One-Size-Fits-All Fits None: How to Create Cloud Offers for Industry Verticals Joshua Beil, Director Content Marketing and Research John McMillan, Director Business Consulting Services
Agenda 1 SMB cloud market 2015 2 Why verticals matter 3 Calibrating your portfolio to win key verticals 4 Emerging vertical-led services opportunities 1
Global Market Update
SMB Cloud Insights Background annual survey in 19 countries NAME DESCRIPTION WHO WHERE HOW WHAT SERVICES HOW MANY Odin SMB Cloud Insights Odin primary research laser focused on SMB segment Developed by Odin for use with customers Organizations with 1-250 employees; (1-1k employees in the US only) Decision-maker on IT and technology spending 19 countries (US, Mexico, Brazil, Canada, UK, France, Germany, Spain, Netherlands, Russia, Poland, Japan, China, India, Australia) Annual market survey Segmentation: Micro business: 1-9 employees Small business: 10-49 employees Medium business: 50-250 employees IaaS Web presence UC/collaboration Business applications 400 600 individuals per country
Market Insights Review Global SMB cloud market to reach $US 159B by 2018 $US Billions 60 50 40 30 20 10 0 $38 $56 $17 $26 $19 $29 $24 $48 Infrastructure as a Service Web Presence & Web Applications 2015 2018 Unified Communications Business Applications CAGR Region 17.2% Global 28.8% Sub-Saharan Africa 23.5% Latin America 21% Asia Pacific 17.8% Europe/Central Asia 17.4% Middle East & North Africa 12.1% North America Source: Odin SMB Cloud Insights (Global) 2015
Cloud Service Usage SMB ramping up cloud adoption 12 12 10 10 8 8 6 6 4 4 2 0 6 8 4 6 6 8 8 10 All SMBs Micro Small Medium 2 0 5 8 4 7 5 8 6 10 All SMBs Micro Small Medium 2015 2018 2015 2018 SMBs are adopting more cloud services 50% SMBs today use only one service provider SMBs are open to bundles that make billing easy Source: Odin SMB Cloud Insights (US & Germany), 2015
US Market by Segment 2015 & 2018 Small business lead cloud adoption charge $US Billions 12 2015 2018 10 8 $2.0 What SMBs are driving business app consumption? 6 4 2 0 $0.3 $0.6 $8.1 $1.3 $3.0 IaaS 1-99 Employees IaaS 100-999 Employees $0.1 $0.6 Web PresenceWeb Presence 1-99 100-999 Employees Employees $0.9 $0.1 $4.4 $1.3 $4.3 $2.0 $4.4 $1.9 UC 1-99 Employees UC 100-999 Employees Business Applications 1-99 Employees Business Applications 100-999 Employees Source: Odin SMB Cloud Insights (US) 2015
Why Verticals Matter
SMB is a diverse segment 1% Elite Open to Guidance Early adopter Percentage of companies Value technology Architects for growth 51% 48% Open to Guidance Open to Guidance Seek ways to improve Know tech can help Not sure where to start Percentage of spending 8% 10% Basic Open to Guidance Limited tech needs Price conscious 82% Reactive buyer
How SMBs Buy Technology Most SMBs rely on similar information sources SMB research methods Trusted advisor Web searching Local IT resource Industry news Verticals that influence Professional services Accountant Legal IT/business consultants Existing service provider 9 Take action Target early adopters & propagate their influence with case studies
US By the Numbers Largest verticals retail, pro services & healthcare 0 0.4 0.8 1.2 Millions Retail Trade Professional Services Healthcare Construction Hospitality & Leisure Finance & Banking Real Estate & Engineering Manufacturing Transportation & warehousing Business & IT Services Arts & Entertainment Education Source: US Census 2011
Europe By the Numbers Largest verticals retail, pro services & construction Millions 0 1 2 3 4 5 6 7 Retail & Wholesale Trade Professional Services Construction Manufacturing Hospitality & Leisure Real Estate Activities Transportation & warehousing Information & Communcations Source: EuroStat Census 2011
Business application growth Open to Guidance are next wave adopters of cloud US Europe Early Adopters Business & IT services Manufacturing Education services Agriculture Transportation Information & comms Next Wave Finance & banking Real estate & engineering Hospitality & leisure Professional services Healthcare Arts & entertainment Retail trade Finance & banking Hospitality & leisure Healthcare Construction, real estate Education Professional services Manufacturing Retail & wholesale trade 12 Source: Odin SMB Cloud Insights (US & Europe) 2013 & 14
Portfolio View
The Pivot to Verticals Opportunity to differentiate & rise above competitors Pros Wide appeal Sell significant volumes Good for emerging markets Cons Horizontal Lack of differentiation Pros Relevant business solutions Opportunity to differentiate Cons Vertical Requires large portfolio Perceived as complex Recommendation Target verticals through marketing execution: Evolve strategy over 2-3 years Add vertical products Leverage indirect channel You are here Need to be here 14
