TSW Keynote Preview - Winning in the Cloud Economy
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Transcript of TSW Keynote Preview - Winning in the Cloud Economy
Winning in the Cloud EconomyKeynote Preview
Thomas Lah, Executive Director, TSIA
"I skate to where the puck is going to be, not where it has been.” - Wayne Gretzky
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There are two mega-trends disrupting the business model of technology providers
4
Commoditization of feature functionality
Acceleration of new consumption models (technology-as-a-service)
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What does this mean for the tech industry?
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New business models are being created
New organizational
capabilitiesare needed
! !New offer types
are required
!
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The market forces in play point toward XaaS
Profitable Legacy Model
XaaS 2.0
Commoditized Legacy Model
XaaS 1.0
OEM Scenarios
Demand for New Consumption Models
Pro
fitab
ility
of
Cor
e O
fferin
g
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And we’re beginning to see a positive shift in OI
Gross Margin S&M G&A R&D OI-20%
-10%
0%
10%
20%
30%
40%
50%
60%
70%
80%68.0%
38.8%
16.4% 18.4%
-6.5%
68.1%
36.3%
16.3% 18.1%
-3.8%
Cloud Business Model Performance
Q1 2015 Q1 2016
Source: TSIA Cloud 40 Q1 2016
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But only 10% of companies have successfully made the transition to profitable XaaS
10% 10%
60% 20%
OEM Scenarios
Demand for New Consumption Models
Pro
fitab
ility
of
Cor
e O
fferin
g
OEM Scenarios
Why aren’t we already there?
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The XaaS profile drives decisions in three areas
Introducing the Iron Triangle
Portfolio& Pricing
Customer Engagement ModelFinancial Keys
Portfolio& Pricing
Clearly define your XaaS offer and how it should be priced
Work through each phase of the customer engagement model for your XaaS offer
Customer Engagement Model
Create the parameters for how success will be measured for your XaaS offer
Financial Keys
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What other plays should you run to grow a profitable subscription business?
www.tsia.com
Play #1: Register to the conference and join us in San Diego
The book that will help guide your decision-making and execution around the “as-a-service” model to put your company on a path to profitable growth.
Play #2: Grab a free copy of TSIA’s new book
Winning in the Cloud EconomyMay 2, 2016 | 2:00 PM
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Play #3: Attend the full keynote presentation
Presented by Technology Services Industry Association
www.technologyservicesworld.com