Microsoft Final Road to the Cloud Decks
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Transcript of Microsoft Final Road to the Cloud Decks
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CONSUMERS USE MOBILE
PHONES TO GET INFORMATION
AT LEAST 3-4 DAYS PER WEEK
/
1.4GLOBAL CONSUMERS
BIL
LIO
N
WITH TABLETS AND
SMARTPHONES
BY 2016
AB
OU
T
OF WORKERS DO SOME WORK OUTSIDE
OF THE OFFICE
80%NEARLYOF TODAYS GLOBAL WORKFORCE AREANYTIME, ANYWHERE WORKERS WITH 3+
DEVICES, WORK FROM MULTIPLE
LOCATIONS AND USE MANY APPS
29%BELIEVE I.T. IS INEFFECTIVE AT PROVIDING
COLLABORATION, DATA ANALYSIS AND
MOBILITY CAPABILITIES
60%
EM
PLO
YE
ES
GLO
BA
LLY
ARE CONCERNED THAT THE DIGITAL
TORRENT IS COMING FASTER THAN
THEY CAN COPE
51% OF CIOS
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Source: KPCB/Mary Meeker. Internet Trends 2014: Code Conference
Mobilethe new normal
Desktop PCs Notebook PCs Tablets
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013
Millio
ns
of
un
its
ship
ped
80
60
40
20
-
Source: IDC Sept 2013 and Microsoft
Auto & Trans Retail Manufacturing Healthcare Energy Computing Telecom Consumer
$7 B $16 B $197 B $3 B $27 B $908 B $179 B $356 B System Revenue
IntelligentSystems
1.7T
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B5075212
-
249834
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Source #2: IDC Direction 2014, Transformation Everywhere How SaaS Gets Built, March 2014
Source #1: IDC Forecasts Worldwide Public IT Cloud Services Spending to Reach Nearly $108 Billion by 2017 as Focus Shifts from Savings to Innovation, 2013 )
Software Revenue Growth Rate in 2017
Customers are buying services, not applications or servers
Shifting adoption patterns: using SaaS as a way to extend on-premises applications to replace existing applications with cloud alternatives
91% of net new software is built for cloud delivery in 20142
20% of all applications revenue in 2014 is generated by SaaS1
22%
4%
0%
5%
10%
15%
20%
25%
SaaS/PaaSRevenue
Packaged Software
5.5x higherCloud SW
growth than packaged SW
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By 2017, the CMO will spend more on IT than the CIO and control most of the technology spending.
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How will you deliver fluid experiences that
untether the workforce
transcend time, place, context, and device?
connect customers
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The challenge of mobility
Where is the value?
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Where do you invest?
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Different paths (and economics) to apps
INVESTMENT NATIVE UX MARKET
Native app Empty Full Empty
Native Web Full Empty Full
Cross-platform Half Half Full
Universal app Full Full Half
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How will you adapt to a cloud first world
unlocking new markets
as the economics of software shift?
enabling development agility
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Increasing deal size with the cloud
Solution on Customer Hardware
Customer has 600k budget
Hardware/maintenance cost = 300k
Software license opportunity = 300k
Solution on Azure
Customer has 600k budget
Azure cost to run = 150k
Software license opportunity = 450k
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Leading in a cloud-first world
Strong Focus and CommitmentClear business model and customer segmentation
Investment in dedicated or experienced resources
Seller Incentive To Drive CloudComp plans or sales incentive developed to drive the right selling behavior
Appropriate partner margins to encourage channel to lead the change
Pricing That Drives Business ObjectivesPriced with competition and/or existing offerings taken into consideration
Incentive for selling SaaS over other products to accelerate early adoption
Well Integrated and VisibleInternal systems adapted and ready at launch Learn, Try, Buy clear on websiteChannel and field ready with relevant offers and incentives tied to marquee industry event
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Cloud and SaaS model adoption
Opportunities
Challenges
Expanding Market Opportunity
Sell directly to business decision makers
More predictable revenue
Lower infrastructure support costs
Requires business model shifts
Revenue builds up more slowly, harder to invest back in business
Legal and regulatory concerns around data
SLA management - Requires high level operational disciplines
Requires re-architecting existing applications
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Balancing SaaS delivery with core software and solving customer problems.
