Planning for Cloud Profitability from Day One
Webinar with ProfitBricks, Inc. | Q1 2016
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Introduction ProfitBricks in 2015
Mission Painless Cloud Computing Infrastructure service which enables
existing IT team...
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Other Cloud Providers
ProfitBricks:
Painless Cloud Infrastructure
Painless Cloud Infrastructure
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EXECUTION.
GROWTH.
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Planning for Cloud Profitability From Day One: MSP VAR Companies and Cloud Computing

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Larry Walsh, IT Channel Expert from the 2112 Group will present his new report and research on the best way forward for MSPs

In 2016 we’ll see cloud infrastructure opening new opportunities for managed service providers to deploy and maintain virtual machines and virtual data centers in hosted environments. Capitalizing and profiting on this transition requires strategic planning and execution. In this webinar, The 2112 Group’s Larry Walsh and ProfitBricks will share how MSPs can make the most out of cloud infrastructure from day one and into the future.

In this presentation you'll learn about:
The cloud market from an MSP view
How the channel’s unique cost/profit model fits with the cloud opportunity
How to select a cloud business model
How to plan for cloud profitability and growth

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Planning for Cloud Profitability From Day One: MSP VAR Companies and Cloud Computing

  1. 1. Planning for Cloud Profitability from Day One Webinar with ProfitBricks, Inc. | Q1 2016
  2. 2. 2 Introduction ProfitBricks in 2015 Mission Painless Cloud Computing Infrastructure service which enables existing IT teams, to deploy their applications and get all of the benefits of the at an IT budget friendly price. Details HQs in Berlin, Germany, San Antonio, TX and Boston, MA 135 Employees Investors Achim Weiss –CEO Andreas Gauger –CMO United Internet (UTDI: Market Cap: $8 Billion) Technology KVM Based – Cloud Computing IaaS service, built on InfiniBand network interconnects with an efficient, performance optimized platform with minute based metering and billing, deployed on premium commodity hardware and housed in top-tier data centers. Product IaaS – Compute, Networks, Storage with Data Center Design and Management Software
  3. 3. 3 Other Cloud Providers ProfitBricks: Painless Cloud Infrastructure Painless Cloud Infrastructure
  4. 4. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. - 4 -
  5. 5. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. - 5 -
  6. 6. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. - 6 -
  7. 7. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. - 7 -
  8. 8. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. Cloud Computing’s Appeal • F l e x i b i l i t y • A g i l i t y • S c a l a b i l i t y • U b i q u i t y • A d a p t a b i l i t y • U p d a t a b i l i t y • C o s t s
  9. 9. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. Why Customers Want Cloud - 9 - 43% reduce IT capital expenses 40% reduce cost of IT operations 23% increase operational productivity 22% increase agility & competitiveness 21% improve performance 15% access new technologies
  10. 10. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. - 10 - • Software as a Service (SaaS) • Platform as a Service (PaaS) • Infrastructure as a Service (IaaS) • Business Process as a Service (BPaaS) • Managed Clouds Enter the Clouds
  11. 11. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. Cloud Computing Is a Growing Market Opportunity SaaS $133B PaaS $12B IaaS $5B BPaaS $10B Source: Forrester Research
  12. 12. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. Technologies with High Growth Potential 0% 10% 20% 30% 40% 50% 60% Managed Print Services Converged Infrastructure Software-defined networking Unified communications and collaboration Servers/data center PCs/notebooks/netbooks Data networking (routing, switching) Business software Other (please specify) Data storage Virtualization Application development Mobile device management/BYOD Internet of Things/machine-to-machine applications Printing and imaging Wireless networking Mobile devices (smartphones, tablets, handhelds) Business analytics / Big Data Voice services/bandwidth/connectivity/Internet access Backup, continuity and disaster recovery Data security Cloud infrastructure/services
  13. 13. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. Cloud as a Replacement Servers Backup Storage Software Security Communications
  14. 14. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. - 14 - Average solution provider earns as much as 1/2 to 2/3 of their gross revenue from managed services Cloud as a Revenue Generator
  15. 15. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. Cloud as a Systems Catalyst Cloud Computing Devices Applications Networks Analytics Storage/Backup Output/Presentation Transport Security Administration&Operations Training&Support ManagedServices Consultation&Advisory CapEx OpEx (CapEx) + ((OpEx)*(Time)) = Total Accretive Value
  16. 16. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. CapEx vs. OpEx Revenue Time CapEx OpEx Compounding Recurring Revenue
