How to Make Money with Azure EMBRACING THE CLOUD ECONOMY BUSINESS MODEL Alex Brown CEO alex@10thmagnitude.com
THE PROPHECY: 2011 Find a way to include cloud in your mix and fire your customers who aren t ready to adopt. To sell cloud and innovation you may have to fire your sales force. Gartner Analyst Tiffani Bova, XChange 2011 HOW TO MAKE MONEY WITH AZURE 2
FAST FORWARD: THE RESEARCH Companies with over 50% of revenue from cloudrelated business outperform their peers on multiple metrics: 1.3x revenue per employee 1.6x more gross profit 2.4x higher new customer mix 2.4x faster growth Public Cloud Services Spending will reach $98B in 2016, with a CAGR 5x the growth of the IT market overall. Source: IDC/Microsoft Successful Cloud Partners study HOW TO MAKE MONEY WITH AZURE 3
BORN IN THE CLOUD Cloud Pioneer I started a cloud company four years ago when few were doing this, and 10 th Magnitude is 100% cloud. We have been using Azure since it launched. Growing the Market I want to share tactical, actionable ways to thrive with Azure so we can all benefit from this exploding market. Seeing the Future I m here to connect the dots between Tiffani Bova s prophecy and IDC s reality. HOW TO MAKE MONEY WITH AZURE 4
BEFORE CLOUD, IT WAS ALL ABOUT PROJECTS You used to be able to win with: Big projects: ERP Deployment; Exchange Migration. Big teams: multi-person, multi-level teams. Big margin: high margin for life of project. 100% 50% 0% 1 2 3 4 Margin Costs HOW TO MAKE MONEY WITH AZURE 5
IN THE CLOUD, IT S ALL ABOUT RELATIONSHIPS Instead of thinking about the value of the project, think about the value of your client relationship. HOW TO MAKE MONEY WITH AZURE 6
HOW IT WORKS Small, Agile Teams Recurring Revenue Multiple, Smaller Sources of Margin Capitalizing on Additional Opportunities in the Account Land and Expand HOW TO MAKE MONEY WITH AZURE 7
HOW TO TRANSACT WITH AZURE: THE ABC CORP. EXAMPLE ABC is a 2,000 person multinational data-analysis and strategic consulting company that currently houses their vast amounts of data in a colocation facility. So how do I think about a client engagement with ABC? How am I going to make money in this account? HOW TO MAKE MONEY WITH AZURE 8
ABC PHASE ONE: DIPPING A TOE IN ABC wants: To learn about cloud, do some testing, try it out with something easy. My response: Give me one of your SANs and I ll show you how to do back up to Azure. $30 1 person Thousands $20 $10 $0 1 2 3 4 5 Services Azure Incentive Support 1 month HOW TO MAKE MONEY WITH AZURE 9
ABC PHASE TWO: WHAT S NEXT ABC wants: To know the next step to Azure. My response: Move the dev/test environment to Azure. $40 1 person Thousands $30 $20 $10 $0 1, Storage 2, Dev/Test 3 4 5 Services Azure Incentive Support 1 month HOW TO MAKE MONEY WITH AZURE 10
ABC PHASE THREE: CAN YOU PUT MORE STUFF IN AZURE? Thousands ABC wants: To know if instead of renewing hardware leases that are up, can they put that stuff in Azure? My response: Of course! So we do an assessment, make a recommendation, do some testing and move 20 apps to Azure. $50 $40 $30 $20 $10 $0 1,,2 3, 4, 5, Storage Dev and Application Application Application Testing Migration Migration Migration Services Azure Incentive Support 1 person 3 months HOW TO MAKE MONEY WITH AZURE 11
ABC PHASE FOUR: HOW ABOUT THAT MOBILE APP? ABC wants: To placate LOB execs who are frustrated that IT hasn t given them a mobile app that helps them sell their data. My response: No problem! Now, since data is already in Azure, it s easy for us to push it down into a mobile app, and using PaaS means I have access to turnkey mobile data services. $50 1 mobile developer $40 Thousands $30 $20 $10 $0 1, Storage 2, Dev and Testing 3, Application Migration 4, Application Migration 5, Application Migration 6, Mobile App Dev 7, Mobile App Dev 1 UX Designer Services Azure Incentive Support Mobile Dev Mobile Data SVCs HOW TO MAKE MONEY WITH AZURE 12
SHOWING THE MONEY This is the value of the client: An ongoing relationship that generates recurring revenue streams. $50 $40 Thousands $30 $20 $10 $0 1, Storage 2, Dev and Testing 3, Application Migration 4, Application Migration 5, Application Migration 6, Mobile App Dev 7, Mobile App Dev 8 9 Services Azure Incentive Support Mobile Dev Mobile Data SVCs HOW TO MAKE MONEY WITH AZURE 13
COMMIT TO AZURE The evolved Azure client relationship is built around a continual stream of recurring revenue created by pieces of professional services which is why your sales team may no longer be the right fit. HOW TO MAKE MONEY WITH AZURE 14
COMMIT TO AZURE The transition to Azure isn t going to get any easier as cloud adoption explodes. Flip your business model Adjust your cost structure Find new customers Retool your sales force To shift to Azure you have to fully commit, but the payoff is there. HOW TO MAKE MONEY WITH AZURE 15