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Business Builder For Cloud Services-Small Business
Business Builder For Cloud Services-Small Business
Business Builder For Cloud Services-Small Business
This guide is primarily for partners that serve small-business customers with:
Partner-serviced IT (no internal IT staff) 1-200 employees Limited IT security/identity management A limited web presence Basic online business productivity services such as email, voice, storage, customer relationship management (CRM), accounting, and tax services. Mobile phones
This guide includes business opportunities for the following Microsoft cloud services:
Windows Intune Microsoft Exchange Online, Microsoft SharePoint Online, Microsoft Office Communications Online, and Microsoft Office Windows Azure, Microsoft SQL Azure, and Live Meeting Windows Azure platform AppFabric Microsoft Dynamics CRM Online Windows Server 2008 R2 with Hyper-V technology Hosted versions of Microsoft Exchange Server, Microsoft SharePoint Server, and Microsoft Office Communications Server
You will find guides that address other customer scenarios, such as medium business, enterprise, and public sector, at https://partner.microsoft.com/cloudservices
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Reselling to Small Business Customers Servicing Small Business Customers Developing for Small Business Customers Hosting Services for Small Business Customers
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Making the Transition to Cloud Services
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Understanding the Impact of Cloud Services Making the Transition to Selling Cloud Services
Calls to Action
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Opportunities in Other Customer Segments Opportunity Overview for Resellers Opportunity Overview for Systems Integrators Opportunity Overview for ISVs Opportunity Overview for Hosting Providers
https://partner.microsoft.com/cloudservices
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Executive Summary
This guide is designed to provide partners with an overview of the cloud services opportunity in the small business market and the specific opportunities available to them. It covers the following topics:
Business models and cloud revenue opportunities in the small business market
Small businesses are increasingly shifting parts or all of their IT to the cloud. By mid-2011, up to two-thirds of small businesses are expected to use some form of cloud service. By 2014, IDC expects the overall market for public IT cloud services to be worth over U.S.$55 billion, which is more than three times the 2009 estimated market worth of $16.5 billion.1 This IT transformation represents a huge market opportunity for partners, but it also
Small Business Market
necessitates some changes in the way that you package, sell, resource, finance, and manage your business. This guide includes action plans as well as resources that will help you launch or enhance a cloud services practice. Throughout this guide, small business refers to businesses with partner-serviced IT (such as businesses without internal IT staff) and approximately 1200 employees.
https://partner.microsoft.com/cloudservices
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Small business customers present a compelling opportunity for partners that offer cloud services.
According to a study conducted for Microsoft by the Institute for Partner Education and Development, by mid-2011, as many as two-thirds of all small businesses are expected to use some form of cloud service, depending on the market.2 Small-business customers have many of the same basic IT needs as larger customers, such as communication, security, reliability, storage, and desktop management. However, small businesses lack the resources of larger organizations, so they have a limited ability to make major capital investments in IT.
This discrepancy between IT needs and resources provides partners opportunities to sell cloud services for a number of reasons:
Lower initial capital Cloud services virtually eliminate the need for large infrastructure investment, allowing smaller costs and predictable customers to obtain IT services without major capital expenditures. And because cash flow is a top recurring expenses concern for many of these organizations, small businesses are ideal candidates for prepackaged cloud solutions offered at predictable monthly rates. Greater agility and The cloud provides greater agility and scalability to adapt to changing workloads and needs with scalability high availability and quicker deployment. Enhanced ability to focus Because cloud services generally result in lower IT expenses and greater capabilities, they allow on other strategic initiatives businesses to place more focus on strategic initiatives. Access to enterprise-class Cloud services provide small business customers with access to enterprise-class software that was software and capabilities previously out of reach due to the financial and management resources required.
Small Business Market https://partner.microsoft.com/cloudservices
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Many small businesses with partner-serviced IT have already adopted hosted email or cloud-based web conferencing solutions, but they have yet to realize the full potential for integrating cloud services into their existing IT infrastructure, or replacing it wholesale with cloud services. There is growing demand for cloud services in this market in a number of areas, which include:
Hosted email migration
At the lower end of the small-business segment, most businesses are already using a hosted email solution. Here, partners have the opportunity to provide a Microsoft hosted offering for customers looking for enterprise-class email capabilities. Because many customers have hosted email solutions from local, smaller hosters, partners can focus on the value and expanded capabilities available through Microsoft Exchange Online and Microsoft Exchange Hosted Services.
The cloud also opens up opportunities to up-sell customers from earlier Windows and Microsoft Office versions to the most current versions, along with cloud innovations such as Windows Intune or Microsoft Office Web Apps.
https://partner.microsoft.com/cloudservices
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Many Microsoft partners play multiple roles when serving their clients, bringing together sales, support, application development, and IT expertise.
