CAPTURING THE SMB CLOUD OPPORTUNITY AND
UNCOVERING SECRETS FOR PARTNER PROFITABILITY
AMI-Partners546 Fifth Avenue, New York
New York, Houston, Singapore, Bangalore, Kolkata, London, Tokyowww.ami-partners.com
Source: AMI-Partners (www.ami-partners.com) 2014
AMI Background Capturing the SMB Cloud Opportunity Benchmarking Against Best-in-Class Cloud Partners Q&A
2
Agenda
Source: AMI-Partners (www.ami-partners.com) 2014 3
Actionable Global Market Intelligence, GTM Strategy & Implementation Support- 18+ Year History -
AMI Tracking Surveys Cover Countries Driving over 90% of WW SMB IT/Telecom Spending
(SB = 1-99 Employees, MB = 100-999 Employees)
SMB End User Tracking
Channel Partner Tracking
Global IT/Telecom Market Sizing
Actionable Market Segmentation Model & Predictive Analytics
Go-to-Market Consulting
Strong Global Presence Across Americas, Europe & APAC
AMI: Extensive Global Footprint
Source: AMI-Partners (www.ami-partners.com) 2014
We must understand SMBs’ needs, mindsets, and challenges: Internal Constraints: Managing Cash flow, Talent/HR, Weak Economy External Environment: Pricing/Competitive Issues, Response Time, Savvier
Customers Key IT Purchase Drivers: Affordable, Simplicity, Productivity, High Performing,
Ensure Customer Loyalty Position our solutions and messaging to address SMBs’ needs and
challenges.
How Can We Capture the SMB Opportunity?
SMB = Companies with 1-999 employees
Source: AMI-Partners (www.ami-partners.com) 2014
Concerned about economy
Conditions will improve
81%
23%
Economic Impact on Business
Slower receivables Decreased revenue Restricted cash flow Pricing pressure
49% 48%41%
27%
Business Pain Points
Improve customer experiences
Reduce costs
Expand into new mkts
Launch new products/services
Leverage more technology
51%
45%
27%
21%
17%
Actions Planned
5
U.S. SMB Perceptions & Pain Points
Source: AMI-Partners (www.ami-partners.com) 2014
Small Business Medium Business
Improving bandwidth
On-premise data back-up & disaster recovery solutions
On-premise data security & privacy for PCs/network
Security for mobile devices
Data Loss Prevention (DLP) solutions
CRM (Customer Relationship Management)
Hosted data back-up & disaster recovery solutions
71%
59%
45%
40%
39%
37%
37%
ApplicationsConnectivity/
CommunicationsIT Infrastructure MobilitySource: AMI ICT Tracking Studies
6
Improving bandwidth
On-premise data back-up & disaster recovery solutions
Security for mobile devices
Server virtualization
On-premise data security & privacy for PCs/network
IT systems mgt tools
Data Loss Prevention (DLP) solutions
74%
74%
73%
72%
71%
68%
68%
SMB Strategic IT Imperatives and InvestmentsTechnology remains a strategic focal point for SMBs
Source: AMI-Partners (www.ami-partners.com) 2014
2014 2019
$45 $82
$235
$277 On-Premise
Cloud(In $
Bill
ions
)
Migration to Cloud
$281 B $360 B
CAGR: 12.8%
CAGR: 3.3%
(% of Total)
7Source: AMI Global Model 1H14
US SMB ICT Transformation
Source: AMI-Partners (www.ami-partners.com) 2014
Small Business Medium Business
8
2014 2019$ 0.0
$ 5.0
$ 10.0
$ 15.0
$ 20.0
$ 25.0
$ 30.0
$ 35.0
$ 40.0
$ 45.0
$5.6
$15.8$4.4
$10.9
$2.7
$5.9
$8.7
$10.1Web Hosting & Devel-opment
UC Services
Software-as-a-Service
IaaS
In $
Bill
ions
$21 B
$43 B
2014 2019$ 0.0
$ 2.0
$ 4.0
$ 6.0
$ 8.0
$ 10.0
$ 12.0
$ 14.0
$ 16.0
$ 18.0
$ 20.0
$1.6
$3.8$1.8
$4.5
$2.3
$4.2$5.5
$6.4
In $
Bill
ions
CAGR (%)
2.9%
13.3%
19.5%
18.4%
CAGR (%)
23.0%
16.8%
19.6%
23.0%
$11 B
$19 B
Source: AMI Global Model 1H14
US Cloud Spending
Source: AMI-Partners (www.ami-partners.com) 2014
Small Business
12%
77%
11%
Small Business Medium Business
Medium Business
19%
74%
7%Increased need for support
Remained the same
Decreased need for support
9
Shift to Cloud Has Not Drastically Reduced the Need for Service and Support
Source: AMI-Partners (www.ami-partners.com) 2014
$7 $735 $846
$5,383
$8,533$7,252
$10,769$11,950
$16
$868 $1,820
$10,900
$14,869 $14,941
$18,061
$20,806
20142019
10
Channel Partners and Hosters continue to be Cloud RTM-of-choice for SMBs through 2019
Source: AMI-Partners (www.ami-partners.com) 2014
We have quantified the addressable opportunity and uncovered the challenges faced by SMBs.
