By Stuart Nielsen-Marsh, Director of Microsoft Cloud Strategy, Pulsant
Serving more than 4,000 customers across multiple industries, Pulsant is one of the UK's leading providers of hybrid cloud solutions with a core focus on network connectivity, security and integration. The company operates an interconnected fabric between its 15 datacenters and other hybrid cloud services providers ensuring its customers have access to secure, high performance connectivity across the UK.
In the last 3 years, we have seen a significant shift in our customer base from colocation and managed hardware services towards cloud and public cloud services such as Microsoft Azure. This has threatened up to 10% of our customer revenue in the last 12 months. This will potentially increase over the next year, and Pulsant's exposure is likely to rise by approximately 15% over the same period. This is representative of customers adopting hybrid services and modern application led strategies and reducing IT assets.
Innovate and create, or lag behind
To survive this new era of public and hybrid cloud, we began a new partnership with Microsoft in the spring of 2016, driven by the synergy of Pulsant's hybrid (cloud) IT strategy in the mid-market and Microsoft's expanding cloud technology platform. The aim was to create a new Microsoft-based brand to deliver cloud solution offerings to our customers in the UK and beyond. A new brand that would transform the business, generating longer customer engagements and higher revenue returns.
The targets (all of which had to be achieved in less than a year):
- Achieve 25% of revenue from Microsoft CSP and Azure within 2nd year of launch
- Achieve £1-£1.5M in average order value (AOV)
- Identify and engage with 50 new customers
- Identify 5 Azure Stack customers in time for GA
While the adoption of Azure has provided significant opportunities, it also brought a lot of challenges - related less to the technology itself, touching more on the cultural and business alignment needed to realise these opportunities.
Perhaps the biggest challenge was recognising the wider business need to innovate through the adoption of Azure, or otherwise risk being left behind in the race against competitors. I needed to shift our sales team from traditional component selling and give them the tools to become competent cloud solution sellers, while the wider business aligned with this new sales direction and showcased the added value of the new proposition.
As it often proves true, harnessing the positive energy in the business and getting the right people on board has been crucial. We hired a dedicated Microsoft product and strategy expert and began seeking out and collaborating with different Microsoft teams in the UK and beyond.
The UK Cloud and Hosting Provider group and the UK Partner Marketing team, together with the channel executive (CE) and Partner Technical Specialist (PTS), helped analyse and choose the Azure solutions that were most appropriate for our existing skills and markets. The UK partner marketing team gave guidance and access to funding as we started to define our go-to-market requirements.
With the basic transformation and business plans in place, Pulsant reached out to a number of Microsoft groups worldwide that were offering focused GTM support and initiatives, including the Market Maker & Industry Marketing team, the Cloud & Hosting Provider team, the Cloud Infrastructure COE, and the Cloud & Enterprise Marketing team.
One of the key resources throughout the journey has been the Microsoft Cloud Playbooks - these playbooks are designed to maximise the potential of your business. They provide great 'how to' resources including how to:
- Accelerate and optimize your Azure practice in every phase.
- Drive new revenue opportunities, marketing strategies, and lead-capturing tactics.
- Gain access to the technical skills and resources that will keep your team ahead of what's next.
You'll also get answers to some of your biggest questions, such as:
- How do I determine what Cloud Solution I should offer?
- What kind of team and resources do I need to get started?
- How do I go to market with Azure?
- What do we charge customers? How do we charge them?
In the first month, Pulsant received requests for PoC's and conducted strategic level discussions with customers looking to utilise Azure, assessment services and their cloud solutions. These included enquiries from an independent online-only bank, one of the Royal HRM groups, a public services housing agency, a specialist in LOB oil and gas ISV looking to utilise massive hyper-scale compute services, a number of born-in-the-cloud analytics businesses and a number of basic migration opportunities of IaaS and PaaS services to Azure across the financial services and Fintech space.
Main outcomes include:
- Increased customer engagement opportunity, as well as longer engagement and higher revenue returns (up to 30%)
- Estimated revenue generation of £1 - £1.5M in the second year (currently standing at £650K in year 1)
- New cloud-focused sales force with relevant knowledge and skills related to Azure architecture and solutions
- Notable shift to managed services and cloud support skills, plus transformation to managed services and annuity of revenue streams
We have also begun to see:
- Increased ARPU & customer product consumption via cross-sell/up-sell from the Azure solution stack and O365
- Increased interest in managed services support
- The broadening of internal business horizons - looking beyond IaaS to PaaS and SaaS solutions
- A notable separation of Pulsant from other commoditized CSP competitors
- The development of new narratives regarding value and differentiation
- Benefits of having a deeper relevance to our customers, we are experiencing broader customer reach across previously untapped markets with potentially larger deals and higher margins.
We have already sold tens of thousands of pounds' worth of Azure and it's growing. Exactly as Microsoft hoped when it started the CSP program, it has enabled a traditional partner to evolve, adapt, move into new markets and offer new and more relevant services to its existing customers, while reaching previously unattainable customers and verticals.
Most strikingly, the cultural change within Pulsant has forced us to stop thinking about our customers and to think like them instead!
- Download and read the Cloud Infrastructure & Management Playbook (https://partner.microsoft.com/en-US/campaigns/cloud-practice-playbooks) as the first step in understanding the opportunity.
- Recognise the need for change and seek executive sponsorship
- Plan for differentiation, uniqueness is key
- Plan to create or retool and expand your cloud services to capture the massive opportunity that exists for Partners working with Microsoft. If done well, the rewards for partners will be significant and will include:
- Deeper Customer Relevance (gain trusted advisor status with your customers)
- Broader Customer Reach (engage in conversations with new segments)
- Larger Deals and Higher Margins (grow the revenue capture from new and existing clients)
- Higher Consumption (advance workloads that drive higher levels of cloud utilisation
- Focus on moving beyond just thinking about your customers and start thinking like them!
Stuart has real-world experience of developing and running cloud services businesses, as well as adoption, integration and strategy implementation, having been involved in various Cloud start-ups and projects in both enterprise and SMB companies. As a Microsoft Partner Executive, Partner Influencer and IAMCP mentor, Stuart is always happy to discuss planned cloud services strategies and to present or provide consulting in this area. Over the last 12 months Stuart has been driving Pulsant's Microsoft Strategy and leading the transformational changes required to become a Microsoft 'modern partner'.