• A large internal information technology (IT) staff that includes software developers. • 2,000 or more employees. • Core infrastructure services such as network monitoring; virtual private network (VPN); firewall; and antivirus, identity, and security management. • Advanced business productivity services such as email, voice, storage, customer relationship management (CRM), accounting, and tax services. • Communications services including instant messaging (IM), Voice over Internet Protocol (VoIP), web conferencing, and video conferencing. • Horizontal and vertical applications. • A mobile workforce and an extensive web presence. • Windows Intune • Microsoft Exchange Online, Microsoft SharePoint Online, Microsoft Office Communications Online, and Microsoft Office Live Meeting • Microsoft Dynamics CRM Online • Hosted versions of Microsoft Exchange Server, Microsoft SharePoint Server, and Microsoft Office Communications Server • Windows Azure, Microsoft SQL Azure, and Windows Azure platform AppFabric • Windows Server 2008 R2 with Hyper-V technology You will find guides that address other customer scenarios, such as small businesses or the public sector, at https://partner.microsoft.com/cloudservices This guide is primarily for partners that serve enterprise customers with: This guide includes business opportunities for the following Microsoft cloud services: Business Builder for Cloud Services Partner Opportunities in the Enterprise Market (2,000+ Employees)
The Cloud Opportunity Executive SummaryThe Cloud Opportunity and Customer Benefits
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Capitalizing on the Cloud How Partners Can Capitalize on the CloudOpportunities by Partner Business Model
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IT Requirements Enterprise IT Requirements5
Partner Opportunities Reselling to Enterprise CustomersServicing Enterprise CustomersDeveloping for Enterprise CustomersHosting Services for Enterprise Customers
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Making the Transition to Cloud Services Understanding the Impact of Cloud Services Making the Transition to Selling Cloud ServicesPrepackaged Offerings and Add-On Services
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Calls to Action Calls to Action by Partner TypeAdditional Resources
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Opportunities in Other Customer SegmentsSmall Business | Medium Business | Enterprise | Public Sector
Opportunities in Other Customer Segments Opportunity Overview for ResellersOpportunity Overview for Systems IntegratorsOpportunity Overview for ISVsOpportunity Overview for Hosting Providers
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Table of Contents
The Cloud Opportunity
IT Requirements Capitalizing on the Cloud
Partner Opportunities
Making the Transition to Cloud Services
Calls to Action Opportunities in Other Customer Segments
This guide is designed to provide partners with an overview of the cloud services opportunity in the enterprise space and the specific opportunities available to them. It covers the following topics:
Executive Summary
In the next few years, demand among enterprise customers for cloud services is projected to grow rapidly. By 2014, IDC expects the overall market for public IT cloud services to be worth over $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, but it also necessitates some changes in the way that you package, sell, resource, finance, and
Core information technology (IT), application,
and service needs of enterprise customers
Business models and cloud revenue opportunities in the enterprise market
Calls to action specific to partner models
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, “enterprise” refers to businesses with 2,000 or more employees. These organizations typically have large multi-layered IT organizations that are responsible for providing a broad range of IT services to internal customers.
Table of Contents
The Cloud Opportunity
IT Requirements Capitalizing on the Cloud
Partner Opportunities
Making the Transition to Cloud Services
Calls to Action Opportunities in Other Customer Segments
For example, Software as a Service (SaaS) is forecast to have a 17.7 percent compound annual growth rate (CAGR) through 2013 in the aggregate enterprise application markets, nearly five times the CAGR of 3.6 percent for the total application market.2
Enterprise customers are squarely focused on maximizing the scalability and flexibility of their IT infrastructure to support complex business processes and ensure efficient IT service delivery to large numbers of users. They often need a way to cost-effectively centralize and extend the reach of enterprise applications and data to connect people across multiple business functions and geographic areas. Moreover, to support ongoing business process optimization efforts and other high-priority corporate initiatives, these organizations need the ability to rapidly develop, test, and deploy new applications. At the same
time, these organizations are continuously looking for ways to optimize their data center operations to reduce hardware sourcing and maintenance costs—without sacrificing system performance and data availability.
Adding to their responsibility for supporting large numbers of remote and mobile users, enterprise IT staff also need to ensure the highest levels of data security to comply with corporate, industry, and government regulations. Further, when it comes to licensing obligations, many enterprise organizations stress the importance of comprehensive subscription plans that offer flexible deployment options and volume purchasing discounts, alongside such value-added services as technical support and staff training.