How do we target and segment these end-users? Introducing AMIs SMB Segmentation Model…
Allows us to uncover who the key decision makers are and how we can connect with high value customers.
Targeting High Value Customers
Source: AMI-Partners (www.ami-partners.com) 2014
Tier 1 SMBsCloud Integrators
Tier 2 SMBsCloud Innovators
Tier 3 SMBsCloud Pragmatists
Tier 4 SMBsCloud Minimalists
% PC SMB Firms 10% 20% 30% 40%
% of Cloud Spend 40% 30% 20% 10%
ICT Mindset Process Experimental Risk Averse Get by
View of Cloud Integral to growth & operations Enables agility Means to simplify Point Solutions
Decision Making StructuredMultiple BDM-TDMs
SystematicMainly BDMs, Some TDMs
AdaptiveBDMs
ReactiveOwner-Manager
Cloud Mindset & Purchase Process Implications
12
AMI’s WW SMB Segments: ICT/Cloud Needs, Adoption & Behavior Based Mindset, Decision Process & Cloud Implications – Identifies High Value Segments
Source: AMI-Partners (www.ami-partners.com) 2014
Tier 1 Tier 2 Tier 3 Tier 4SaaS
Acctg/Financials
Payroll
HR
CRM
ERP
Proj Mgt.
Bus Intel/analytics
IaaSStorageServers
Security
UC
Audio Conf.
Video Conf.
Web Conf.
Hosted VoIP
IM
25%
48%
22%
37%
13%
25%
28%
39%34
% 56%
75%
48%
64%
24%
73%
21%
33%
3%
8%
1%
3%
2%
32%14
% 28%
43%
18%
23%
37%
59%
6%
7%
2%
1%
4%
13%
8%15%
18%
17%
12%
7%
57%
3%
9%
1%
1%
1%
5%
3%12%
26%
25%
17%
7%
34%
13
Cloud Applications/Services Usage – Tiers 1 and 2 are Principal Drivers
Source: AMI-Partners (www.ami-partners.com) 2014
What steps are partners taking to drive success & profitability in the cloud and what metrics should we track to benchmark ourselves against them?
AMI has segmented and benchmarked partners based on how far they are along the cloud transformation journey.
How to Measure Yourself Against Best in Class Partners?
Source: AMI-Partners (www.ami-partners.com) 2014
Cloud Partner Segmentation Cloud Transformed
Cloud Migrating
Cloud Emerging
Cloud Emerging – 27% Have not allocated adequate investments to cloud Lack expertise needed to effectively sell cloud
Cloud Migrating – 24% Have begun to take steps necessary to be
successful in selling cloud, but have not yet met their goals
Some cloud expertise, but require additional vendor support
Cloud Transformed – 13% Have taken steps necessary to successfully sell
cloud Meeting and exceeding their cloud sales goals
15
AMI’s Partner Transformation ModelOnly 1 in 10 partners are fully Cloud Transformed
Non-Cloud Partner– 37% Exclusively on-premise focused; no cloud
investments
Non-Cloud Partners
Source: AMI-Partners (www.ami-partners.com) 2014
Cloud Partner Metrics
Sales Expertise
Technical Expertise
Cloud Revenue Model
Marketing Expertise
Vendor Engagement
Customer Engagement
Cloud Sales Goals
Cloud dedicated sales staff
Cloud marketing activities
Cloud certified emps
Cloud biz. modelsCustomer Sat.Customer demand
Cloud vendor partnerships
Marketing funds for cloud
Cloud Models Offered
% of revenue from cloud
Cloud Partner Benchmarking Metrics
16
Partner Benchmarking Approach & MetricsThere are several business areas that are key for partner transformation
Source: AMI-Partners (www.ami-partners.com) 2014
Cloud Transformed Cloud Migrating Cloud Emerging
Average Changes in Revenue – Last Year vs. Next Year
Proportion of Sales from on-Premise vs. Cloud
18.2%21.5%
11.4%
27.6% 26.2%
10.2%Avg. Growth in Last Year
Avg. Growth in Next Year
42% 52%66%
58% 48%34%
Cloud-Based solutions and services
On-premise solutions and services
17
Firmographic Comparison of Cloud PartnersTransformed partners are generating significantly more revenue from cloud and growing faster
Source: AMI-Partners (www.ami-partners.com) 2014 18
Steps Taken by Partners to Drive Success When Selling Cloud Solutions & Services
Have a dedicated cloud marketing team
Employees Have achieved Cloud certifications
Integrated cloud into primary sales & marketing motions
Specify sales goals for Cloud solutions/services
Installed a separate Cloud services business unit
Steps Taken by Most Successful Cloud Partners
