packaging, pricing and positioning your cloud solutions...
TRANSCRIPT
Packaging, Pricing
and Positioning
Your Cloud Solutions (and IP)
Sharka Chobot
About Sharka
Chief Transformation Officer, Neural Impact
30 year marketing executive (Simply Acctg (Sage), Pivotal
CRM, ATI Technologies, Epicor ERP/Vantage Point)
Professor Marketing & Behavioral Science
Advisor to Microsoft & Tier 1 & 2 Microsoft AX/NAV/CRM
Partners: Europe, North America
Creator: CRM Product Category
Creator: Microsoft EIPP Content
Sharka’s contact info:
(604) 987-4275
www.neuralimpact.ca
Stop Being PRODUCT Driven
Industry
Solutions
Microsoft Social Engagement
Collect club mentions and other data from Twitter, Facebook, and other social media sites
Fan Engagement Platform
Captures and stores every interaction with a fan, including mobile check-ins at the club’s stadium, online fan profile updates on the club’s official website, and online merchandise purchases.
Azure aggregated data into social segmentation of the individual fan
Extended Video PlatformAzure Media Services, App Service Media Player, SearchNew and past video of Real Madrid matches
.Customer AppNET Framework + Microsoft Visual Studio 2013
Fans access the app on their mobile phones, tablets, or wearable devicesSearch data & stats on club’s players and games
March 14, 2016
Microsoft Office 365
Microsoft Dynamics CRM Online,
Power BI
Azure
Real Madrid C.F.
450 million fans around the globe,
with the Microsoft Cloud
INTEGRATED INDUSTRY SOLUTION
Packaged IPAverage Revenue: $2 - $5K3
Margin: 65%
• Industry-specific Workflows
• Function-specific Workflows (e.g.
HR, Procurement)
• Mobility Solutions
• Office Connectivity & Other Plug-
Ins & Add-ons
• External Portals for End Customer
Information
• Pre-Configured Dashboards
Managed ServicesAverage Revenue: $2-$5K3
Margin: 45%
• Reporting & Analytics
• Online Training & Self-paced
Learning
• Support Services
• Social Listening and Sentiment
Analysis
Part
ner
Reven
ue
Project ServicesAverage Revenue: $2.5-$15K3
Margin: 35%
• Solution Analysis, Scope, & Design
• Integration and Data Migration
• Cloud Readiness Assessment
• Deployment
• Business Process Transformation
Capitalize on theMarket Opportunity
Source: The Future of Corporate IT, 2013-2017 2. CEB Survey of 165,000 employees 2012 Survey on Self-Service BI and Analytics, Unisphere Research 3. MDC
Research, Microsoft Cloud Profitability Scenarios May 2015
Need Minimum
Feasible
Concept
Lo
w In
vest
men
t
Minimum
Viable
Product
MVP
Hig
h In
vest
men
t
Full
Product
MacroeconomicMacro level economic shifts.
Rapid industrialization of 3rd world
Cost of energy increasing
Cost of labour increasing
Unpredictable commodity prices
Mining & Construction sectors
fluctuating
Automotive sector rebounding
Fracking , Oil & Gas industries strong
Emerging Economies : Brazil, Russia,
India and China still growing
Public sector infr. projects flat
Renewable energy projects (solar,
wind) drive demand
Regulatory
Anticipated or legislated changes
EPA Wastewater treatment
OSHA/Dept. of Labor – increasing
workplace safety regulations
Clean Air Solvents and Lubricants
Focus on Explosion Proof Compliance
Industry ConsolidationMerger and acquisition activity
• Expand geographic reach, expand
customer base and entering new lines
of business and primary M&A drivers
Product/Service
CommoditizationInability to differentiate based
on product or service offering.
Extremely difficult to differentiate
↑ New Prod. Development ↑ New Equipment Sales
↑ Labor Costs ↓ Differentiation
↑ Warranty Periods ↑ Field Service Contracts
↑ Cost of Sale ↓ Profitability
↑ Capital investments ↑ Automation Investments
↑ New Services Offerings ↑ Technology Investments
↑ Penalties ↑ Skills Training
↑ Receivables ↑
↓ ↓
↓ ↓
Competitive BehaviorChanges in competitor behaviour/new
entrants.