The growing opportunity for partners to sell cloud services to customers in this market space is based on a number of factors:
The enterprise market presents a compelling and growing opportunity for partners that offer cloud services.
Lower IT service delivery costs By moving infrastructure and applications to the cloud, enterprise businesses can dramatically reduce the time they spend maintaining and monitoring technology, and can focus instead on driving innovation.
Extended value for existing investments When specialized business systems are integrated with cloud-based services and applications, businesses can enhance and adapt business processes without the need to “rip and replace” aging infrastructure.
Lower barriers to global growth By cost-effectively connecting cloud-based and on-premises enterprise systems such as enterprise resource planning (ERP) solutions, organizations can synchronize across geographically dispersed business units and provide executives with a clearer view of global operations.
Increased competitive advantage Enterprises have greater “elasticity” to roll out and support new business models and adapt business processes to meet market demands.
Table of Contents
The Cloud Opportunity
IT Requirements Capitalizing on the Cloud
Partner Opportunities
Making the Transition to Cloud Services
Calls to Action Opportunities in Other Customer Segments
Cloud opportunities specific to the enterprise market include:
The Core IO model helps organizations achieve a more secure and dynamic core infrastructure to reduce IT costs and better utilize IT resources. Partners can use Microsoft cloud services to extend, enhance, or altogether replace key Core IO capabilities, including:
Effective identity and access management is the cornerstone of solid information protection, and is vital to helping ensure enterprise-grade security in the cloud. For example, partners can work with customers to integrate Active Directory Federation Services (ADFS) 2.0 with applications built on the Windows Azure platform to ensure consistent enforcement of identity and access policies across hybrid cloud networks.
Security and network optimization
Enterprise customers are fast realizing the benefits of using private clouds behind the corporate firewall. Partners can use the Dynamic Data Center Toolkit for Hosters to capitalize on this growing opportunity, helping customers build the foundation for a private cloud infrastructure and bridge the gap between public and private cloud environments. Partners can also take advantage of Microsoft virtualization technologies offered through Hyper-V in the Windows Server 2008 operating system and Microsoft System Center to help customers pursue network optimization strategies as they build out their private cloud infrastructure.
Data protection and recovery
As many enterprises pursue a hybrid cloud strategy, there is an increasing need for tools that provide integrated data protection and management across on-premises and hosted environments. Through capabilities enabled by Microsoft SQL Azure, Windows Server 2008, and the System Center family of products, partners can help organizations bring together information stored in local databases with information in the cloud to gain enterprise-wide visibility for enhanced business control. Furthermore, partners can play an instrumental role in helping customers implement cloud-based business continuity and disaster recovery solutions to complement offerings around data management.
Desktop, device, and server management
Maintaining effective, cost-efficient PC management and security can pose challenges for enterprises with large workforces, particularly if they are dispersed across locations. To address these challenges, partners can help enterprise organizations plan for, develop and deploy cloud-based solutions for remote and mobile workers that can improve the efficiency and performance of IT infrastructure.
Customers in this market segment are looking to cloud computing and virtualization as a way to gain efficiencies while continuing to support increasing demands. These include improving processes, reducing costs, making better use of data, and providing the tools and support needed to remain competitive. Partners who serve this market play a pivotal role in helping both business and IT decision-makers realize how cloud services can help them do more with less.
Table of Contents
The Cloud Opportunity
IT Requirements Capitalizing on the Cloud
Partner Opportunities
Making the Transition to Cloud Services
Calls to Action Opportunities in Other Customer Segments
Business Productivity Infrastructure Optimization (BPIO) solutions
The Microsoft BPIO model helps simplify how people communicate and helps improve the quality of business insight.
Unified communications and
collaboration
The cloud is an ideal medium for enterprise messaging and collaboration solutions that incorporate capabilities such as instant messaging (IM), presence awareness, and social media tools. As it provides flexible functionality that is available anywhere, Partners can work with enterprise customers to plan, customize, and deploy Microsoft cloud solutions such as Microsoft Exchange Online and Microsoft Exchange Hosted Services, Microsoft Office Communications Online, Microsoft SharePoint Online, Microsoft Live Meeting, and Microsoft Office Web Apps. Because many organizations will elect to combine cloud-based solutions with on-premises applications and hardware, partners that offer integration for hybrid environments will be well-positioned to capitalize on growing demand. Gartner estimates that by 2012, 40 percent of enterprises will adopt a blend of cloud and on-premises approaches to meet their unified communications needs.3
Enterprise resource planning (ERP) and customer relationship
management (CRM)
Global organizations require detailed analytical, collaborative, and operational tools to manage their relationships with customers and suppliers. The Windows Azure platform can help integrate enterprise platforms such as SAP and Siebel with cloud-based solutions to create applications with familiar interfaces. To enable online ERP scenarios, partners can offer online services for Microsoft Dynamics ERP, which help customers realize the benefits of business processes supported by the cloud.
