Microsoft ISV Partners & The Cloud. Managing & Monetizing the Business Transition

Transcription

1 Microsoft ISV Partners & The Cloud Managing & Monetizing the Business Transition

2 Executive Summary This presentation is intended for a business and management audience in the ISV community This presentation has particular relevance to Microsoft Partners and ISVs building applications in.net It looks at: the importance of the cloud for ISVs, what the transition means for them how they might best harness the cloud for their business how they can mitigate against the double edged sword of a cloud transition (short term costs / potential revenue lag) with strategies for better monetization of their products

3 The Transition to Cloud Computing What it means for Microsoft ISV Partners

4 The Importance of the Cloud...By 2012, 80% of fortune 1000 enterprises will be using some kind of cloud service, and 20% of enterprises will own no IT assets......early adopters are finding serious benefits...cloud computing is real and warrants your scrutiny as a new set of platforms for business applications......the global market for Cloud-based applications is going to be worth approximately $17billion in 2010 with a projected annual compound growth rate through to 2013 of 24%...

5 Microsoft ISV Partners & The Cloud Twenty million businesses and over a billion people already use Microsoft Cloud services 90% of Microsoft s engineering staff are working on cloudrelated projects There is a significant services opportunity for ISVs for every $1 of Microsoft & related cloud software sold ISVs can increase their market reach for existing products & services as well as develop new product & service offerings around the cloud

6 What is cloud computing? Traditionally, organisations have owned and / or managed their own IT infrastructure This presents 2 fundamental problems: It s expensive (to buy, rent, run & maintain hardware & software) It s inflexible (scaling it up or down according to your changing needs) Cloud computing changes this model. Organisations no longer own and / or manage IT. They simply access computing resources on demand, over the web, from highly optimized data centres It s like moving from having a well in your yard...to having a tap in your kitchen

7 Benefits of Cloud Computing for the Enterprise Reduces Costs Improves Computing Power & Storage Increases Automation & Reliability Improves Flexibility / Elasticity Facilitates Worker Mobility

8 Top 4 Concerns for Enterprises about the Cloud Security Privacy Reliability Operational Control

9 Cloud Computing Models Cloud deployment models Private cloud dedicated cloud on a private network Public cloud multi-tenanted model, offers the highest level of efficiency & shared resources Hybrid cloud combines features of both, some resources are shared, others are dedicated Cloud service models IaaS (Infrastructure as a Service) provides computing power & storage capacity from the cloud PaaS (Platform as a Service) provides a platform, or runtime environment, with which to create & deploy applications SaaS (Software as a Service) provides ready-to-go applications that use a combination of cloud based compute and storage services

10 Microsoft Cloud Strategy IT as a Service Source; Kevin Turner, COO, Microsoft Corp.

11 Microsoft Cloud Strategy IT as a Service Source; Kevin Turner, COO, Microsoft Corp.

12 Why should the ISV be interested in the cloud? Because your customers want to move to the cloud Because it will change the software business completely. It s up to you to determine if the impact on your business is positive or negative Because it opens up numerous and varied opportunities for developing your business

13 Transition to the Cloud: Strategies the ISV can use to harness Cloud Computing Move data storage to the cloud. Why? Cost Savings Reliability Data security & Integrity Move data processing to the cloud. Why? Elasticity; sometimes you just need more horsepower. Efficiency in collaborative apps Create a SaaS version of your application. Why? Drive sales New types of customer Revenue assurance

14 The Windows Azure Platform Microsoft s flagship cloud platform technology Competes with Google App Engine, Amazon Web Services, Force.com etc. Build or buy decision has been made for the ISV, allowing them to concentrate on their core business Azure is a natural evolution path for an ISV moving to the cloud Massively scalable, secure, robust, highly available Suck-it-&-see options Pay-as-you-go model

15 The Windows Azure Platform Source: David Gristwood, Microsoft DPE

16 Transition to the Cloud: Why would you move your application to Azure? If your application needs high reliability e.g. medical diagnostics or airline ticketing If your application is collaborative e.g. scheduling, rostering, gaming If your application needs scale e.g. Social networking, e-commerce If your application has peaks and troughs E.g. Online ticketing If your application is purpose or event specific E.g. Marketing campaigns or mobile apps Some Source Material: Dave Chappell: Cloud Platforms, A Perspective

17 Transition to the Cloud: Why would you move your applications to Azure? If your application needs external storage e.g. An application that archives data If your typical customers Don t have their own data centre Want to avoid IT spend If your application must fail or scale fast e.g. Start-ups / large ISVs with high levels of innovation If your application has a diverse range of clients e.g. Mobile or tablet applications Some Source Material: Dave Chappell: Cloud Platforms, A Perspective