Software+ Customer workflows
Core Competencies
Essential value for ISVs to build
As-a-Service(Platform & Infrastructure
Management)
Non-core, but Necessities
Limited value for ISVs to build
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ISVs are experiencing more challenges and burdens managing their own infrastructure
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Choosing the right cloud platform is critical when expanding your business to the cloud and SaaS
Software+ Customer workflows
Core Competencies
Essential value for ISVs to build
Choosing the Right Cloud
Platform
Non-core, but Necessities
Limited value for ISVs to build
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Application
Architecture
Complexity &
CustomizationComplexity of solutions data layer/app layer
Core vs. new/extended solutions
APIsSolution integration: 3rd party solution integration, APIs support
Customization enabling partners
TenancySingle tenant vs. Multi-tenant
Operations Customer Needs & SLAReliability/Availability
Performance
Security/Compliance
Scalability
SupportEasy on-boarding
Service management: Provisioning, usage metering, billing
DevOpsALM
DevOps collaboration
Versioning
Business Model
& Strategy
Pricing /Cost StructurePricing model monthly, annually
Funding model: CAPEX vs. OPEX
Cost to scale (COGS)
Target MarketTarget market and geo presence, expansion
Macro environment data sovereignty, regulatory compliance
Channel model
Business GoalsCloud First or Cloud Both strategy
Grow organic or through acquisition
Funding get sold, get invested
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Hybrid Cloud: Across On-Premises, Managed Hosting, and Public Cloud
80% of SaaS ISVs are self-hosted today Key Drivers
< 2%Cloud-based infrastructure
(Public Cloud)
Fast time to solutions, rapid deploymentfor new services
Global reach with broad geo coverage
18%Enhanced Managed Services
and Hosted Managed Services
Delegate operations and infra management to capable managed hosting partners
39% Co-location Specific geo coverage or local presence while
maintaining operational control to meet customers expectations and SLA
Infra HW operational efficiency
41% ISV On-premises Complex solution architecture and customization
Full operational control to meet customer expectations and SLA
Cost to scale. CAPEX funding model
Source: IDC Direction 2014, Transformation Everywhere How SaaS Gets Built, March 2014
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Complete Hybrid Cloud Platform
ONEConsistent Cloud Platform to Support ISVs Business Needs
< 2%Cloud-based infrastructure
(Public Cloud)
18%Enhanced Managed Services
and Hosted Managed Services
39% Co-location
41% ISV On-premises
Source: IDC Direction 2014, Transformation Everywhere How SaaS Gets Built, March 2014
Microsoft Cloud OS
Customer
ServiceProviderMicrosoft
ConsistentPlatform
ONE
Allows ISVs to expand SaaS business seamlessly with a consistent hybrid platform
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The Platform for Your SaaS Business
Common Identity
Integrated Virtualization
Data platform
Multi-Tenant
Flexible Deployment
Microsoft
On-PremisesService
Provider
One
Consistent
Platform
Deliver a consistent platform to run your applications across on-premises, Microsoft public cloud, and service providers cloud
Unified Management
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Grow your business with Microsoft no matter where you start
Service ProviderMicrosoft Azure Develop Deploy Manage Monitor
On-Premises
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Designed for Cloud Applications
Windows Server 2012 R2
Web Applications Remote Desktop Services
Networking Storage Management Active Directory
Virtualization with Hyper-V Multi-Tenancy Availability / Scalability / Security
System Center 2012 R2
Service Provider Foundation API
OS & Application Monitoring
Automation & Self-Service
Infrastructure Provisioning
Foundation for Hosting Service Provider Offers
ISV Control Panels Custom Control Panels Service Management Portal
Service Management API (REST OData)
Compute Storage (File/Block) Network
Application Hosting
(SaaS/PaaS/IaaS)
Desktop Hosting
through RDS
Windows Server 2012 R2 Provides the comprehensive, highly scalable platform
System Center 2012 R2 Provides the cost efficient, unified
management platform
Windows Azure Pack & Service Provider Foundation APIProvides standard management API
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24 x 7 x 365 1 billion 20 million 76
280 years
$
$
$
Rp
TL
chf
krkr
$R$
$
-
June 2013
250,000
50% of the Fortune 500 companies
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Dynamics CRM serves over 3.5 million users
Nearly 50 million Office
Online users
-
Contextual awarenessKey app adoption
Data
Azure
-
.NET
Hyper-V
Visual Studio
System Center
Active Directory
Programming languages + tools.NET, Visual Studio, TFS + Git, Java, NodeJS, PHP,
Python, Ruby, C++
Microsoft cloud infrastructure
Web
Mobile
Gaming
Cloud services
Data Analytics
Media
Identity
IaaSWindows VMs
Linux VMs
Storage
Networking
PaaS
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Regulatory compliance is a feature set of O365, Azure and CRM Online. Microsoft continues to adapt and evolve in building regulatory compliance features into our services
No other cloud provider offers the breadth of regulatory-related and other trust features across cloud platforms
Routinely collaborate and seek input from regulators to validate our approach
Microsofts services are engineered to help customers to meet their regulatory compliance needs
Microsoft is a thought leader and innovator in the cloud on regulatory compliance
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Standard process for development of secure software
International standards
ISO 27034-1
Comprehensive application security program
Flexible controls, measurements and
secure coding requirements
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Data security
Lock box processes for Encryption at rest protects data on Microsoft servers