Enterprise content management Partners can give customers the option of capitalizing on full-featured enterprise content management (ECM) solutions built on SharePoint Online or extend SharePoint 2010 to create cloud-based content management solutions. With FAST Search for SharePoint, partners can help customers build on the SharePoint 2010 platform to create search-driven applications to make the most of their content. Independent software vendor (ISV) partners can work with customers to build their own fully customized content management solutions on the Windows Azure platform. With these capabilities, partners can win customer loyalty by helping manage and archive content stored in multiple formats, streamline business processes, and satisfy compliance and other legal requirements.
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The Cloud Opportunity
IT Requirements Capitalizing on the Cloud
Partner Opportunities
Making the Transition to Cloud Services
Calls to Action Opportunities in Other Customer Segments
Organizations can streamline IT and business processes with application platform optimization, to increase the value of their investment in applications. Cloud-based applications such as Microsoft Online Services offer a clear path to reducing application costs and maintenance. Windows Azure also offers a development, hosting, and service management platform that partners can use to help enterprise organizations simplify application delivery and development. Partners can tap the power of Windows Azure to help customers cost-effectively connect and extend existing enterprise applications and develop new applications that provide Internet-class scalability and performance across the following areas:
In addition to these opportunities, partners can work with their enterprise customers to attach Enterprise Agreements (EAs). In particular, customers that renew EAs provide a natural starting point for discussing how cloud services can satisfy key business needs. By attaching Microsoft cloud services to an EA, partners are eligible for Enterprise Software Advisor fees and can also offer supplemental tailored services for deployments of 5,000 seats or more. Another timely opportunity is using upgrades and deployments to Windows 7 to up-sell Microsoft Online Services, and using Office 2010 upgrades to attach Office Web Apps.
Business intelligence (BI)
As more companies need to make data available to specific teams and across their workforces, they will aim to take advantage of the scalability and flexibility of the cloud. Through integration with SharePoint Server 2010, enterprise companies can now easily extend analytics and BI data to more users across the organization through a centralized portal. SQL Azure gives customers the ability to access SQL services in the cloud, making it easier to quickly launch BI initiatives (and retire them just as quickly)—all at a fraction of the cost of standard BI deployments.
Application life-cycle management
Increasing the efficiency of the application development process while ensuring rigorous quality control and alignment with business goals are top priorities for enterprise IT organizations. Windows Azure builds on the Microsoft Application Platform to provide enterprises with a common development framework for rapidly building, testing, and deploying cloud-based applications. Windows Azure includes a complete online development environment, including computation and storage services. Partners can use these and other tools, including integrated tools for Microsoft Visual Studio and Windows Azure platform AppFabric, to help customers quickly roll out enterprise-grade cloud applications.
Line-of-business (LOB) applications
For development partners looking to build LOB cloud-based or hybrid applications, the Windows Azure platform offers a scalable development environment with compute, storage, hosting, and management capabilities. Partners can develop applications on behalf of other partners, and can help enterprise customers develop their own cloud-based applications. Similarly, partners can build custom SharePoint Online, Office Communications Online, Exchange Online and Dynamics ERP solutions to support specific customer business needs, such as solutions that facilitate integration with other applications both on premises and in the cloud.
Table of Contents
The Cloud Opportunity
IT Requirements Capitalizing on the Cloud
Partner Opportunities
Making the Transition to Cloud Services
Calls to Action Opportunities in Other Customer Segments
A key determining factor for customers when they select a partner is whether the partner can provide services and support across the entire life cycle of projects. As a result, opportunities exist for partners through the sales process, from pre-sales activities to post-sales support, enhancements, and project extensions. By offering a comprehensive suite of services or
partnering with others to do so, partners can develop ongoing “trusted advisor” relationships, which are critical to long-term success. Through these relationships partners can develop a deeper understanding of their customers’ technology environments and solutions needs, leading to incremental cross-selling and up-selling opportunities.
