US ISV and Application Builder partner lead
Profitability is the cornerstone for partner growth, valuation, and longevity. Building and sustaining profitability continues to be top of mind for partners as cloud momentum and cloud spending increase and more cloud opportunities open up.
If you’re making the move to a cloud-oriented practice, Microsoft has a wealth of resources that can help you build an optimized cloud strategy, following these tenets: creating scale, developing focus, increasing value, and creating stickiness. We can help you determine what strategic investments and decisions to make, and where to focus your time and effort. Our resources are based on what we have learned about what contributes to the success of a cloud partner. For example, when we look at what partners are earning in gross margins across product, project services, managed services, and packaged IP (intellectual property), it turns out that managed services and packaged IP provide a higher return, and offer a partner recurring revenue. So, in our partner profitability resources, we emphasize the importance of those two partner business models.
In my previous “Fall in love with profitability” post, I outlined four tools you can use to get started quickly with the cloud. For this post, I created an A–Z guide to terms, concepts, tools, and resources that apply to building and sustaining profitability in your partner business. I hope it will give you some ideas and inspiration as you being to work on your cloud practice.
Profitability will be a theme throughout the content and experiences at WPC 2016 in Toronto this July. Over the next several weeks, as we approach the conference, look for announcements about new resources and updates to existing resources.
A–Z guide to partner profitability
Cloud adoption is achieved when customers use the service on a regular basis, realize the value of the service, and the service becomes critical to their daily lives and work. By focusing on adoption, you can increase customer satisfaction, retention, and loyalty.
Document your cloud plan using this template, which guides you through the key elements: differentiation strategy, target market, sales, marketing, delivery, financial projections, capital requirements, and risks and mitigation. Seeking outside investment? This template was designed with that in mind.
This program is part of the evolution of Microsoft Volume Licensing. Through the Cloud Solution Provider program, you can own the end-to-end customer engagement and directly provision, bill, and support Microsoft cloud services.
As the IT buyer changes, a solid digital marketing plan is critical for your business. The Smart Partner Marketing website provides insights to how cloud customers buy, lets you assess your current marketing strategy and identify new opportunities. You can start changing your approach today by using the ModernBiz resources.
One of the most valuable, yet underutilized, benefits of the Microsoft Partner Network is the opportunity to find partners that offer solutions complementary to yours. Engage with other partners through the P2P Networking Yammer network.
Utilize the FastTrack web experience to work closely with Microsoft and offer a richer onboarding experience to your customers. Customers that have a plan for using the cloud services they’ve purchased are generally more satisfied. You then have more opportunities to deliver high-value services such as business process consulting, managed services, Line of Business integration, and app development.
Your profit margins will grow as your recurring and/or annuity revenue streams grow. Moving your project-based services to a recurring revenue model, offering managed services, and packaging up your intellectual property are all good ways to build those revenue streams for growth.
- Move project-based services to a recurring revenue model
- Offer managed services to earn more revenue
- Develop and deploy intellectual property (IP)
We have moved from explaining “why cloud” to addressing “how cloud.” Businesses are grappling with bringing together existing on-premises investments with a cloud environment for greater speed, scale and cost benefits. In addition, customers want flexibility and choice in their cloud investments. Hybrid cloud has emerged to address these needs.
Sell what you know, and use Microsoft cloud services to run your business. Internal use benefits for Microsoft Azure, Office 365, Microsoft Dynamics CRM Online, and Windows 10 (upgrade only) are available to partners with an Action Pack subscription or competency. They give your organization firsthand knowledge of product features and capabilities. You can use your benefits for internal business use, customer demo, internal dev/test, and internal training.
Jen Sieger is one of our partner profitability experts in the Worldwide Partner Group, and along with Brent Combest, has written a terrific series of profitability-related blog posts. She has also worked with several successful cloud partners to document their best practices through guest blog posts, like this one from Dana Willmer of CloudSpeed, about building cloud market share.
By partnering with Microsoft to sell and deploy industry-leading cloud solutions, you can grow your business’ profits and unlock additional support, enablement, and incentives within the Microsoft Partner Network. The Microsoft Partner Network offers five performance-based competencies that align to four key areas of business (Microsoft Azure, Office 365, Microsoft Dynamics CRM Online, and Enteprise Mobility Management).
When you move your offerings to the cloud, acquiring new customers no longer means a big cash payout. Instead, you’ll want to form relationships with your customers that generate revenue steadily and over time.
Pinpoint will help you get your services, company in front of more customers, and you can submit apps to publish on Pinpoint and in other marketplaces, like Azure Marketplace, Office Store, and Windows Store.
To drive a high volume of sales, use question-based selling to identify the reasons a customer or lead should be disqualified. Find the “no” fast so you can get to to the next win.
Optimize your operations for profitability and growth. Sign up for a free 3-month trial of SLIQ, Service Leadership’s Cloud Business Transformation Tool. You’ll get an assessment of your business and receive prescriptive guidance for better operational effectiveness.
Many partners delivering cloud deployment and lifecycle services are benefiting from the designation of Digital Partner of Record. Microsoft knows that multiple partners are often involved in selling, deploying, managing, and supporting cloud services, and we’re opening up more ways for more partners to be recognized for their work with customers.
To build a successful cloud business, you’ll need the right sales structure and the right sales team in place to meet the demands of IT buyers in today’s rapidly changing marketplace, where consumers are more connected, more informed, and have higher expectations than ever.
Roadmaps for Office 365, the Cloud Platform, and Microsoft Dynamics CRM
Find out what’s available, what’s rolling out, and what’s in develop for Office 365 and the Cloud Platform, including cloud infrastructure, enterprise mobility, data management and analytics, application development, and Azure IoT Suite.
- Cloud Platform roadmap
- Office 365 roadmap
- Microsoft Dynamics CRM roadmap
- Microsoft Integration roadmap
Use this framework as a guide to cloud business growth and optimization. Start with the benchmark tool to assess the current stage of your cloud business and get recommendations and best practices for moving into the next stage of your practice.
The Partner Profitability learning path offers on-demand training for business owners that explains how business models correlate to profitability, how to optimize your cloud sales model, why developing Intellectual Property is key, and optimal marketing strategies.
The new Partner University is a training platform that lets you get the training you need on your terms. You and your employees can use Partner University to stay up-to-date and ahead of the ever-changing needs of the market and your customers.
A profitable cloud practice can help increase the valuation of your IT business. Use our profitability scenarios and financial models for guidance on the factors, variables, and scenarios you need to consider as you build your cloud offerings.
- Read the three-part part blog series about valuation by Brent Combest
Each year, we bring together partners from all over the world to connect with each other and with Microsoft. At the 2016 Microsoft Worldwide Partner Conference (WPC 2016), you’ll find out how to increase your profitability and company value by understanding and taking advantage of the many benefits of the Microsoft Partner Network.
X, Y, and Z
It’s the end of the alphabet, but it’s not the end of our discussion about profitability! Over the next several weeks, as we approach WPC 2016 in July, look for announcements about new resources and updates to existing resources.