Winning in the Cloud EconomyKeynote Preview

Thomas Lah, Executive Director, TSIA

"I skate to where the puck is going to be, not where it has been.” - Wayne Gretzky

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There are two mega-trends disrupting the business model of technology providers

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Commoditization of feature functionality

Acceleration of new consumption models (technology-as-a-service)

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What does this mean for the tech industry?

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New business models are being created

New organizational

capabilitiesare needed

! !New offer types

are required

!

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The market forces in play point toward XaaS

Profitable Legacy Model

XaaS 2.0

Commoditized Legacy Model

XaaS 1.0

OEM Scenarios

Demand for New Consumption Models

Pro

fitab

ility

of

Cor

e O

fferin

g

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And we’re beginning to see a positive shift in OI

Gross Margin S&M G&A R&D OI-20%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

80%68.0%

38.8%

16.4% 18.4%

-6.5%

68.1%

36.3%

16.3% 18.1%

-3.8%

Cloud Business Model Performance

Q1 2015 Q1 2016

Source: TSIA Cloud 40 Q1 2016

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But only 10% of companies have successfully made the transition to profitable XaaS

10% 10%

60% 20%

OEM Scenarios

Demand for New Consumption Models

Pro

fitab

ility

of

Cor

e O

fferin

g

OEM Scenarios

Why aren’t we already there?

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The XaaS profile drives decisions in three areas

Introducing the Iron Triangle

Portfolio& Pricing

Customer Engagement ModelFinancial Keys

Portfolio& Pricing

Clearly define your XaaS offer and how it should be priced

Work through each phase of the customer engagement model for your XaaS offer

Customer Engagement Model

Create the parameters for how success will be measured for your XaaS offer

Financial Keys

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What other plays should you run to grow a profitable subscription business?

www.tsia.com

Play #1: Register to the conference and join us in San Diego

The book that will help guide your decision-making and execution around the “as-a-service” model to put your company on a path to profitable growth.

Play #2: Grab a free copy of TSIA’s new book

Winning in the Cloud EconomyMay 2, 2016 | 2:00 PM

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Play #3: Attend the full keynote presentation

Presented by Technology Services Industry Association

www.technologyservicesworld.com