Pre-Sale Services• Plan and needs assessment• Design• Data integration• Configuration• Develop extensible applications
Resale• Technology selection• Sizing• Pricing• Procurement• Sell standard applications
The key to a successful cloud services practice is to develop additional services that add business value, such as consulting and IT design strategy; deployment, migration and integration support; outsourced and managed services solutions; virtualization and custom application development.
Table of Contents
The Cloud Opportunity
IT Requirements Capitalizing on the Cloud
Partner Opportunities
Making the Transition to Cloud Services
Calls to Action Opportunities in Other Customer Segments
Following is a more detailed list of opportunities in the enterprise market by partner business model. For an overview of opportunities available to partners that are serving other customer segments, please see the Opportunities in Other Customer Segments section later in this guide.
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 Windows Azure.
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 subscriptions. 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.
Many Microsoft partners play multiple roles when serving their clients, bringing together sales, support, application development, and IT expertise.
Opportunities by Partner Business Model
Business Opportunities Partner Investment Microsoft Support
Sell
Solu
tions • Recurring revenue
• Packaged solutions
• Expanded services
• New markets and customer segments
• Marketing funds
• Cloud skills development
• Revised compensation models
• Hands-on experience
• Marketing air cover
• Internal user rights (IUR)
• Pre-sales and deployment support
• Pre-sales training
Build
Solu
tions
• Repeatable IP• Faster deployment• Migrate solutions to the cloud• Scale users• Faster, less costly testing• Extended and customized cloud offerings
• 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
Hos
tSo
lutio
ns • Extended product offerings
• Broader marketplace
• Increased wallet share
• Virtualization technologies
• Consolidated technology platforms
• Additional sales skills
• Marketing tools
• Pre-sales support
• Pre-sales training
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The Cloud Opportunity
IT Requirements Capitalizing on the Cloud
Partner Opportunities
Making the Transition to Cloud Services
Calls to Action Opportunities in Other Customer Segments
Using the VoIP capabilities of Office Communications Online, Energizer has been able to increase mobility, reduce costs, and reduce maintenance and administration. “We believe at least 20 percent of our workforce will immediately benefit from these enhanced voice services.”
-John Tschannen, Director of IT and User Services, Energizer
Reselling to Enterprise Customers
Reach New Markets: Attach Services to Enable New ScenariosManaged services packages with onsite and remote support.
Mobility solutions based on Office Communications Online.
Branch office solutions with Microsoft Online Services.
Deskless worker solutions with Office Web Apps, Exchange Online, and SharePoint Online.
Field operations solutions based on SharePoint Online and Microsoft Dynamics CRM Online.
LOB solutions such as project portfolio management solutions based on Windows Azure.
Core IO BPIO LOB
Expand Services: Up-sell and Cross-sell Add or attach cloud-based managed services offerings that include Windows Intune to Windows 7 upgrades.
Attach Microsoft Online Services with Office 2010 upgrades.
Up-sell installed Office 2003 and Office 2007 base to Office Web Apps.
Sell Microsoft Dynamics CRM Online and Microsoft Dynamics ERP solutions that complement on-premises solutions.
Upgrade earlier versions of Exchange Server and Lotus Notes deployments to Exchange Online.
Target SharePoint Server and Exchange Server on-premises deployment to sell Microsoft Online Services.
Cross-sell LOB applications such as knowledge management portal solutions built on Windows Azure.
Core IO BPIO LOB
Earn 6% recurring revenue with each customer, with one-time commission of 12% on all net new seats with Microsoft Online Services and Windows Intune.
Attach Microsoft Online Services to Enterprise Agreements (EAs).
Create and sell training and support packages
Receive additional Microsoft enterprise software advisor (ESA) fees for enrolling customers with EAs in Microsoft Enrollment for Dedicated Online Services (EDOS). (5,000+ seats)
Sell custom CRM applications built on Microsoft Dynamics CRM Online and online services for Microsoft Dynamics ERP via subscription.
Sell subscriptions to LOB applications built on Windows Azure.
“By building a high-availability infrastructure using virtualization, we saved $170,000 in [hardware] costs and another $66,000 annually on data center expense.”
