Microsoft - Build Your Own Package Offer Summit #BYOP - Highlights

Last week I participated in a very exclusive Microsoft Workshop in Seattle. The objective of this event was to help Microsoft’s partners to build and package their IP on top of Office 365 and Azure stack. The attendees were also guided in the definition of their Go To Market strategy with #CSP (Microsoft Cloud Solutions Provider). Less than 50 companies were invited to this two-day summit. Partners from all around the world flew to Seattle to be part of this event; Argentina, Australia, Belgium, and Canada are just of few examples of the diversity of the crowd.

I am writing this article to help SherWeb’s 5000 partners with their cloud strategies and GTM plan. Even if a significant portion of your revenue is recurring, it is always a good idea to return to the base and update your business cloud strategy.

Below are the highlights and takeaways I noted from this workshop. Please note that the following points are in no particular order.

“Large and Short VS Thin and Long” - Of course, we are talking about margins here! A traditional IT company would obtain a $100K contract with a 30% margin once in a while (Large and Short); whereas, with the cloud, this same company will get a recurring monthly $4K contract with a 15% margin (Thin and Long).  Every partner should think about this new reality concerning the companies’ bottom line. With this shift in the mindset, increasing the volume of clients is key to overcoming this new reality. Another key aspect to get better margins in the cloud is to build and deploy your IP on top of cloud services. More on that later…

“Client Land Grab Mode – Sense of Urgency” - Partners have to evolve and quickly. The market is moving fast, and all partners should be in a client land grab mode. Transforming your business is critical, and you have to act quickly. Once a customer has moved to the cloud, the stickiness of it is exceptionally longer than a traditional client. Once up and running, there is not a fixed renewal date nor big upgrades or large amounts of money to invest in renewing the server room. As long as everything is working, the client will remain loyal to you.

"Do not sell a license. Sell a solution" – Businesses (especially SMBs) don't like technologies. They don't care about the product, and they care even less about the licensing model. Don't talk of CSP to your customers. They don't care! You have to sell a solution to their problem. To do this, you’ll have to assess your client’s real needs and propose a solution based on your assessment. Don’t sell Office365, VoIP, Skype, PSTN calling or any other cloud service because it’s cool and hot. Present and pitch which solution the product resolves, and you'll get the client’s attention and improved loyalty.

“Status Quo is NOT a Growth Strategy” – The market is evolving and so is your competition. If you do not think and re-think your business strategy and invest in it, you are losing market shares EVEN if your business is growing. Let’s face it, if a business grows by 15% while the market grows by 30%, this company is losing market shares.

“All-In or you WILL FAIL” – Let's take, for example, a company CEO who wants to increase recurring revenue and start a cloud journey. If the VP of sales doesn’t adjust the commission plan, this company will fail to get into the cloud. After defining the business value proposition and the “Go To Market” strategy, the first thing to do is change the compensation plan of the sales team. If you don't incentivise your sales force to sell cloud, it won't.

"Invest in Marketing" – Local IT businesses were the norm a few years ago, but as the cloud market grows, globalization becomes the norm. If you want to be successful and still be in business in a few years from now, you have to think global. How does your value proposition solve a real SMB problem? Once you have answered this question, go out and go out loud. If you have an IT background or you're not interested in online marketing, get help from an external agency. 

“Invest MORE in Marketing” – Marketing money spent today becomes sales tomorrow. The buying process of a client is a lot different than ten years ago. Most customers will call your business only when their choice is made. The buying process starts online and continues until the client thinks you are one of the top 3 contenders. A study recently showed that it takes between 12 and 24 pieces of content before you get the sales. (Blog posts, website visits, whitepapers, email, eBook, chat, etc.). If you don’t have multiple assets online yet, you should get to it soon.

"The 4 Ps of Marketing Are Dead!" – Product, Placement, Price, Promotion are great when you sell a physical product. Marketing people should now think in terms of Solution, Access, Value and Education (SAVE).

"FEAR – Be the VP of Problem Development" – This is what your clients buy. Building your value proposition around your client's fears and how you are addressing them is an extremely effective way to develop your value proposition. Here are sample questions and answers to address some of your client’s dormant fears: #1 - Are you sure your current IT setup will support your company’s growth? Well, we developed an expertise in your vertical to let you focus on your business. #2 - What will happen to your business if the server in your closet dies? #3 - Are you sure your employees are well trained and efficient? We developed an ongoing unique training program for your sector that will address this and raise your team effectiveness. Even better, it's subscription-based (low monthly recurring fee).

"How much is my company worth?" – If most of your revenue stream comes from projects or traditional streams, well, I have bad news for you. Your business worth is between 0.2-1.5X your revenue or 2-2.5X EBITDA. Transfer the same amount in recurring revenue and your company will be worth between 2-6X your revenue and 5-14X EBITDA. Moreover, you’ll be able to get a constant revenue month after month that will allow you to focus more on your growth strategy and execution.

"Stickiness doesn't come from the product" – Remember, your client doesn't like technologies. They won't stick to your company because you are providing them Office 365, Skype or any cloud commodity service. The clients will stick because you offer them a good service and an excellent customer experience. Don't position your product first. Your customer experience should rule over all of your actions. What's the end-to-end customer experience of your clients? How can it be improved? Is this one of your business priorities? If not, make it one!

Hope that this summary will help you accelerate your cloud journey.