The Intersection of Tech & Business:

Charting the Cloud’s Future

Nan Boden, PhD, MBAHead of Global Technologies Partners, Google Cloud

DECEMBER 6, 2016

SecurityCost Savings Digital Business

70% $305 Billion ⅔ CEOsReduction in capital

and operational costs

versus on prem

Cost of cyber attacks

to hospitals over

next 5 years

Focusing on digital IT & business

transformation

strategies for 2016

Cloud Computing Enables New Technologies &

New Business Models

The Evolution of Cloud Economies

Standard Industry

Models Are Changing

New Selling Motions; New

Consumption Models

New BuyersShift from Capex

to Opex

Proprietary + ConfidentialSource: “As Cloud Rolls In, Partners Should Transition from VAR to Value-Added Service Provider,”

CRN, quoting Tim Harmon, Forrester analyst (August 2015).

Revenue Mix Today:Partners Need to Transition from Value-Added Resellers

35%65%Products Services

Standard Industry Models Are Changing

Proprietary + ConfidentialSource: “As Cloud Rolls In, Partners Should Transition from VAR to Value-Added Service Provider,”

CRN, quoting Tim Harmon, Forrester analyst (August 2015).

Revenue Mix by 2020:To Value-Added Service Providers

60%40%Products Services

Standard Industry Models Are Changing

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The Shift from Capex to Opex

Source: "What Customers Want: The Imperative for a New Value-Added Services Approach in the

Cloud-Mobile Era," Tim Harmon, Forrester (January 2016).

Implementing

software-as-a-service(SaaS)

Packaged applications

implementation or upgrade

Business intelligence/data management:

planning/implementation

Infrastructure virtualization and automation

program to establish a private cloud

Overall digital strategy

Customer experience strategy

Implementing a business or technology

change management program

Multichannel strategy

Traditional IT servicesBusiness services

Customers employ channel partners for business

services more than for traditional IT services“In which of the following areas has your business unit/IT department used or do you expect to use technology firms?”

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New Selling Motions; New Consumption Models

Traditional License

& Maintenance

Business Model

Cloud Subscription &

Consumption Usage

Model

Customers Are Demanding:

● Faster Time-to-Value

● Minimal Upfront

Commitment

● Flexibility & Scalability

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New Buyers

Source: "What Customers Want: The Imperative for a New Value-Added Services Approach in the

Cloud-Mobile Era," Tim Harmon, Forrester (January 2016).

55% 56% 58%

Line of Business (LOB) customers increasingly involved

in services purchase decisions“Which of the following categories of technology decision-making are you significantly involved in?”

SoftwareDigital

Agencies

Third-party

IT services

Base: 1,205 global services

business decision-makers

The Opportunity: TAM Expected to ~Double by 2018

Source: Gartner WW Estimates of Total Addressable Market for Enterprise Cloud Software

$0B

$20B

$30B

$40B

$ T

ota

l A

ddre

ssable

Mark

et

2016 2018

$60B

Cloud Current and Expected Total Addressable Market- Global

Best CaseCurrent Expected Case

$10B

$15B$35B

$57B

$70B

$70B

$50B+28%

/yr

+41%

/yr

Increase Revenue with Multiple Business Models

Source: IDC 2016

Gross margin by Cloud business model, IDC

Partner Profit Scenarios:

Based on Business ModelsPackaged IP

Technology solution to

solve customer need

Managed

ServicesCustomer lifetime

value driven

Professional

ServicesProject based

Reseller - firstSales and

marketing driven

Innovation is Key to Your Success & Driving Value-Added Services

More opportunities to redefine innovation

+ +

=

Value-Added Services Drive Opportunity for the Channel

with IoT

IoT will grow to $1.7 trillionin 2020, up from $655.8 billion in 2014.

– IDC

Source: “Supercharged: How Solution Providers Are Moving The Needle In Today’s Innovative IoT

Market,” CRN (October 2016) (August 2015).

““

Principles of Partnering for Google Cloud

Open Innovation Fairness Transparency Shared Success

leads us to open platforms and ‘build + partner’

Non strategic

project

Strategic / high

value project

“Cloud native”

customer

Traditional IT

environment customer

Entry-

level

Packaged

IP

Cloud business models are defined at the intersection of

customer need and partner capabilities

Managed Services

Professional Services

DifferentiatedComplex/ custom

Reseller-first

Example: Backup Use-Cases

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Partners Can Help Assemble Solutions

What We See

Customers - now more than ever - need the

combination of innovation and services

partners to deliver the solutions that help their

businesses thrive.

The rapid move to Cloud is disrupting existing

business models, but….

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Thank You!