isv vision and strategy gianpaolo carraro director, developer and platform evangelism...
TRANSCRIPT
ISV Vision and Strategy
Gianpaolo Carraro
Director, Developer and Platform Evangelism
http://twitter.com/gcarraro
Agenda• A Look Ahead• Key trends• Business models• Q&A
A Look Ahead...
Rich Experiences
3 Screens
• Rich and powerful application UIs• 3 Screens• Development continuum across form factors (.net)
Windows 7• Improved experience• Focus on fundamentals• Application modernization
Software Logo Program msdn.microsoft.com/swlogo
Mobility / Work-Life Merge(7 days Week End)
is this youroffice?
or is this youroffice?
how about this?
how about this?
Always access / Shared context
Cloud• As elastic computing fabric• As elastic storage fabric• As distribution channel
• As shared context
Business Models
The XBOX example
Subscriber Acquisition Const (SAC) and Churn
• Based on public SaaS company SEC filing
• Does not matter who
• Not Microsoft
Revenue
GOOD!
Not so much!
Subscriber Acquisition Cost (SAC)
“Exposed” for 22 months
Impact of Churn: 10% Churn
Ouch!!
Impact of Churn: 4% Churn
StillOuch!!
Break Even but < 1% churn!?
Impact of Churn: Break Even
0 Churn?
What to do? (business side)
• Long term contracts (24 months locking)– Remove some of the value proposition– Often very large churn at end of contract– Or “re-acquire” customer (more SAC)
• Get money upfront – No more churn sensitive
• Lower SAC– Distribution channel (e.g. white labeling)
What to do? (architecture side)
• Have a CLIENT strategy!– Not subsidized device (otherwise SAC)
• Examples:– Mobile phone (of course)– Heart monitor device connected to cloud service– Appliance
Selling Hosted Version vs. License• ↓ Lower margins
– Cost of sale is higher• e.g. hardware depreciation (from pure bits, to bits + atoms)
• ↑ Bigger addressable market– Not only ‘software line’ in IT budget
• Illustration (overly simplified math):– 80% margin on $1M (software) line -> 800K– 20% margin on $5M (software + support + hardware) line -> 1M
Attached Services
• Additional revenue streams (typically with much lower cost of sale)
• Leverage the installed based
• The well proven “any fries with that?” strategy
Next Steps
Understand the platform
Understand the business models
Subscription
Advertising
Licensing
Transaction
Final thoughts:2 fundamental questions you should ask yourself (if not asking already)
Note:I don’t have the answers... But I have strong opinions.Happy to share them at the party
1) Do I believe rich experiences are a competitive advantage?
2) Do I believe providing choice to my customers in terms of how and where to use my application is a competitive advantage?
THANK YOU!