To take full advantage of the cloud opportunity, partners may want to consider expanding their roles into new service areas. For example, systems integrators that have traditionally focused on application development may offer deployment and migration services, and infrastructure-focused systems integrators may expand into developing repeatable intellectual property (IP) with the Windows Azure platform. Regardless of business model, there are opportunities specific to the area you focus your business on. For example, all partners that register to resell Microsoft Online Services are eligible for reseller commissions of 12 percent for new subscriptions and 6 percent for recurring revenue. The evolution and growth of cloud services will offer partners even more ways to expand their businesses and better serve their customers. The following table provides an overview of business opportunities, suggested investments by partners, and a high-level summary of how Microsoft supports its partners in the cloud.
Business Opportunities
Partner Investment
Marketing funds Cloud skills development Revised compensation models Hands-on experience
Microsoft Support
Marketing air cover Internal user rights (IUR) Pre-sales and deployment support Pre-sales training
Sell Solutions
Recurring revenue Packaged solutions Expanded services New markets and customer segments Repeatable IP Faster deployment Migrate solutions to the cloud Scale users Faster, less costly testing Extended and customized cloud offerings
Build Solutions
Shift investments from technical infrastructure to marketing/sales skills Rethink marketing mix Grow channel by selling through online application marketplaces
Market development Marketing tools Pre-sales and deployment support Pre-sales training
Host Solutions
Following is a more detailed list of opportunities in the small business market by partner business model. For an overview of opportunities available to partners serving other customer segments, please see the Opportunities in Other Customer Segments section later in this guide.
Small Business Market https://partner.microsoft.com/cloudservices
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For every $1 we sell in Microsoft Online Services, we envision up-selling at least $5 of added services.
-Andrea Giordano, Business Manager, Solvi
https://partner.microsoft.com/cloudservices
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Over 2009, about 5 percent of all revenues came from cloud services. We expect this to grow to 15 to 20 percent of our total revenue.
-Danny Burlage, Chief Technology Officer, Wortell
https://partner.microsoft.com/cloudservices
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With Windows Azure, it took two developers only two days to migrate our existing application to the cloud.
- Edmund Gray, Lead Developer, TradeFacilitate
Repeatable IP
E-commerce packages for online sales using Windows Azure platform AppFabric. Off-the-shelf applications with standardized pricing on Windows Azure. Standardized multitenant SaaS applications for hosting providers on the Windows Azure platform.
https://partner.microsoft.com/cloudservices
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https://partner.microsoft.com/cloudservices
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The cloud services transformation represents a major opportunity for partners; however, you must also rethink the way that you package, sell, resource, finance, and manage your business.
Successfully adding cloud services to your portfolio of offerings requires careful planning, combined with your experience and knowledge about your customers and their needs. The following provides an overview of key considerations for partners developing a cloud services business.
Compensation
Partners should evaluate their compensation plans and consider making changes to align them with cloud services. Some of the benefits of selling cloud services may include greater sales velocity, shorter sales cycles, additional services opportunities, and multiple-year annuity commissions. Challenges may include lower commissions for the initial transaction, and potential differences in the timing of compensation payments. As cloud services shift payments from one-time, up-front lump sums to recurring revenue streams, cash flows will change. Establishing a financial plan based on your cloud services strategy of choice is a foundational element of a cloud services business. Instead of focusing on customized consulting and resource-intensive sales processes, partners should consider offering standard, repeatable solutions that are sold via telesales and other methods that offer broad reach at low cost. Similarly, a rate-card approach enables greater scalability than custom pricing. The key to a successful cloud services practice is to provide services that add business value. If you have not established a value-added services practice, it will be important to identify and build the skills and capabilities necessary for providing cloud services. Partners that already offer value-added services can make use of and augment existing skills to build a cloud services business. There are a number of ways that partners can deliver cloud services. For example, you can offer standard packages of services (managed services) around Microsoft cloud solutions to keep your overhead cost low while building recurring revenue streams. Another way to increase revenue is through vertical integration, by offering additional value-added services such as outsourced solutions, where you manage cloud-based IT infrastructure on behalf of customers. Partners can also offer services that span delivery mechanismsfor example, partners can offer managed services as an add-on to outsourced solutions.
Cash flow Scalable sales and pricing New skills for value-added services Delivery mechanisms
https://partner.microsoft.com/cloudservices
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This section offers a few recommendations and Microsoft resources to help you launch a cloud services practice.
Identify the Microsoft cloud services that are relevant to your business. Define your cloud services strategy around your core competencies; explore shifting and expanding your competencies to meet customer needs around cloud services. Define solutions offerings and be able to articulate their value to both IT and business decision-makers. Identify efficient ways to deliver your solutions, such as managed services and outsourcing.