-Buck Carraway, Director of Information Systems and Technology, Valerus Compression Services
Servicing Enterprise Customers
Offer migration and deployment planning for hybrid on-premises/cloud based environments.Develop customized sites and tools such as customer alerts with Microsoft Dynamics CRM OnlineProvide testing services such as user acceptance test planning and test environment creation.Provide business process integration with customer applications and implement workflowsOffer account provisioning services and Active Directory integration across Microsoft Online Services deploymentsMigration preparation services such as Active Directory preparation and identity management synchronization.Migrate on-premises data and content from messaging and collaboration platforms to cloud services such as Exchange Online and SharePoint Online.Migrate applications from on-premises deployments of Exchange Server, SharePoint Server, and Office Communications Server to Microsoft Online Services.Integrate unified communications solutions based on Microsoft Online Services with existing systems and applications for enhanced VoIP and presence functionality.Connect/integrate SAP applications to cloud-based applications using Windows Azure platform AppFabric.Extend and augment on-premises Microsoft Dynamics ERP with online services for Microsoft Dynamics ERPEnrich LOB applications with rich media interfaces using Windows Azure platform AppFabric.Migrate on-premises LOB applications such as manufacturing or financial solutions to cloud-based applications based on Windows Azure.
Core IO BPIO LOBMigrate and Integrate Solutions to the Cloud
Tier 1 end-user support and incident and problem management.Administrator and end-user adoption training.Cloud-based data protection and recovery services with on-demand performance using System Center.Desktop optimization, desktop management, and remote management services with Windows Intune.Managed services such as performance management for virtualized or hybrid public and private cloud environments. Managed security services for public or private clouds.Enhanced managed services contracts with Microsoft Dynamics CRM Online, online services for Microsoft Dynamics ERP, mobility and branch office solutions.Extended managed services contracts with cloud-based LOB solutions such as HR, sales automation, or vendor management applications.
Core IO BPIO LOBPackaged Solutions: Managed Services, Support, and Training
Identity and Active Directory readiness assessments, and user access policy design services.Infrastructure preparation services such as SharePoint assessments and architecture planning for hybrid on-premises/cloud-based environments.SOA integration to leverage and extend legacy applications with cloud-based services. Network operations center planning with System Center for virtualized infrastructure and private cloud environments.Security, control, and compliance policy and vulnerability assessments.Private cloud capacity planning and inventory management.Application portfolio planning and deployment services across cloud-based and hybrid environments.Offer business intelligence solutions with extensions to social media applicationsCustom application deployment such as collaborative commerce and enterprise performance management solutions. On-premises applications enhanced with additional storage and computing power via SQL Azure.Data management solutions such as inventory reporting solutions using SQL Azure.
Core IO BPIO LOBExtend and Customize Cloud Offerings
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The Cloud Opportunity
IT Requirements Capitalizing on the Cloud
Partner Opportunities
Making the Transition to Cloud Services
Calls to Action Opportunities in Other Customer Segments
“With Windows Azure, Sales Tax Office in the cloud provides a complete tax calculation engine connected to customers’ ERP systems with lower costs and less responsibility for managing the software, database, or server environments.”
- Scott Gruchot, Vice President of Advance Technology for CCH, a Wolter Kluwer business
Developing for Enterprise Customers
Backup and data recovery solutions built on Windows Azure and SQL Azure.Monitoring, management, and governance solutions for cloud computing environments.Tools for extending identity management across hybrid cloud networks using Windows Azure platform AppFabric.Virtual application deployment tools for Windows Azure.Solutions that facilitate cloud-based enterprise portal management. Solutions to support migration of existing applications to the cloud that use Windows Azure platform AppFabric.E-commerce packages for online sales using Windows Azure platform AppFabric.Standardized multitenant SaaS applications for hosting providers on Windows Azure.
Core IO BPIO LOBRepeatable IP
Enhanced storage for on-premises applications using Blob Storage in Windows Azure.Unified communications solutions designed to be integrated with existing on-premises communications infrastructure.Customized interfaces, tools, and add-on functionality such as reporting tools for Microsoft Online Services. Integrated data management solutions for hybrid environments using SQL Azure and Windows Azure platform AppFabric.Cloud-based versions of on-premises applications and new customized cloud applications using Visual Studio and other familiar toolsOn-premises applications extended with social media using Windows Azure platform AppFabric.Customized Office Communications Online applications with enhanced security and multiple role access.Risk analytics and reporting solutions based on SQL Azure. Online archiving systems based on SharePoint Online and SQL Azure. Product life-cycle management solutions integrated with SharePoint collaboration tools.Email marketing solutions integrated with Microsoft Dynamics CRM Online.Distribution solutions integrated with Microsoft Dynamics business management software applications using Windows Azure platform AppFabric.
