused Microsoft IT consulting firm that provides application development, enterprise solutions and infrastructure services. Business Situation The company wanted to remain a key provider to its customers as those customers migrated to the cloud. Solution Catapult Systems revised its sales, marketing, and delivery models. Benefits Cloud business up 500 percent Margins up due to greater delivery efficiency Margins up due to greater delivery efficiency "As Microsoft continues to gain market share in the cloud market, we re finding that deals are becoming even easier to close, and require less pre-sales support. Emily Lynch, Vice President of Marketing, Catapult Systems Catapult Systems is one of the many Microsoft partners that built a successful business serving its customers on-premises technology needs, only to find the market shift with the advent of the cloud. It was an early adopter of Microsoft cloud services, but it found that merely offering cloud services wasn t enough. To continue its position with customers as those customers migrate to the cloud, and to continue to grow, Catapult Systems needed to do more and it has. With changes to its sales, marketing, and delivery models, the company has seen cloud revenues grow by tenfold. Lead generation is up 200 percent and self-qualification of leads has doubled. Margins are up, too.
We chose Microsoft because we believed in the product direction and we believed in the partner model. Emily Lynch, Vice President of Marketing, Catapult Systems Situation Catapult Systems built itself into one of the most distinguished Microsoft solution provider partners in the US, with elite partner status and about as broad a Microsoft product portfolio as it s possible to have. Then the cloud came along. What s a Microsoft partner to do? The company had undergone its first major transformation in 2001, well before the cloud. That s when it decided, after eight years in business, to focus exclusively on selling Microsoft-based solutions. We had been trying to be all things to all people, recalls Emily Lynch, Vice President of Marketing at Catapult Systems. We decided we could really excel by focusing on a consistent set of solutions. We chose Microsoft because we believed in the product direction and we believed in the partner model. The move helped fuel strong growth for the company throughout the last decade. The company was also helped by its business model, in which it provided system integration services and other project-based services for a broad range of infrastructure and application components across the Microsoft stack, from the desktop to the data center. And it was helped, too, by a delivery model that focused on local sales and deployment of its solutions from 10 offices located through the country. Along the way, the company became one of just 40 Microsoft National Systems Integrator partners, and catapulted to the top 0.1 percent of Microsoft partners by earning 14 Gold and 6 Silver competencies. The company s sales model made good use of the Microsoft relationship by emphasizing co-selling opportunities. Sales efforts were high touch including, for example, in-person events and focused on expanding existing accounts. It worked. But, by 2010, it wasn t working as well. It was a credit to its dedicated and talented staff that Catapult Systems continued to grow during the recession but company executives knew they had to address concerns that were more than just cyclical. The cloud was now on customers minds. Catapult Systems wasn t cloud averse; it had offered Microsoft BPOS, the forerunner to Microsoft Office 365, as soon as it had become available in 2008. But the company was, in Lynch s words, only lightly in the cloud. That gave cloud-centric providers, particularly born-in-the-cloud providers, an opportunity to sell into its accounts. Catapult Systems needed a second transformation, one that would refocus it toward the cloud and, in particular, toward helping its customers to understand their choices in the cloud and to guide them through making and implementing those choices. The company gave itself 18 months in which to pull off that transformation, and to become everything that its customers could get from born-in-the-cloud competitors. Solution Catapult Systems had set a tall order for itself, one that required changes to both its business and delivery models. It implemented those changes in three major ways. Change #1: The Sales Model First was a big change in the way Catapult Systems sold its services. Its traditional sales model was based on local pre-sales and sales personnel operating out of each of the regional offices. But the cloud is about scalability and more efficient use of resources, so it only made sense to mirror those characteristics in its new effort to sell cloud services. The company trained its regional sales personnel to sell cloud services, but it also created a new, centralized cloud sales team
The cloud is central to Catapult s business and that s reflected on its home page. to extend its sales reach. The new team, with two pre-sales and four sales reps, targets the so-called white-space areas of the US that are outside of the company s regional-office territories. The cloud sales reps are all new to the company, but not new to selling cloud services, nor to telesales. The centralized selling team also performed another important function for Catapult Systems: helping to build momentum for cloud services deals among the traditional sales force. Our new cloud services team members were the pioneers here, says Lynch. Once our traditional sellers saw the success that the new team was having with cloud services, it motivated them to be successful, too. That was a key to building momentum for what was a very big change for the sales force. Change #2: Marketing Automation The second key change was a major investment in cloud marketing. Catapult Systems made the investment in response to two phenomena: One was the reduced size of cloud deals compared to onpremises deals, which requires a greater volume of deals to compensate for the difference; the other was the new ways that customers are buying IT services. Those new ways have enterprise customers taking advantage of the Internet to conduct more research than ever before, and to contact sellers much later than they do in the traditional sales process. The company s existing, high-touch sales process was out of sync with customers that didn t want to be touched until they were much more ready to buy. So, Catapult Systems built a digital marketing automation engine for cloud services. That