Encryption in transit with SSL/TLS protects data transmitted between customer and Microsoft
Threat management, security monitoring, and file/data integrity prevents or detects any tampering of data
Physical security
24-hour monitoring of data centers
Multi-factor authentication, including biometric scanning for data center access
Internal data center network is segregated from the external network
Role separation renders location of specific customer data unintelligible to the personnel that have physical access
Logical security
Lock box processes for strictly supervised escalation process greatly limits human access to data
Servers run only processes on whitelist, minimizing risk from malicious code
Dedicated threat management teams proactively anticipate, prevent and mitigate malicious access
Port scanning, perimeter vulnerability scanning, and intrusion detection prevent or detect any malicious access
Admin and user controls
Rights Management Services prevents file-level access without the right user credentials
Multi-factor authentication protects access to the service with a second factor such as phone
S/MIME provides secure certificate-based email access
Data loss prevention prevents sensitive data from leaking either inside or outside the organization
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Remaining competitive
Staying focused
Reducing costs
Managing datacenters
Security, privacy & continuity
Embracing globalization
Improving free cash flow
Boosting capital value
Top of Mind Issues for ISVs
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ISVs Must Think Differently for the Cloud
Financial MetricsChurn RateCash flow and cost of saleCustomer Lifetime ValueCommitted Monthly Revenue
Sales & MarketingLicensingCustomer Acquisition and Cost of SaleTry before Buy Click, Try, BuySales CycleReferral Programs
Distribution & SupportDelivery rhythmChannel DynamicsService Level AgreementsSupportBilling
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A Different Economic Calculus
Large upfront fees replaced by smaller ongoing
payments collected and recognized over time
Cost of sale has to be managed very carefully
Ongoing cost associated with application delivery
Upfront investments in R & D, sales, marketing
and support with no immediate payback
Capital markets that assume exponential
customer adds and reduced acquisition cost at
the margin
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New Financial Drivers
Source: Bessemer Venture Partners: 10 Rules Of Cloud Computing And SaaS
CMRR
C-PIPE
CAC
Cash Flow
Churn Rate
CLTV
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Source: David Skok, Matrix Partners
Assumptions 5-year model
$10k bookings in month 1
$2k monthly growth
5-year impact At 2.5% churn, $(64,000)
At 5% churn, $(90,000)
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Source: David Skok, Matrix Partners
Assumptions 5-year model
$10k bookings in month 1
$2k monthly growth
Expansion revenue of 2.5% to current customer base
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Managing churn
Increase stickiness
Track and react to customer engagement
Contact your customers
Put top sales talent on cancellations
Consider longer-term contracts
Track and react to churn
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Traditional Sales Process: Sales Led, Sales Driven
Steps in Sales Process How is this Done? Steps in Sales Process How is this Done?
Cloud Sales Process: Customer Led, Support Driven
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Business Value For ISVs
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Pay as You Go
Enterprise Agreement
Open LicensingResell Azure and maintain direct
customer relationships
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Using Azure IaaS to support easy trial of existing click-wrap software
Dynamics CRM as a unified customer and app instrumentation platform
Azure as a low cost data distribution & storage platform
Augmenting existing apps with cloud based instrumentation and analytics
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iQmetrix uses a software-as-a-service model to deliver innovative
marketing solutions to the retail industry.
By using Microsoft Azure to host its newest product, iQmetrix was able to
use the MongoDB to achieve faster time-to-market, instant global
scalability, and IT infrastructure cost reductions of 30 percent.
iQmetrix can now focus on what it does bestdevelop great retail solutionsand give customers better solutions at a lower cost than the competition.
Partner Success Story: iQmetrixISV Speeds to Market, Trims Costs 30 Percent by Using Open Source Tools,
Cloud Delivery
By using Microsoft Azure, our developers could use the software they already knew and felt was best for the jobopen source MongoDBto get our enterprise product to market in just six months.
Anne WeilerVice President, Marketing, iQmetrix
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ACCEO wanted to offer its accounting software as a service, and Oriso
wanted to help independent software vendors (ISVs) deliver solutions as
online services.
The companies partnered to deliver ACCEO solutions using an Oriso
hosted service called iGOcloud, based on Microsoft Cloud OS.
As a result, ACCEO can enhance its offerings, lower costs, and compete
more effectively, while Oriso broadened its market and revenue
opportunities.
ACCEO with OrisoHosting Specialist Helps ISV Bring Existing Applications to the Cloud
With Microsoft Cloud OS and iGOcloud, we can offer our customers SaaS solutions with the same interface and business logic as our locally installed software. That saves us money and differentiates us from our competitors..
Etienne Soucy, Product Owner, ACCEO Solutions
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SaaS provider to large retailers
wanted to increase inventory
availability refresh speed to improve
customer satisfaction
Increased sales with greater throughput and improved
customer satisfaction with SQL
Server 2014 In-Memory
7x faster performance enables near real time inventory updates
7x Faster Performance Enables Real Time Updates