Firas Raouf from Ope

1. Service vs. Technology:
What Should Your Cloud-based
Company Deliver?
Measuring, Managing and Monetizing for Success
in the Cloud
Mass Technology Leadership Council Breakfast Seminar
March 29, 2012
Proprietary and Confidential © 2012 OpenView Investments, LLC. All Rights Reserved

2. 2
A Cloud Revolution… or Evolution?
• The concept of cloud computing has been around since
the 1960s.
• Since then, it has undergone a metamorphosis into
ASP, SaaS, IaaS, and what we now holistically call cloud-
based services.
• Companies delivering cloud-based technology/service
need to adapt to what modern consumers expect from
their solutions.
Proprietary and Confidential © 2012 OpenView Investments, LLC. All Rights Reserved

3. 3
So, What Do Customers Really Care About Today?
It’s all about SERVICE, not technology:
• Ten years ago, an ASP or SaaS company’s most
important differentiator was its technology.
• Today, customers care about:
- Constant service availability
- Their specific pain/need addressed the way they want
- Reliable service onboarding and support
- Exceptional user experience
• Your challenge is how to deliver a service – not a
technology – to resolve their specific pains and
needs
Proprietary and Confidential © 2012 OpenView Investments, LLC. All Rights Reserved

4. How Do the Best Cloud Companies Address Evolving 4
Customer Expectations?
1. Focus sharply on a core segment
A market segment is a classification of potential
customers by one or more characteristics, in order to
identify groups of customers, which have similar needs
and demand similar products and/or services
concerning the recognized qualities of these
products, e.g. functionality, price, design, etc.
Wkipedia
Proprietary and Confidential © 2012 OpenView Investments, LLC. All Rights Reserved

5. How Do the Best Cloud Companies Address Evolving 5
Customer Expectations?
1. Focus sharply on a core segment
• You need a segment focus to be able to deliver the
right solution to the right user through the right
channel
• You need the right solution to achieve clear
competitive differentiation
• Your core segment gives you the beachhead from
which you can grow into other segments
Proprietary and Confidential © 2012 OpenView Investments, LLC. All Rights Reserved

6. How Do the Best Cloud Companies Address Evolving 6
Customer Expectations?
2. Optimize distribution economics
• Create a relationship between customer
acquisition, onboarding, support, retention, and
upsell.
• Key metrics to focus on include:
CAC: Total cost of ASP: Average BE: The breakeven
acquiring a revenue per period, period for
customer per customer recouping CAC
Churn: How much CLT: Customer life LTV: Revenue
revenue churns per time (inverse of generated over the
period by cohort churn) life of the customer
Proprietary and Confidential © 2012 OpenView Investments, LLC. All Rights Reserved

7. How Do the Best Cloud Companies Address Evolving 7
Customer Expectations?
2. Optimize distribution economics –
Leverage your segment focus
• Segment focus creates differentiation
• Differentiation leads to higher lower CAC and
higher ASP
• Focus on user experience leads to lower churn and
higher LTV
Proprietary and Confidential © 2012 OpenView Investments, LLC. All Rights Reserved

8. How Do the Best Cloud Companies Address Evolving 8
Customer Expectations?
3. Leverage content marketing to lower customer
acquisition costs
• Content marketing allows companies to:
- Communicate and engage directly with their core
customer
- Develop thought leadership that speaks to those
customers’ common pain
- Efficiently and inexpensively create brand awareness
• It also creates a forum for long-term engagement
with current customers, allowing companies to
provide better service and improve retention.
Proprietary and Confidential © 2012 OpenView Investments, LLC. All Rights Reserved

9. How Do the Best Cloud Companies Address Evolving 9
Customer Expectations?
4. Executing sales and marketing strategies around the
core segment
• It’s not effective or efficient to cast a wide net and
try to reel in every possible customer you can
catch
• Your goal should be to execute sales and
marketing strategies that speak directly to your
core segment – and no one else.
Proprietary and Confidential © 2012 OpenView Investments, LLC. All Rights Reserved