Based on the cloud services strategy you choose, evaluate the available skill set and identify gaps to ensure that you have the appropriate resources to successfully execute your cloud services initiatives. Go to the Microsoft Learning Plan Tool to identify and enroll in sales and technical training.
https://partner.microsoft.com/cloudservices
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Get started
Subscribe to the Microsoft Cloud Essentials Pack which includes resources to help partners learn about, develop and sell cloud solutions. Find out more about Microsoft Cloud Accelerate, an exclusive program for partners that have a proven track record of delivering Microsoft cloud solutions. Use the Microsoft Platform Ready program and visit the Windows Azure Partner Hub. Deploy the no-cost version of Microsoft Online Services for internal use that is offered to all Microsoft Online Services partners.
Use the Partner Profitability Modeler Tool to customize financial models and determine your return on investment (ROI) for Microsoft Online Services and Microsoft Dynamics CRM Online. Use the Windows Azure Platform TCO Analysis tool to evaluate platform configurations and quantify the costs of platform and on-premises application delivery.
Build a foundation
Establish a dedicated cloud services practice with strong leadership. Define solution offerings and be able to articulate their value to IT and business decision-makers. Learn about how to activate customers and more with the Microsoft Online Subscription Program Guide for Partners. Develop a stable, repeatable, branded methodology for customer on-boarding and for building customer loyalty. Create cloud contracts and service-level agreements (SLAs). Assess your sales compensation plan. Plan for long-term customer relationships with strong account management.
https://partner.microsoft.com/cloudservices
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Invest in efficient marketing and demand generation by using tools such as search engine optimization (SOE) and telesales to minimize your customer acquisition cost. Provide sales and technical staff with ongoing training. Establish a customer trial management plan to drive a high conversion trial-to-paid conversion rate. Maintain customer relationships to build repeat and referral business, including defining a customer lifecycle engagement plan to increase retention rate and reduce customer churn. Promote your solutions, applications, and services on Microsoft Pinpoint.
Consider repeatable sales models with a rate-card approach such as the following example to reduce sales cycles and foster transparency:
Advanced Package
Order on Behalf, Provisioning/Deploy, Monitoring, Online Training (per seat/month)
Premium Package
Order on Behalf, Provisioning/Deploy, Monitoring, Online Training, Control and Compliance (per seat/month)
https://partner.microsoft.com/cloudservices
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The table below summarizes key actions that partners can take to build a successful cloud services business.
Reseller
Resell Microsoft Online Services, Microsoft Dynamics CRM Online, and Windows Intune. Leverage up-sell and cross-sell opportunities (sell Windows Intune with Windows 7; resell Microsoft Online Services with Office 2010 and Office Web Apps). Package Windows Intune, Microsoft Online Services, and Microsoft Office in standard quantities as packaged solutions for repeatable sales. Increase focus on customers with shorter sales cycles. Build and expand telesales and online marketing efforts with low customer acquisition cost. Integrate annuity revenue streams into planning and sales compensation.
Systems Integrator
Create a cloud migration offering for the solutions you currently offer. Develop a rate card with by-person and by-seat engagements for deployments to Microsoft Online Services. Build a base of employees with expertise in cloud development, identity, and security. Align resources to support managed services contracts based on Windows Intune. Provide Core IO and BPIO offerings built on Microsoft Online Services. Migrate existing applications to Windows Azure and SQL Azure. Train staff not to distinguish between on-premises and cloud solutions, but rather to advise customers on the best solutions for their needs.
Hosting Provider
Offer a wider range of hosted solutions such as Exchange Online, SharePoint Online, and Office Communications Online. Move further up the value chain to offer solutions such as data center consolidation and disaster recovery. Create and sell new packaged offerings. Market to developers looking for an on-demand development environment.
https://partner.microsoft.com/cloudservices
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The following resources provide more information about Microsoft cloud solutions and Microsoft partner support.
The MPN cloud landing page provides access to cloud services training and readiness resources. Microsoft Online Services is a family of services, also available as standalone software, for communication and collaboration. Microsoft Exchange Online delivers email with protection, plus calendar and contacts. Microsoft SharePoint Online creates a highly secure, central location for collaboration, content, and workflow. Microsoft Office Communications Online provides real-time, person-to-person communications through text, voice, and video. Microsoft Office Live Meeting delivers hosted web conferencing. Windows Intune delivers cloud-based PC management and security capabilities. Microsoft Dynamics CRM Online streamlines customer relationship management, and delivers results through the browser. Microsoft Office Web Apps allows access to documents from virtually anywhere. The Windows Azure platform supports applications, data, and infrastructure in the cloud, giving institutions the flexibility to run applicationsor just store code or datain the cloud, on premises, or with a combination of both. The platform also includes Microsoft SQL Azure technology platform, a cloudbased relational database service built on Microsoft SQL Server that offers highly available, scalable, multitenant database services. Software developers can use Windows Azure Tools for Microsoft Visual Studio to create, configure, build, debug, and run web applications and services on Windows Azure. Windows Azure platform AppFabric, formerly known as Microsoft .NET Services, makes it simpler for developers to connect cloud services and on-premises applications.