  17. 17. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. Operating Deficit Cloud Challenge Revenue/Cost Time 1 Operating Costs Recurring Revenue
  18. 18. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. Cloud Challenge Revenue/Cost Time/Accounts 1 2 3 4 5 6 7 8 Operating Costs Recurring Revenue Cash Flow Positive • Cash flow turns positive when recurring revenue is greater than operating expense • Cloud service achieves ROI when revenue covers operating expenses and initial investment costs • Profitability happens when recurring revenue generates more than investment and operating expenses
  19. 19. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. Compounding Cloud Revenue Revenue&OperatingExpenses Time • Continuous addition of new accounts or account expansion that leads to increasing revenue • Scaling resources faster than services consumption • Maintaining a low account attrition rate • Commitment to sales and marketing of services and value • Focus on customer experience and outcome-based value
  20. 20. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. Planning for Profitability • Identify Customer  You can operate globally, but the world is not your customer  Understand and profile customers to establish sales scenarios and customer interactions  Define who is not your customer and why
  21. 21. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. Planning for Profitability • Select a Cloud Model Advise Refer Resell Build Support Manage Operate Investment
  22. 22. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. Planning for Profitability • Select a Recurring Revenue Model  On-demand  Weekly  Monthly  Quarterly  Annually Revenue model will determine sales needs and operating parameters for planning expenses and investments
  23. 23. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. Planning for Profitability • Pick a Cloud, but Not Any Cloud  Keep start-up costs down by leveraging existing expertise and resources  Build cloud practices based on existing technology and customer experience  Create value by incorporating existing resources with cloud capabilities
  24. 24. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. Planning for Profitability • Plan Transition – Don’t Do a Crash Change Revenue&OperatingExpenses Time Cloud Legacy Products Inflection Point • Do not stop selling legacy products; use legacy revenue streams to pay for future investments • Plan a steady, progressive transition from legacy revenue to cloud/services revenue • Set milestones and goals for expanding cloud revenue and measuring performance • Accept that this process takes time – up to 3 years
  25. 25. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. Planning for Profitability • Make a Plan, Set Goals, Draw a Road Map  Create a vision that translates to value  Set goals – revenue and development  Know how you’re performing  Decide when to expand capacity  Maintain and exceed returns on investment  Draft a plan that sets the operational parameters, roles and responsibilities, and performance expectations  Establish what you want to be when you grow up
  26. 26. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. Planning for Profitability • Commit to Sales, Not Just Technology  You are first and foremost a sales organization  Cloud services model is dependent on sales first, technology second  Create a sales culture with management, governance, planning, expectations, and accountability  Demonstrate sales capabilities to vendors
  27. 27. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. Planning for Profitability • Commit to Marketing  Cloud capabilities are worthless if no one knows who you are, what you’re doing, or what you’re capable of  Communicate value to vendors and customers alike  Use all available resources  Commit to sustained marketing and communications; no “one and done” efforts
  28. 28. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. Wash, Rinse, Repeat
  29. 29. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. - 29 - QUESTIONS
  30. 30. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. Getting Started - 30 - Check out the new ProfitBricks Cloud Computing: Channel Go-To-Market Guide, produced by The 2112 Group
  31. 31. ©The 2112 Strategy Group, LLC – Distribution Prohibited Without Express Permission. STRATEGY. EXECUTION. GROWTH. Larry Walsh lmwalsh@the2112group.com @lmwalsh2112 @the2112group Website www.the2112group.com 2112 Blog www.the2112group.com/blog Information contained in this publication has been obtained by sources and methodologies of The 2112 Strategy Group, LLC, and are considered to be reliable but not warrantied. This publication may contain the opinions of The 2112 Strategy Group, which are subject to change from time to time. This publication is copyrighted by The 2112 Strategy Group, LLC. Any violation of the limited terms of reproduction or redistribution of this publication, in whole or in part, whether in hard-copy format, electronically, or otherwise to persons not authorized to receive it, without the express consent of The 2112 Strategy Group, LLC, is in violation of U.S. copyright law and will be subject to an action for civil damages and, if applicable, criminal prosecution. Any questions should be directed to The 2112 Strategy Group at (347) 770-2112 or info@the2112group.com.

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