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Planning for Cloud Profitability from Day One

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In planning for Cloud Profitability from Day One, Larry Walsh from 2112 group will showcase the cloud infrastructure opportunities available to MSPs and how the ProfitBricks public cloud can be leveraged via the channel to increase profitability through strategic planning and execution.

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Planning for Cloud Profitability from Day One

  1. 1. Planning for Cloud Profitability from Day One November 2015
  2. 2. 2 Introduction ProfitBricks in 2015 Mission Painless Cloud Computing Infrastructure service which enables existing IT teams, to deploy their applications and get all of the benefits of the at an IT budget friendly price. Details HQs in Berlin, Germany, San Antonio, TX and Boston, MA 135 Employees Investors Achim Weiss –CEO Andreas Gauger –CMO United Internet (UTDI: Market Cap: $8 Billion) Technology KVM Based – Cloud Computing IaaS service, built on InfiniBand network interconnects with an efficient, performance optimized platform with minute based metering and billing, deployed on premium commodity hardware and housed in top-tier data centers. Product IaaS – Compute, Networks, Storage with Data Center Design and Management Software
  3. 3. 3 Other Cloud Providers ProfitBricks: Painless Cloud Infrastructure Painless Cloud Infrastructure
  4. 4. 4 Migration without adaptation – ProfitBricks cloud infrastructure behaves like physical hardware with all the advantages of the cloud No learning curve – ProfitBricks lets existing teams’ knowledge sets and processes be used to achieve rapid success with the cloud 24/7 Phone support – USA based Cloud Architects and SysAdmins always on standby Price/Performance Guarantee: “We guarantee that any workload deployed on ProfitBricks will cost less than the same workload running at the same performance level on the IaaS platforms of Amazon, Google or Microsoft.” Painless Cloud Infrastructure 1 2 3 4
  5. 5. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. “We are going through the greatest transformative period in the history of our industry.” - Everyone
  6. 6. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH.
  7. 7. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. - 7 -
  8. 8. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. OBVIOUS Changing Expectations The future is about outcome-based systems & services, not individual products Business Models Costs and Budgeting Technology & Information Management Consumption Speed Work/Life Balance Automation & Accessibility NOT OBVIOUS Unbridled Possibilities Expectations Social Impact Risk and Risk Innovation Imagination
  9. 9. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. - 9 - • Software as a Service (SaaS) • Platform as a Service (PaaS) • Infrastructure as a Service (IaaS) • Business Process as a Service (BPaaS) • Managed Clouds Why Clouds? Enter the Clouds
  10. 10. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. Why Customers Want Cloud - 10 - 43% reduce IT capital expenses 40% reduce cost of IT operations 23% increase operational productivity 22% increase agility & competitiveness 21% improve performance 15% access new technologies
  11. 11. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. - 11 - Cloud Computing Is a Growing Market Opportunity 42% of businesses say cloud computing is top 5 spending priority 30% Compound growth rate of infrastructure services between 2013 & 2018 11% shift in budget allocations away from traditional IT to cloud services 80% of all enterprises by 2016 will have some investment in infrastructure services 59% of all cloud-based workloads will be software services by 2018
  12. 12. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. Cloud Computing Is a Growing Market Opportunity SaaS $133B PaaS $12B IaaS $5B BPaaS $10B Source: Forrester Research
  13. 13. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. Technologies with High Growth Potential 0% 10% 20% 30% 40% 50% 60% Managed Print Services Converged Infrastructure Software-defined networking Unified communications and collaboration Servers/data center PCs/notebooks/netbooks Data networking (routing, switching) Business software Other (please specify) Data storage Virtualization Application development Mobile device management/BYOD Internet of Things/machine-to-machine applications Printing and imaging Wireless networking Mobile devices (smartphones, tablets, handhelds) Business analytics / Big Data Voice services/bandwidth/connectivity/Internet access Backup, continuity and disaster recovery Data security Cloud infrastructure/services
  14. 14. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. 0% 10% 20% 30% 40% 50% 60% Marketing Acquisitions Other Developing products independently of vendors and service providers Developing hosted services Adopting more vendor hardware/software products for resale Partnering with application vendors and service providers Partnering with hosting providers for cloud services Creating branded products with vendor products as components Partnering with service providers to deliver cloud/application services to our customers Creating services with vendor products as components Channel Growth Investments
  15. 15. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. Cloud Computing’s Appeal • F l e x i b i l i t y • A g i l i t y • S c a l a b i l i t y • U b i q u i t y • A d a p t a b i l i t y • U p d a t a b i l i t y • C o s t s
  16. 16. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. Cloud Costs and Revenue Product
  17. 17. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. Cloud Costs and Revenue Product Cloud
  18. 18. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. CapEx vs. OpEx Revenue Time CapEx OpEx Compounding Recurring Revenue
  19. 19. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. - 19 - R . I . P Hardware & Software On-prem failed over to the cloud
  20. 20. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. Cloud as a Replacement Servers Backup Storage Software Security Communications
  21. 21. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. - 21 - Average solution provider earns as much as 1/2 to 2/3 of their gross revenue from managed services Cloud as a Revenue Generator