Core IO BPIO LOBExtend and Customize Cloud Offerings
Network monitoring and tracking tools.Migration tools for MySQL or SQL-language applications to SQL Azure.Migration tools for Lotus Notes to Exchange Online Services.Applications enhanced with additional storage, computational power and mobile extensibility using Windows Azure and SQL Azure.Cloud-based versions of existing applications and new customized cloud applications using Visual Studio and other familiar tools.Mobile extensions of existing applications for anywhere, anytime access.Data migration tools to streamline migration to SQL Azure infrastructure.Debugging tools for custom cloud applications.
Core IO BPIO LOBRapid Development and Deployment
Cloud-based limited time trial offers that support marketing campaigns.Scalable applications designed for tiered pricing based upon usage thresholds.Cloud-based supply chain applications that extend across borders and time zones.Business intelligence applications that extend solutions into the cloud from on-premises applications such as SharePoint Server-based solutions.
Core IO BPIO LOBNew Applications and Solutions
Table of Contents
The Cloud Opportunity
IT Requirements Capitalizing on the Cloud
Partner Opportunities
Making the Transition to Cloud Services
Calls to Action Opportunities in Other Customer Segments
Enterprise services hoster Fpweb.net has reduced its operational costs by more than $900,000 and raised IT worker productivity by 30 percent by moving from VMware to Windows Server 2008 with Hyper-V.
Hosting Services for Enterprise Customers
Deliver highly scalable platform as a service offerings for burstable capacity and backup services.
Partner with ISVs to offer hosted versions of vertical applications for specific industries such as financial services.
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.
Sell hosted communication and collaboration services using Exchange Online, SharePoint Online, and Office Communications Online.
Core IO BPIO LOBBroaden the Marketplace
Offer shared and dedicated hosted services to technical decision-makers.
Provide enterprise hosting solutions such as storage and archiving for corporate compliance.
Build networking monitoring and asset management services.
Develop private cloud services and support using the Dynamic Data Center Toolkit for Hosters.
Create a “cloud in a rack” all-in-one hardware and software solution.
Add managed services on top of a private cloud offering such as role-based access and support for compliance tools.
Provide a development environment and tools with the Windows Azure platform.
Provision on demand with the high availability and elastic scale of SQL Azure.
Compensation Partners should evaluate their compensation plans and consider making changes to align them with cloud services. To motivate the behaviors needed to build a customer pipeline and drive sales, it is important to be transparent in establishing the key differences in the cloud services subscription model and the related changes in compensation. 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.
Cash flow As cloud services shift payments from one-time, up-front lump sums to recurring revenue streams, cash flows for cloud services will likely differ from your traditional business. Establishing a financial plan based on your cloud services strategy of choice is a foundational element of a cloud services business.
New skills for value-added services
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.
Delivery mechanisms 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. The cloud offers partners the opportunity to expand their traditional IT managed and outsourced services (such as backup and disaster recovery solutions, and patch management) to include cloud-specific services mentioned earlier in this guide. Partners can also offer services that span delivery mechanisms—for example, partners can offer managed services as an add-on to outsourced solutions.
Understanding the Impact of Cloud Services
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.
Table of Contents
The Cloud Opportunity
IT Requirements Capitalizing on the Cloud
Partner Opportunities
Making the Transition to Cloud Services
Calls to Action Opportunities in Other Customer Segments
This section offers a few recommendations and Microsoft resources to help you launch a cloud services practice.
Define your cloud services strategy
Prepare your organization
• 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.
• Evaluate options for shifting employees to cloud services roles such as marketing and technical sales specialist positions.
• Go to the Microsoft Learning Plan Tool to identify and enroll in sales and technical training.
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The Cloud Opportunity
IT Requirements Capitalizing on the Cloud
Partner Opportunities
Making the Transition to Cloud Services
Calls to Action Opportunities in Other Customer Segments
Making the Transition to Selling Cloud Services(Continued)
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 loyalty.• Create cloud contracts and service-level agreements (SLAs).• Assess your sales compensation plan.• Plan for long-term customer relationships with strong account management.
Evaluate financial models
• 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.
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.
Execute marketing and sales
• Invest in efficient marketing and demand generation by using tools such as search engine optimization (SEO) and telesales to minimize your customer acquisition cost.
• Provide your sales and technical staff with ongoing training.• Establish a customer trial management plan to drive a high conversion trial-to-paid conversion rate.• Promote your solutions, applications, and services on Microsoft Pinpoint.
