By now, you have a ton of information that Matt and I have shared over the last couple of weeks to get started in building an Azure practice. Most recently, Matt has written about building out a foundation of technical skills and then how to keep sharp. For today, let’s get into the business side of building an Azure practice.
As you build out your Azure practice, you’ll certainly settle on one or maybe a couple of solution areas to start with. Once you’ve mastered that one or two, then begin building out your portfolio of offerings to customers. But let’s talk about the business value of moving to the cloud.
If you can’t clearly articulate the value, then there’s a very good chance your customer will continue as they have and won’t move…that is, until someone else comes along who CAN clearly articulate the value. By then, you’ve lost a customer. I’ve seen it happen way more times than I can count, honestly.
As we begin talking about business value, the first thing to cover off on is that you don’t sell Azure to your customers by itself. You need to sell a solution that has business value. That solution just happens to be “powered by Azure”. Ok, now we’re ready…
Let’s start with business benefit #1: Faster Deployment of New Business Capabilities
For SMB organizations to be successful today, they need to be agile and adjust quickly to changing business and economic climates. There just isn’t time to delay implementation of technology that delivers new capabilities and business value. The wait for quoting, ordering, shipping, building, and deploying new hardware and software is often several weeks or longer. Or you can spin up that solution in Azure and be operational by measuring the deployment in hours instead of weeks.
By adding some numbers in the equation, we can make this a little more real. Let’s make an assumption that at our fictional SMB company, Contoso, our average fully loaded cost of an employee who will utilize this new business capability is $60,000/year. Fully loaded cost includes all base compensation, incentives, and benefits. There’s roughly 2,080 work hours in a year (52 weeks x 40 hours). Subtract out 80 hours for vacation, and another 80 hours for holidays, and we’re left with 1,920 workable hours. Dividing $60,000 by those 1,920 hours, gives us an employee cost of $31.25/hour, fully burdened.
Let’s say Contoso decides to deploy an on-premises solution, and the process for quoting, ordering, shipping, building, and deployment takes 4 weeks. Without counting any of the costs for the hardware that Contoso is buying, the cost in lost productivity waiting for the new on-premises solution to be built in those 4 weeks is $5,000 ($31.25 x 4 weeks x 40 hours per week). That’s $5,000 for EACH person whose productivity is lost during the waiting period.
If Contoso decides to deploy that solution in Azure, again just considering the productivity costs, we have a much different scenario. Given that the above scenario started with the purchase cycle and ended in deployment within a 4 week period, it’s fair to assume that the solution isn’t overly complex. Standing up an architecture in Azure doesn’t really take much time, but for sake of making the math easier, let’s assume that it takes an entire 8-hour day to spin up Contoso’s new environment and finish through deployment of the new solution. Contoso’s lost productivity for their employee is $31.25 x 8 hours = $250. Again, that’s for EACH person who’s waiting for the solution to deploy.
Without even considering the cost comparisons of the parts and pieces of the solution, whether on-premises or in the cloud, the difference in lost productivity amounts to $4,725 per employee using our simplistic scenario. For an SMB, this can become a significant cost in a very short time, especially if there are multiple people impacted during the waiting period. Imagine the lost productivity cost if the solution is more complex and takes longer to deploy!
Outside of productivity costs, we would also say that if a new business capability is being delivered, there’s very likely a business value that can be quantified. The new capability might be an improvement to an existing capability, or it could be a new capability altogether that drives a better business outcome. The business improvement that comes with deploying the new capability sooner will also have a measurable impact on the business, and Azure creates a great opportunity for the customer to realize that value more quickly.
As a Microsoft partner, your ability to deliver new capabilities to your customers sooner will drive increased revenues for you. Using the example above, this is your ticket to driving scale in your business. As you deploy the new business capabilities for Contoso more quickly, you can now target and add new customers into your book of business without the need to add to your deployment team. How many more customers could you add to your business if you could decrease the time spent on each deployment? The more customers you deploy, the more knowledge and expertise that you gain. That knowledge and expertise will then help drain costs out of your project work and allow you to show a greater profit margin on each subsequent project.
Deploy your solutions as a bundle, tied together with your managed services and custom intellectual property to create your secret sauce that differentiates you from any other Microsoft partner. Then continue to deliver customer value throughout the entire relationship to drive extravagant growth.
In the next post, I’ll share my take on the next business benefit: Lower-Risk Business Innovation
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Terry Stein, Azure Partner Channel Development Manager; @TerryStein_MSFT