  22. 22. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. Cloud as a Systems Catalyst Cloud Computing Devices Applications Networks Analytics Storage/Backup Output/Presentation Transport Security Administration&Operations Training&Support ManagedServices Consultation&Advisory CapEx OpEx (CapEx) + ((OpEx)*(Time)) = Total Accretive Value
  23. 23. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. Cloud as a Solutions Component
  24. 24. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. Operating Deficit Cloud Challenge Revenue/Cost Time 1 Operating Costs Recurring Revenue
  25. 25. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. Cloud Challenge Revenue/Cost Time/Accounts 1 2 3 4 5 6 7 8 Operating Costs Recurring Revenue Cash Flow Positive • Cash flow turns positive when recurring revenue is greater than operating expense • Cloud service achieves ROI when revenue covers operating expenses and initial investment costs • Profitability happens when recurring revenue generates more than investment and operating expenses
  26. 26. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. Compounding Cloud Revenue Revenue&OperatingExpenses Time • Continuous addition of new accounts or account expansion that leads to increasing revenue • Scaling resources faster than services consumption • Maintaining a low account attrition rate • Commitment to sales and marketing of services and value • Focus on customer experience and outcome-based value
  27. 27. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. Planning for Profitability • Pick a Cloud, but Not Any Cloud  Keep start-up costs down by leveraging existing expertise and resources  Build cloud practices based on existing technology and customer experience  Create value by incorporating existing resources with cloud capabilities
  28. 28. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. Planning for Profitability • Identify Customer  You can operate globally, but the world is not your customer  Understand and profile customers to establish sales scenarios and customer interactions  Define who is not your customer and why
  29. 29. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. Planning for Profitability • Select a Cloud Model Advise Refer Resell Build Support Manage Operate Investment
  30. 30. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. Planning for Profitability • Select a Recurring Revenue Model  On-demand  Weekly  Monthly  Quarterly  Annually Revenue model will determine sales needs and operating parameters for planning expenses and investments
  31. 31. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. Planning for Profitability • Plan Transition – Don’t Do a Crash Change Revenue&OperatingExpenses Time Cloud Legacy Products Inflection Point • Do not stop selling legacy products; use legacy revenue streams to pay for future investments • Plan a steady, progressive transition from legacy revenue to cloud/services revenue • Set milestones and goals for expanding cloud revenue and measuring performance • Accept that this process takes time – up to 3 years
  32. 32. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. Planning for Profitability • Make a Plan, Set Goals, Draw a Road Map  Create a vision that translates to value  Set goals – revenue and development  Know how you’re performing  Decide when to expand capacity  Maintain and exceed returns on investment  Draft a plan that sets the operational parameters, roles and responsibilities, and performance expectations  Establish what you want to be when you grow up
  33. 33. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. Yes 78% No 7% Don’t know 15% Yes 58% No 25% Don’t know 17% Should You Have a Growth Strategy? Does Your Company Have a Growth Strategy? SOURCE: 2112 Channel Forecast Report 2015, January 2015 - 21 - Planning for Growth
  34. 34. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. Planning for Profitability • Commit to Sales, Not Just Technology  You are first and foremost a sales organization  Cloud services model is dependent on sales first, technology second  Create a sales culture with management, governance, planning, expectations, and accountability  Demonstrate sales capabilities to vendors
  35. 35. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. Planning for Profitability • Commit to Marketing  Cloud capabilities are worthless if no one knows who you are, what you’re doing, or what you’re capable of  Communicate value to vendors and customers alike  Use all available resources  Commit to sustained marketing and communications; no “one and done” efforts
  36. 36. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. Wash, Rinse, Repeat
  37. 37. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. Drive to the Next Level • Goal Setting • Business Planning • Focus & Expertise • Investment • Risk Acceptance • Execution, Governance & Accountability • Evaluation & Adjustments • Repeat, Repeat, Repeat
  38. 38. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. - 38 - QUESTIONS
  39. 39. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. - 39 - “The secret of change is to focus all of your energy not on fighting the old, but on building the new.” - Socrates
  40. 40. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. Larry Walsh lmwalsh@the2112group.com @lmwalsh2112 @the2112group Website www.the2112group.com 2112 Blog www.the2112group.com/blog Information contained in this publication has been obtained by sources and methodologies of The 2112 Strategy Group, LLC, and are considered to be reliable but not warrantied. This publication may contain the opinions of The 2112 Strategy Group, which are subject to change from time to time. This publication is copyrighted by The 2112 Strategy Group, LLC. Any violation of the limited terms of reproduction or redistribution of this publication, in whole or in part, whether in hard-copy format, electronically, or otherwise to persons not authorized to receive it, without the express consent of The 2112 Strategy Group, LLC, is in violation of U.S. copyright law and will be subject to an action for civil damages and, if applicable, criminal prosecution. Any questions should be directed to The 2112 Strategy Group at (347) 770-2112 or info@the2112group.com.
  41. 41. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. Getting Started - 41 - Check out the new ProfitBricks Cloud Computing: Channel Go-To-Market Guide, produced by The 2112 Group

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