Source: AMI-Partners (www.ami-partners.com) 2014
Cloud Marketing programs
Cloud Sales reps training
Cloud Customer Support
44%
39%
38%
Cloud partnerships with vendors
Cloud Sales reps training
Cloud Technical expertise
39%
32%
32%
Cloud Sales reps train-ing
Cloud Customer Support
Cloud partnerships with vendors
45%
40%
36%
Cloud Transformed
Cloud Migrating Cloud Emerging
19
Critical Cloud Investments
Critical Investments Necessary to Drive Cloud SalesThe most successful cloud partners are focused on improving their cloud marketing programs to generate greater demand for cloud in order to accelerate cloud sales
Source: AMI-Partners (www.ami-partners.com) 2014
Cloud Transformed
Cloud Migrating Cloud Emerging
Our customers are more satisfied 69% 49% 51%
Closer relationships with vendors for sales and marketing support 69% 53% 40%
We generate strong overall margins and profitability 64% 61% 44%
There is strong demand among our SMB customers for cloud 64% 53% 40%
We have well-defined cloud services value propositions and pricing 59% 48% 44%
20% of Respondents answering 4+5 on a scale from 1-5 where ‘1’ is Strongly Disagree and ‘5’ is Strongly Agree
Transformed Partners Are More SuccessfulTransformed partners have more satisfied customers, closer vendor relationships, and generate stronger profitability than other partners
Source: AMI-Partners (www.ami-partners.com) 2014
Marketing Activity
Published Articles/Ads in IT or Business Magazines
Perform Marketing Activities On a Daily
Basis
20+% Marketing Budget Dedicated to
Cloud
Work with IT Vendors for Marketing
Has a Dedicated Cloud Sales & Marketing
Team
Hosting Online Webinars & Webcasts
Hosting On-site Events, Seminars,
Trade Shows
Using Social MediaEmail Campaigns
Online Marketing Tools
Direct Mail Campaigns
White Papers, Case Studies
Revenue Growth
Marketing Approach
21
AMI has developed a predictive model that correlates partner marketing activity with partner segments and cloud revenue generation
Source: AMI-Partners (www.ami-partners.com) 2014
Online marketing tools
E-mail Campaigns
Hosting on-site events
Attending conferences or tradeshows
Online banners ads
Publishing Articles/Ads in IT mag.
White papers or data sheets
Direct Mail Campaigns
Hosting webinars or webcasts
Case studies
Using social media
52%
46%
45%
41%
41%
36%
35%
33%
33%
32%
26%
Online marketing tools
Online banners ads
E-mail Campaigns
Direct Mail Campaigns
Hosting on-site events
Case studies
Hosting online webinars or webcasts
White papers or data sheets
Publishing Articles/Ads in IT Mag.
Using social media
Attending conferences or tradeshows
65%
52%
50%
45%
45%
34%
31%
30%
29%
27%
27%
Daily Weekly
Monthly
Quarterly
Sales and Marketing Activities
Generate Strong Success
Frequency
Others
Sales and Marketing Activities Frequency
Transformed
22
Partners are overlooking potentially high impact marketing activities
Source: AMI-Partners (www.ami-partners.com) 2014 23
Cloud Transformed Cloud Migrating Cloud Emerging
Direct/Face-to-face Via Field Salesforce 67% 49% 55%
Direct Through Telesales 56% 52% 50%
Indirect via other channel partners/resellers 36% 42% 44%
Indirect via App Stores/ Aggregators/Brokers 28% 37% 36%
Via our website 47% 50% 48%
% of Respondents answering 4+5 on a scale from 1-5 where ‘1’ is Not at all Effective and ‘5’ is Very Effective
Top Cloud Sales MethodsTransformed partners are self-reliant whereas other partners prefer indirect sales tactics
Source: AMI-Partners (www.ami-partners.com) 2014 24
Cloud ConnexMaking Money Just Got Easier – Resell Private-Labeled, Cloud-Based Services
Extend
Customer Opps
NEW
Revenue Sources
Minimal
Investment
Increase
Profit Margins
NEW
Portfolio Products
Combine or Sell
Standalone
Source: AMI-Partners (www.ami-partners.com) 2014 25
Cloud ConnexEasily and Affordably Resell and Deliver Your Own Branded Cloud Solutions
Source: AMI-Partners (www.ami-partners.com) 2014 26
Cloud ConnexAvailable Services
Reseller
Customers
Q & A?