Portfolio View By Vertical Service category business applications 1 2 3 4 5 Professional services IT/business services Growth leaders Retail trade Emerging services 15
Business Applications Vertical professional services US Europe Recommendation Collaboration Suite Online backup Web/phone conferencing File sharing Instant collaboration Notable Mentions Online accounting HR/payroll Business Suite Web/phone conferencing File sharing Online backup HR/payroll Notable Mentions Online accounting Support/help desk Develop vertical propositions Select 1-2 verticals Create vertical propositions Build out product propositions based on market intelligence and feedback from sales Source: Odin SMB Cloud Insights (US, France, Germany, Netherlands, Poland, Spain, UK) 2013 & 14
Business Applications Vertical IT/business management services US Business Suite HR/payroll Web/phone conferencing* File sharing* Instant collaboration* Notable Mentions Online accounting Online backup* Online CRM* Business Suite Web*/phone conferencing File sharing Online backup* HR/payroll Europe Notable Mentions Online accounting Support/help desk* Recommendation Customer testing Test propositions with customers Ideally qualitative and quantitative research Cover insight, messaging and propositions Refine propositions Source: Odin SMB Cloud Insights (US, France, Germany, Netherlands, Poland, Spain, UK) 2013 & 14 * Growth leaders in next 3 years
Business Applications Vertical US & Europe growth leaders US Europe Recommendation Manufacturing Collaboration Suite Online backup Web/phone conferencing File sharing Instant collaboration Notable Mentions Online accounting HR/payroll Transportation & Warehousing Business Suite Web/phone conferencing HR/payroll File sharing Online backup Notable Mentions Online accounting Support/help desk Final Design Source ISV s for products that underpin final propositions Complete product and customer experience definition Configure within OSA GTM Execution Source: Odin SMB Cloud Insights (US, France, Germany, Netherlands, Poland, Spain, UK) 2013 & 14
Web & Business Applications Vertical retail trade Web Presence Suite Ecommerce SEO Web Apps Security & SSL Mobile optimization Recommendation Build online channel service Migrate from website to online sales channel Global & national reach Business Apps Business Suite Payroll & HR Online accounting Online backup* File sharing Source: Odin SMB Cloud Insights (US) 2013 & 14 * Growth leaders in next 3 years
Emerging Services by Vertical
Emerging Services Cloud desktops deliver operational savings/benefits Virtual desktop + productivity suite + add-ons Big market potential IDC: WaaS $661M market; 84% CAGR Gartner: $30B global desktop outsourcing market Strong vertical adoption Manufacturing Healthcare Business services Workspace as a Service APS option GetCloudServices 21 Source: Odin SMB Cloud Insights (US) 2013 & 14; Gartner; IDC
Emerging Services High deployment costs drive SMB service opportunity Monitors, manages and secures employees' mobile devices Smartphone adoption, BYOD, and flexible working driving need Strong vertical play Manufacturing Healthcare Retail Mobile Device Management Product option: Microsoft EMS 22
Bringing it Together
Bringing it Together GTM Execution! Vertical Propositions tailored to the needs of that industry underpinned by a clear bundle proposition and a commitment to delivery excellence and support. RETAIL IT/BUSINESS MGMT SERVICES PROFESSIONAL SERVICES MANUFACTURING ON-LINE CHANNEL CREATION Domains & web hosting E-commerce SEO Mobile optimization BUSINESS SUITE Payroll & HR Online accounting Online backup File sharing BUSINESS SUITE Collaboration Web/phone conferencing File sharing Instant collaboration Business Application Services Online backup HR/Payroll Online accounting Support/help desk COLLABORATION SUITE Online Backup Web/phone conferencing File sharing Instant collaboration BUSINESS SUITE Online accounting HR/payroll COLLABORATION SUITE Online backup Web/phone conferencing File sharing Instant collaboration BUSINESS SUITE Online accounting HR/payroll SECURITY & BACK UP With SaaS we can provide you with security and back-up for all your business data BUNDLED SERVICES A standard set of either bundled or linked [ via prices ] services e.g. Broadband SERVICE WRAP A standard or tiered set of service/support services to ensure the service is tailored and implementation effective
In Conclusion Key Takeaways 1. Vertical segmentation provide focus on SMBs technology spending 2. Target early adopter verticals they influence other SMBs 3. Opportunity to differentiate & rise above competitors Next Steps 1. Perform portfolio gap analysis with 1 or 2 verticals 2. Create vertical proposition & test it with customers 3. Source ISVs and add services
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