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The Cloud Opportunity
IT Requirements Capitalizing on the Cloud
Partner Opportunities
Making the Transition to Cloud Services
Calls to Action Opportunities in Other Customer Segments
Migration Price Per Seat (500 mailboxes/migration event, averaged/month)
$14.63
$10.02
$9.10
Lotus Notes > Exchange Online
$37.00
$25.00
$19.00
Up to 5,000
5,001 - 20,000
20,000+
Prepackaged Offerings and Add-On Services
$2k$2k$2k
Partner of Record Fees*
Revenue Opportunities
BPOS~$16,000
Windows Intune~$68,000
Dynamic CRM Online~$29,000 (20 seats)
$5k
$18k
$20k
Deployment & Migration Revenue
$6k
$19k
Business Consuting & Services
(e.g., Configuring/managing BitLocker, Direct Access etc.)
$7k
$28k
$3k
Managed Services
The following table is an example of a rate card for standard deployment and migration services, such as directory preparation, messaging coexistence and messaging data migration (email, calendar, contacts). There are opportunities to earn revenue from additional services, such as data migration to Microsoft SharePoint Online, custom development, client software deployment and change management.
As shown in the chart below, these include business and consulting services, managed services, and Partner of Record (POR) fees for reselling Microsoft cloud services. For example, a 100-seat customer deal can yield over U.S.$100,000 in the first year alone.
*POR fees do not apply to all scenarios
Beyond deployment services, every deal offers opportunities for incremental revenue.
The cloud offers the opportunity to develop repeatable sales with a rate card approach.
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The Cloud Opportunity
IT Requirements Capitalizing on the Cloud
Partner Opportunities
Making the Transition to Cloud Services
Calls to Action Opportunities in Other Customer Segments
The table below summarizes key actions that partners can take to build a successful cloud services business.
• Resell Microsoft Online Services, Microsoft Dynamics CRM Online, and Windows Intune.
• Leverage up-sell and cross-sell opportunities (sell Windows Intune with Windows 7; sell 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.
Reseller
• Build a Windows Azure application development practice.
• Create cloud versions of existing applications.
• Explore the creation of an applications marketplace and consider developing resale channels such as hosting providers.
• Continually evaluate new features by testing with sample customers.
• Look at new potential geographies where you might offer your applications.
Independent Software Vendor
• 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.
• Market to developers looking for an on-demand development environment.
Hosting Provider
• Create a cloud migration offering for the solutions you currently offer.
• Develop a rate card with by-person and by-seat engagements for deployment 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.
Systems Integrator
Table of Contents
The Cloud Opportunity
IT Requirements Capitalizing on the Cloud
Partner Opportunities
Making the Transition to Cloud Services
Calls to Action Opportunities in Other Customer Segments
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 organizations the flexibility to run applications—or just store code or data—in the cloud, on premises, or with a combination of both. The platform also
includes the Microsoft SQL Azure technology platform, a cloud-based, 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.
• Dynamic Data Center Toolkit for Hosters is a free, partner-extensible toolkit that provides a framework for creating virtualized IT infrastructures.
• The System Center family of products lets you easily secure, update, monitor, configure, and troubleshoot computers from a single, web-based console—without the overhead associated with installing and maintaining an on-premises management infrastructure.
• Microsoft virtualization solutions provide you with a way to optimize infrastructure by providing services more rapidly and efficiently.
Table of Contents
The Cloud Opportunity
IT Requirements Capitalizing on the Cloud
Partner Opportunities
Making the Transition to Cloud Services
Calls to Action Opportunities in Other Customer Segments
The following table provides a high-level overview of the opportunities available by partner type beyond the enterprise 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.
Opportunities in Other Customer Segments
Table of Contents
The Cloud Opportunity
IT Requirements Capitalizing on the Cloud
Partner Opportunities
Making the Transition to Cloud Services
Calls to Action Opportunities in Other Customer Segments
• 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.
• Up-sell and cross-sell prepackaged solutions such as Microsoft Online Services sales support. • Target POP3 migrations to Microsoft Online Services.
Small Business (Partner-serviced IT)
• 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.
• 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.
Medium Business (Small internal IT staff – some IT services out-sourced)
• Sell Windows Server 2008 R2 with Hyper-V and System Center Virtual Machine Manager for private cloud scenarios.• 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.• Target Lotus Notes migrations and competing collaboration solutions with Microsoft Online Services.
