US ISV and Application Builder partner lead
Profitability is critical to the long-term success of your business, but achieving and maintaining it can be difficult in a time of rapidly evolving technology. The cloud offers such a significant opportunity—IDC estimates that Public IT Cloud Services spending will reach $127 billion in 2018—that every partner company needs to assess its strengths and weaknesses, evaluate its current business model and strategy, and define its future in the cloud.
Where should you start? Microsoft has made partner profitability a priority, working with industry experts, establishing internal expertise, and asking our partners that are successful in the cloud to share their knowledge and best practices. You may not be aware of the tools and information we’ve made available to partners. Below, I’ve provided you with four steps that explain tools that I think provide the most value to partners, particularly if the cloud is a new part of your business.
Step 1 – Assess your cloud business maturity
Download the SureStep Profitability Benchmark Assessment Tool, and answer the questions in the Assessment Questionnaire tab. Then, use your results to identify the right guidance and best practices for your business, using the SureStep Profitability Benchmark Playbook that’s included in the assessment tool.
Start here to assess your business (download)
Step 2 – Establish a strategy for differentiating your business
The profitability series on the MPN blog addresses the considerations businesses must make to move toward profitability, including the need for differentiation or specialization. One way to protect your price points and margins is to identify verticals or industries to target. Another way is by developing and deploying intellectual property (IP). The Partner Profitability learning paths provide an in-depth look at business considerations and key concepts.
Step 3 – Define your cloud offering and create a financial model
The most common request from partners with regard to profitability is for help understanding the business and financial models that apply to the cloud. We have 20 scenario overviews and financial models that can help you build business cases for new practices, recognize how to maximize profitability by adjusting key inputs and “what if” scenarios, and understand what Project Services, Managed Services, and Intellectual Property other partners are bringing to market.
Step 4 – Build your cloud business plan
Now it’s time to put the preparation you’ve done in Steps 1–3 to good use. Document your cloud business plan using our template. The template helps you organize each element: differentiation strategy, target market, sales, marketing, delivery, financial projections, capital requirements, and risks and mitigation. If your business is seeking outside investment to support your plan, your completed template can serve as a key document for raising financing.