BRICs producing lower cost machines
(no regulatory constraints, lower energy
prices, lower labor costs, China & Mexico)
High labor content cost advantages
Customer Demand/Behavior
ShiftsChanges in Customer Behavior
Personalization & Customization -
customer driven configurations &
packages (product + service offerings)
Demand for improved service
Asset management (EAM) and flexible
Manufacturing is also expected to
drive factory-enterprise integration,
significant potential for automation
and customized service solutions in
industrial applications.
Emotional
Reliable
Pretty Much Usable
Basic Functionality
What is in an MVP?
Not the MVP
Emotional
Reliable
Pretty Much Usable
Basic Functionality
This is the MVP
50% of Features in New Releases
are Never Used!!!
Services Revenue
80%
Reactive
Services
Recurring
Services
One Time Implementation
Product Revenue 20%
IP Revenue
Ongoing
Recurring
Product
Revenue
Up Front
Perpetual
Licenses
Traditional Revenue vs Cloud Model License Revenue Up Front
Services: Implementation & support contract
Maintenance Revenue
Years 2-4
Upgrade
Revenue
Subscription
Revenue
Need for New Customer Ads
Need to Upsell
Need to Cross Sell
Need to Lower Costs through repeatable IP
Future
MS Online Service Marketing Rebate or Discount for Selling
ERP Online
Customer
Engagement
Solution
Online
Microsoft
Security
Essentials
Mobile
Device MgmtPortals Office 365 PowerBI
Non Strategic Project
Services
Data
MigrationDeploymen
tIntegration
Configurati
on
Customizati
on
Managed Services
Help DeskOn Demand
Training
Packaged Vertical Industry IPIndustry-
specific
Workflow
s (e.g.
complianc
e, food
manufact
uring)
Function-
specific
Workflow
s (e.g. HR,
Procurem
ent)
Mobility
Solutions
3rd Party
Add-ons-
(ISV
MS Office
Connectiv
ity &
Other
Plug-Ins
& Add-
ons
External
Portals for
End
Customer
Informati
on
Pre-
Configure
d
Dashboar
ds
Industry
Related
Content
High Value Professional Services
Strategy
Advisory
Cloud
Transformation
Business
Impact
Workshop
High Value Strategic
Professional Services
Social
Monitoring
Sentiment
analysis
Optimization
Services
Benchmarking
Service
Commoditization
Differentiation
20% One time 80% Recurring
Packaged Solutions
Uncertainty
Confident Decision
One Fixed
Out of the Box Price
is NOT an OPTION!!!
Pricing Models
1. Perpetual License
2. Consumption – usage based on criteria, pay as you go
3. Tiered – scalable, pay based on levels criteria
4. Freemium– capacity, feature, time, use case
$515 $626 $867
http://thenextweb.com/google/2013/02/21/google-debuts-four-tiered-247-support-for-its-cloud-platform-services-prices-start-at-0-to-400-per-month/
NetSuite
OneWorld Pricing
Starting from:
$499.00/month
31% Year-over-
Year Increase in
Q4 Revenue of
$206.2 Million
Storage, # of Users
I2GB
Storage free
Incrementally
price 10GB -
$10 per
month under
“Pro” plan
Enterprise
sales of 1
TB+
Negotiated
Basis
Certain Features Locked
Vertical Value add FREE Forever Applet
https://www.quickenloans.com Copyright of respective owners.
Scarcity & Loss Pricing Approach
Source: http://roseasp.com/wp-content/uploads/2014/11/GP-vs-Intacct.png
Bundle: bundle different services and
package them as one offer
Incent: leverage information of usage and
consumption behavior to incentivize
uptake of new services
Reward: give limited period bonus
services once certain criterion are met
and/or usage levels have been reached
Inform: send near real-time notifications
of key account activity or critical usage to
clients
Satisfy: deliver unbilled usage information
or enforce credit limit checks to avoid bill
shocks
Questions?
Sharka Chobot
Sharka’s contact info:
(604) 987-4275
www.neuralimpact.ca
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