If we don t discuss Microsoft cloud services with our customer, someone else will. Emily Lynch, Vice President, Marketing, Catapult Systems engine tracks user activity on the Catapult Systems website and delivers content to users based on the content they ve already chosen, with the aim of driving the user to self-qualify for cloud services and request a sales contact. The company s digital marketing engine also includes common tools such as search engine optimization, click-through ads, and blogs. Change #3: The Delivery Model The third change that Catapult Systems made was to create a centralized business unit, which it named the Remote Delivery Center, to deliver cloud services engagements remotely. The teams in the regional offices still take the lead in delivering projects, but now they have the Remote Delivery Center as backup. They use it to handle overflow work during periods of high demand. Project-based delivery services make up the bulk of Catapult Systems cloud-related revenues. The company doesn t sell Office 365 subscriptions, but implements deployments of Office 365, Microsoft Azure Infrastructure as a Service, Windows Intune, and Yammer. It also provides managed services for applications and infrastructure, including monitoring, configuration and management, remediation, and development. The company has embraced the cloud without abandoning the onpremises projects and services that most of its customers continue to request. About 20 percent of services revenue is cloudrelated; Lynch says that number may rise to about 60 percent by 2016. Benefits Catapult Systems is successfully reorienting itself to the cloud, increasing cloud revenues and margins, building closer relationships with customers, and generating more and better sales leads to continue these trends. Cloud Business up 500 Percent In the first full year of Catapult Systems transformation as a cloud services provider, the company served 140 cloud customers and deployed 238,000 seats of Office 365. That s 500 percent more Office 365 business, as measured by seats deployed, than the company did in the preceding 12 months. About 70 percent of the company s cloud customers were existing customers for its on-premises services. So, Catapult Systems cloud focus helped the company to continue to service their needs, to increase the amount of business that it does with them, and to forestall their move to other cloud providers. If we don t discuss Microsoft cloud services with our customer, someone else will, says Lynch. In the past, we weren t doing everything possible to ensure that we remain our customers number one provider both in the cloud and on premises. Now, we are. Lead Generation up 200 Percent; Self- Qualification Rate up 100 Percent Because cloud deals are typically for smaller amounts than the deal sizes of on-premises projects, Catapult Systems needs to close more of those deals more quickly to maintain and expand revenue. Its new sales model is helping it to succeed in doing so. The shift from high-touch events to marketing automation has boosted sales lead generation by 200 percent. Moreover, the leads are of higher quality. The company rates them at 40 percent qualified, while the sales leads that the company previously received were just 20 percent qualified. The higher qualification rate means that they are faster and easier to close, so Catapult Systems successfully closes a higher rate of deals. By adopting a sales engine that s tuned to the cloud, we ve increased both the quantity and quality of sales leads, so we re closing more deals, says Lynch. That s exactly what we hoped to achieve. And as Microsoft continues to gain market share in
For More Information For more information about Microsoft products and services, call the Microsoft Sales Information Center at (800) 426-9400. In Canada, call the Microsoft Canada Information Centre at (877) 568-2495. Customers in the United States and Canada who are deaf or hard-of-hearing can reach Microsoft text telephone (TTY/TDD) services at (800) 892-5234. Outside the 50 United States and Canada, please contact your local Microsoft subsidiary. To access information using the World Wide Web, go to: www.microsoft.com For more information about Catapult Systems services, call or visit the website at: www.catapultsystems.com the cloud market, we re finding that deals are becoming even easier to close, and require less pre-sales support. Margins up due to Greater Delivery Efficiency Getting more business is one key to making the cloud, with its smaller deal sizes, pay. The other key is servicing that business more cost-effectively. Catapult Systems is achieving this too, thanks in part to its centralized Remote Delivery Center. Local delivery services made sense in the world of on-premises projects, because the company s technical staff needed to be located near the customer. The cloud makes that irrelevant. By shifting some delivery functions to the Remote Delivery Center, Catapult Systems has reduced the amount of idle resources it needs to maintain in the local offices to handle spikes in demand. By delivering cloud projects more cost effectively, Catapult Systems is also seeing higher margins on these projects. As its cloud business continues to grow, Catapult Systems expects to continue the shift to remote delivery. The company is also seeing higher margins on managed services compared to delivery services, a difference that will have increasing impact on its bottom line as it continues to grow its managed services business. Microsoft Cloud OS Microsoft Cloud OS helps businesses benefit from converging technology trends such as big data, cloud services, and 'bring your own device' initiatives. From rapidly building and deploying applications to supporting real-time analytics across all forms of data, IT can drive efficiency and deliver new value with Cloud OS. For more information about Microsoft Cloud OS, go to: www.microsoft.com/en-us/servercloud/cloud-os/default.aspx This case study is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY. Document published October 2014