18 Software Monetization Strategies Sustaining ISV Revenue in the Transition to the Cloud

19 Typical ISV Stakeholders What are they looking for? Product Management Finance Business Goals: Revenue & profitability Customer acquisition Innovation Cost control Brand building / mindshare Sales & Marketing Engineering

20 The Changing Face of the Software Business The software business is rapidly evolving in step with changes being felt across the wider technology landscape Mobile computing, the cloud, virtualization etc. herald new models that redefine how software is built, sold, distributed, deployed, consumed & paid for. Customers are demanding better value, a clearer ROI, more flexibility and more predictability from vendors The smart ISV must align with their customers changing demands and exploit these new emerging business models

21 Transition to the Cloud: Potential Commercial Impacts for the ISV Potential Costs Operational overhead Development cost Services impact License revenue lag Customer lock-in Potential Benefits Revenue uplift Revenue predictability New business revenue New market revenue Reduced cost of collection Upgrades Customer relationship

22 Optimal Transition Strategy Mitigate negatives / Exploit positives Short term = Increased costs Revenue lag Cloud Transition Strategies: Phased approach to the cloud Hybrid approach to the cloud Purpose-based funding Software Monetization

23 Software Monetization Smart Licensing Strategies Monetization is about maximizing the return on your software development investments Smart licensing can drive monetization in 3 ways: Preventing Revenue Leakage How to maximise the return from your existing customer base? Reducing the Cost of Sale How to reduce the cost of bringing product to market? Driving New Revenue How to drive new revenue today from current and new customers?

24 Software Monetization Preventing Revenue Leakage Software Piracy 50% of all software globally is not paid for. Pirated software has the added risk that it can often contain malware With good software protection, this problem can be addressed License Compliance Without proper tools, compliance is difficult for the ISV to track and for end-users to achieve. This gives rise to casual piracy (like seat sharing or using software after the license expiration). Addressing casual piracy can have a dramatic affect on the ISVs revenue Reverse Engineering / Tampering A software application embodies the IP which the ISV has in the marketplace, and it s under constant threat. Protecting that IP against tampering, theft & reverse engineering is critical to the ISVs success

25 Software Monetization Reducing the Cost of Sale Separating Product Development from Product Configuration Today s ISV needs SKU agility the ability to package their product in a multiplicity of ways - in order to satisfy market needs. It s a market-facing task that requires continuous refining as required Empowering the marketing & sales teams with the tools to package & configure, independent of development, means releasing engineering from a task that is costly and difficult to scale Sophisticated License Management With the right license management tools to create, assign, distribute & maintain entitlements to their software in the market the ISV can align their business to achieve a lower cost and a greater ROI Empowering the end user to easily manage what they buy, how much they use, and how its paid for can reduce the operational burden while improving overall customer satisfaction

26 Software Monetization Driving New Revenue Exploit New Business Models A key challenge is the ability to repurpose your products for new business models. Applications that can handle new payment models, new licensing models and new software deployment and distribution models will be able to reap the rewards The Customer of One As the industry evolves, customers expect more from their software and demand more from vendors more choice of feature & form, more options on price & payment, more versatility & personalization. Providing this level of choice gives the ISV a commercial edge Usage Analytics & Feedback Real time feedback on how your products are being used, when and for how long, by whom, and which features gives you the ability to act on this intelligence and drive revenue accordingly

27 In Summary The Cloud is here. The ISV should be planning for this reality now Cloud is a better way of doing things, and will benefit the agile ISV The transition needs careful management, with risk mitigation a priority Re-purposing your products to take advantage of new & emerging business models can help drive monetization, exploit new market opportunities & plug revenue gaps

28 Appendix: About InishTech

29 About InishTech Spin out from Microsoft Headquarters in Dublin, Ireland Mature, stable, proven technology platform InishTech helps ISVs to monetize their software products Enabling the ISV to easily manage and control how their software is bought, used and consumed in the market Taking your most valuable asset, your IP, and turning it to revenue

30 Over 100 technology companies use InishTech

31 InishTech SLPS SLPS is a cloud-based service that allows you to easily manage the complete software licensing lifecycle Built on the Windows Azure platform Designed from the ground up for the.net ecosystem Unique, patented code protection & transformation mechanisms at its core

32 SLPS How does it work?

33 What does SLPS give the ISV? Easy Management of the Complete Software Licensing Lifecycle

34 What dos SLPS give the ISV? SKU Agility: Product Flexibility & Reduced Time to Market Fixed Product SKU Dynamic SKU Creation License Terms Price Business Terms Functionality Price A Business Terms A License Terms A Feature A Feature C SKU 2 Feature B License Terms B SKU 1 Feature A Feature D Price B Business Terms B New SKU generation time = Change Code + Rebuild + Re-Test + Re-deploy New SKU generation time = Issue license in minutes

35 Summary Learn more about InishTech or get a FREE 30 day evaluation of SLPS at Contact us at sales@inishtech.com