• Drive Enterprise Agreement attach to Microsoft Online Services.• Offer branch office solutions with Microsoft Online Services.• Attach Microsoft Online Services to Office 2010 and Microsoft Dynamics CRM Online upgrades.• Sell customized CRM solutions built on Microsoft Dynamics CRM Online.
Enterprise (Sizable IT staff, including internal software development)
Up-sell, cross-sell, upgrade, and attach opportunities
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.
Table of Contents
The Cloud Opportunity
IT Requirements Capitalizing on the Cloud
Partner Opportunities
Making the Transition to Cloud Services
Calls to Action Opportunities in Other Customer Segments
Consulting, migration, integration, implementation, customization, and support opportunities
• Create cloud-based managed services such as remote management with Windows Intune. • Promote standardized cloud packages such as Exchange Online user provisioning and update support.
• Migrate installed POP3 and open source collaboration applications to Microsoft Online Services.
Small Business (Partner-serviced IT)
• Create cloud-based managed services such as remote management with Windows Intune. • Offer planning and deployment services for hybrid on-premises/cloud environments.• Integrate Active Directory services across Microsoft Online Services deployments.
• 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.
Medium Business (Small internal IT staff – some IT services out-sourced)
• Provision, manage, and deploy virtual machines in the cloud using the Dynamic Data Center Toolkit for Enterprises.• Provide network operations center planning using System Center for virtualized infrastructure.• Offer cloud-based data protection and recovery solutions with System Center.• Offer security and compliance policy assessments.
• Connect on-premises and cloud applications using Windows Azure platform AppFabric.• Develop customized tools such as customer alerts with Microsoft Dynamics CRM Online.• Provide user adoption training for branch office and mobility solutions based on Office Web Apps.• Migrate LOB applications from on premises to the cloud.
Enterprise (Sizable IT staff, including internal software development)
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.
Table of Contents
The Cloud Opportunity
IT Requirements Capitalizing on the Cloud
Partner Opportunities
Making the Transition to Cloud Services
Calls to Action Opportunities in Other Customer Segments
New applications and solutions and rapid development with repeatable IP opportunities
• Develop cloud-based versions of on-premises applications using Visual Studio and other familiar tools.
• Drive repeatable IP sales with off-the-shelf applications built on Windows Azure.
Small Business (Partner-serviced IT)
• 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.
• Create additional tools such as alerts for Microsoft Online Services.• Build SaaS LOB applications built on Windows Azure.
Medium Business (Small internal IT staff – some IT services out-sourced)
• Create debugging tools for custom cloud applications.• Develop customized cloud-based applications using Visual Studio and other familiar tools.• Build competitive tools for migration from Lotus Notes, MySQL, and SalesForce.com to Microsoft Online Services.
• Build multitenant SaaS applications on Windows Azure. • Enhance applications with additional computational power and storage with Windows Azure.
Enterprise (Sizable IT staff, including internal software development)
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.
Table of Contents
The Cloud Opportunity
IT Requirements Capitalizing on the Cloud
Partner Opportunities
Making the Transition to Cloud Services
Calls to Action Opportunities in Other Customer Segments
1 IDC, Worldwide and Regional Public IT Cloud Services 2010–2014 Forecast, Doc #223549, June 2010 2 Gartner ID:G00171813. “Market Trends: Software as a Service, Worldwide, 2008-2013 Update.” November 2009.3 Gartner. “Predicts 2010: Video, Cloud and UC Services Loom Large in Enterprise Communication.” December 2009.
Opportunity Overview for Hosting Providers
Hosting, selling, and add-on service opportunities
• Build your own managed cloud infrastructure using Dynamic Data Center Toolkit for Hosters.
• Sell hosted communication and collaboration services using Exchange Online, SharePoint Online, and Office Communications Online.
Small Business (Partner-serviced IT)
• Sell network monitoring and asset management services.• Offer private cloud services and support using the Dynamic Data Center Toolkit for Hosters.• Provide enterprise hosting solutions, such as storage and archiving for corporate compliance.
• Create cloud-based managed services contracts such as data protection and disaster recovery.• Host horizontal and vertical applications.
Enterprise (Sizable IT staff, including internal software development)
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.
• 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.
• Offer “burstable capacity” and backup services with SQL Azure on-demand provisioning.
Medium Business (Small internal IT staff – some IT services out-sourced)
Table of Contents
The Cloud Opportunity
IT Requirements Capitalizing on the Cloud
Partner Opportunities
Making the Transition to Cloud Services
Calls to Action Opportunities in Other Customer Segments
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