Additional Resources
The recurring revenue stream we gain from selling [Microsoft Online Services] provides an income without associated cost of goods. Its pure profit for us that we would otherwise not have seen. We can use this recurring income to invest in geographic growth, or to grow into new lines of business. Thats critical for companies like ours that rely on so heavily on profit to fuel our growth.
-Todd Golden, Director of Alliances, PointBridge
https://partner.microsoft.com/cloudservices
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The following table provides a high-level overview of the opportunities available by partner type beyond the small business customer segment. Opportunities differ depending on the markets you serve, but there is potential to increase revenues, grow market share, and develop competitive offerings across each market segment.
https://partner.microsoft.com/cloudservices
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IT services out-sourced)
Target SharePoint Server and Exchange Server on-premises deployments to Microsoft Online Services. Enable new scenarios such as deskless workers with Microsoft Online Deskless Worker Services. Sell subscriptions to cloud-based LOB applications built with Windows Azure.
Resell Microsoft Online Services and Windows Intune and earn a one-time commission of 12% on all net new seats, as well as 6% on recurring subscriptions. Add or attach Windows Intune to Core IO managed services offerings and Windows 7 upgrades. Offer value-added BPIO solutions on top of Microsoft Online Services such as SharePoint Online document management monitoring.
Public Sector (Education, government, healthcare, public safety, and national security)
Resell Microsoft Online Services and Windows Intune to government entities. Use Microsoft Learning Suite to up-sell Office 2010 and Office Web Apps. Pitch cost-saving, green IT solutions based on Microsoft cloud services. Up-sell Microsoft Online Services to schools and universities that have deployed Live@edu. Offer solutions for deskless healthcare workers with Microsoft Online Deskless Worker Services.
https://partner.microsoft.com/cloudservices
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IT services out-sourced)
Deploy custom workflow automation applications based on SharePoint Online. Migrate Salesforce.com CRM to Microsoft Dynamics CRM Online. Package train the trainer sessions for internal IT staff who manage hybrid environments.
Public Sector (Education, government, healthcare, public safety, and national security)
Rationalize identity across multiple services and properties for educational institutions. Provide provisioning and migration services for government public cloud solutions. Integrate educational management solutions with Live@edu. Plan for and manage compliance issues around healthcare data privacy regulations. Customize partner-hosted private cloud-based email, messaging, and collaboration services to ensure compliance with data sovereignty requirements. Provision and migrate Microsoft Online Services for government cloud solutions. Offer integration services for applications built on the HealthVault platform.
https://partner.microsoft.com/cloudservices
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New applications and solutions and rapid development with repeatable IP opportunities
IT services out-sourced)
Create additional tools such as alerts for Microsoft Online Services. Build SaaS LOB applications built on Windows Azure.
Develop network monitoring and tracking tools. Develop customized interfaces, tools, and add-on functionality such as alerts for Microsoft Online Services. Integrate on-premises applications with social media tools using Windows Azure platform AppFabric.
Public Sector (Education, government, healthcare, public safety, and national security)
Use Live@edu services as the communication infrastructure for education solutions. Build learning analytics and education IT solutions on Windows Azure. Develop solutions based on the HealthVault application platform. Build government solutions on the Windows Azure platform such as emergency responder dispatch systems and geospatial mapping solutions.
https://partner.microsoft.com/cloudservices
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IT services out-sourced)
Offer burstable capacity and backup services with SQL Azure on-demand provisioning.
Offer standardized versions of LOB applications built on Windows Azure. Create virtual data centers and deliver a seamless IT infrastructure across multiple geographies using Windows Server 2008 R2, SQL Server 2008 R2, and System Center.
Public Sector (Education, government, healthcare, public safety, and national security)
Build and host highly secure private clouds for governments in compliance with data sovereignty requirements. Offer private cloud hosting for pooling shared services among related agencies and jurisdictions. Host messaging and collaboration applications for governmental organizations. Host learning gateway solutions combined with Live@edu services. Offer vertical education and healthcare applications built on Windows Azure.
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IDC, Worldwide and Regional Public IT Cloud Services 20102014 Forecast, Doc #223549, June 2010. IPED: Cloud Adoption Study, March 2010. Microsoft. 2010 SaaS Workload Study. May 2010.
https://partner.microsoft.com/cloudservices
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