The four steps of Digital Transformation. Andrew Smith Senior Director, Strategy & Operations IoT Device Partners, Microsoft

Transcription

1 The four steps of Digital Transformation Andrew Smith Senior Director, Strategy & Operations IoT Device Partners, Microsoft

2 Here s what we re covering Four steps of digital transformation Differences between PaaS & SaaS P&L opportunities by partner type How to partner with Microsoft

3 Digital Disruption and the 4th Industrial Revolution Mechanized production Mass production Automated production Digitized production 1780s 1870s 1970s 2015+

4 Digital Transformation Business Insights Operational Efficiencies New Business Models Features and Rev Streams Sensor proliferation Data collection, transfer, storage and processing New insights - understanding product and service more deeply Process engineering and product engineering improvements Cost reduction Time to market reduction Predictive maintenance Provision of services alongside devices and hardware. Devices / hardware / machines delivered as a service. Enablement of ancillary businesses, new businesses and transformed businesses

5 Digital Transformation Business Insights Operational Efficiencies New Business Models Features and Rev Streams Sensor proliferation Data collection, transfer, storage and processing New insights - understanding product and service more deeply Process engineering and product engineering improvements Cost reduction Time to market reduction Predictive maintenance Provision of services alongside devices and hardware. Devices / hardware / machines delivered as a service. Enablement of ancillary businesses, new businesses and transformed businesses

6 Digital Transformation Business Insights Operational Efficiencies New Business Models Features and Rev Streams Sensor proliferation Data collection, transfer, storage and processing New insights - understanding product and service more deeply Process engineering and product engineering improvements Cost reduction Time to market reduction Predictive maintenance Provision of services alongside devices and hardware. Devices / hardware / machines delivered as a service. Enablement of ancillary businesses, new businesses and transformed businesses

7 Digital Transformation Business Insights Operational Efficiencies New Business Models Features and Rev Streams Sensor proliferation Data collection, transfer, storage and processing New insights - understanding product and service more deeply Process engineering and product engineering improvements Cost reduction Time to market reduction Predictive maintenance Provision of services alongside devices and hardware. Devices / hardware / machines delivered as a service. Enablement of ancillary businesses, new businesses and transformed businesses

8 Digital Transformation Business Insights Operational Efficiencies New Business Models Features and Rev Streams Sensor proliferation Data collection, transfer, storage and processing New insights - understanding product and service more deeply Process engineering and product engineering improvements Cost reduction Time to market reduction Predictive maintenance Provision of services alongside devices and hardware. Devices / hardware / machines delivered as a service. Enablement of ancillary businesses, new businesses and transformed businesses

9 Transformation in your Market offering Profitability Customer relationships From MRI Scanner to Remote diagnostics subscription From Industrial Machine to Machine uptime subscription From Thermometer to Temperature Control Service From hardware margin to subscription margin From capex to capex+opex From transaction relationship to annuity relationship From procurement relationship to business owner relationship

10 IoT Partner Value Chain End Points Security Connectivity Services Business Consultants Distributors Developers Regulators

11 IoT as a service models Suitable for more complex solutions requiring high controllability, high customization, with low endpoint volume Suitable for less complex solutions and common use cases requiring low degree of customization, with high endpoint volume

12 IoT as a service models in Microsoft Azure IoT Solution Accelerators Solution accelerators for customers with cloud solution expertise and the need to fully customize Azure IoT Central Fully managed IoT SaaS No cloud solution expertise required Built on the same Azure IoT Platform Services SaaS PaaS

13 Opportunities for P&L transformation by business type

14 Opportunities for P&L transformation by business type ISV New Insight opportunities Operational efficiencies Business Model changes New Revenue opportunities Enhance customer experience by understanding how product features are used. Increase speed to market and reduce cost through process automation. Subscription-based services. Consumer apps represent a new channel for future services.

15 Opportunities for P&L transformation by business type System Integrator New Insight opportunities Operational efficiencies Business Model changes New Revenue opportunities Remote monitoring of systems and processes. Remote troubleshoot and problem resolution. Service engineer arrives with right parts to fix physical infrastructure. Selling repeatable solutions and retaining IP. New services offerings such as business consulting, data science and device lifecycle management.

16 Opportunities for P&L transformation by business type Solution Aggregator New Insight opportunities Operational efficiencies Business Model changes New Revenue opportunities Remote monitoring of systems and processes. Single relationship and billing for customer including applications, infrastructure and cloud. Aggregation of hardware and softwarebased connected device solutions for specific verticals. Subscription-based revenue. Higher margin for higher value services than pure hardware distribution.

17 Opportunities for P&L transformation by business type Device Builder / OEM New Insight opportunities Operational efficiencies Business Model changes New Revenue opportunities Insight on how product is used in the field. Decrease manufacturing downtime by predicting and resolving issues before they happen. Product as a service. Attach and monetize new services.

18 Case studies

19 Connected Buses Image needed Wi-Fi hardware & infrastructure Passenger experience Connect cameras Address GPS 'canyon-effect Driver connectivity Fleet management Commuter mobility app Wi-Fi access point Trip information Traffic information to non-passengers Multi-lingual Ticketing, subscription

20 Kontron s Digital transformation 4.0 End-to-end SLAs to operate IoT network Consulting & development services Application ready I-IoT framework Value for Kontron Extended offer and services New business models (pay per use, SLA ) Operation efficiency in our manufacturing Value for customers Enable our customers in their digital journey! Easier, simpler, faster, cheaper digital transformation

21 Start with the business model

22 Outcomes from a Business Model Workshop Define value proposition Understand organizational impact Assess organizational capability Secure business stakeholder buy-in Input to Architectural Design

23 Business Model Canvass Partnerships Key Activities Value Proposition Customer Relationships Customer Segments Resources Channels Cost Structure Revenue Stream Strategyzer

24 Business Model Canvass Partnerships Key Activities Value Proposition Customer Relationships Customer Segments Resources Channels Business Value Cost Structure Revenue Stream Strategyzer

25 Business Model Canvass Partnerships Key Activities Value Proposition Customer Relationships Customer Segments Resources Channels The Customer Cost Structure Revenue Stream Strategyzer

26 Business Model Canvass Partnerships Key Activities Value Proposition Customer Relationships Customer Segments Resources Channels Organizational Capability Cost Structure Revenue Stream Strategyzer

27 Organizational Capability Partnerships Key Activities Resources Organizational Capability

28 Business Model Canvass Partnerships Key Activities Value Proposition Customer Relationships Customer Segments Resources Channels Cost Structure Revenue Stream Costs Strategyzer

29 What s the cost of an IoT Solution? To estimate costs we need 2 things: 1. Solution Architecture tells us what services will be used 2. Business Volumetrics determines scale of messaging & services Azure Pricing Calculator Cost Model Cost Structure Costs

30 Business Model Canvass Partnerships Key Activities Value Proposition Customer Relationships Customer Segments Resources Channels Cost Structure Revenue Stream Revenue and Pricing Strategyzer

31 Business Model: Predictive Maintenance Partnerships Key Activities Value Proposition Customer Relationships S/W development H/W device partner Cloud Security / auditing Hardware (Machine engineering, Sensors etc.) Connectivity Software Dev Data Science E2E Integration Security Resources Engineering Operations (Process, Data) Project Management Business Analysis Brand Association with innovation New Revenue Opportunities Improved SLA Product utilisation insights Customer experience / Insights Process insights / remote monitoring Efficiency / Cost Reduction Reduced downtime Improved service planning Increased machine utilisation Product improvement / reliability R&D insights (common faults, machine utilisation) Concept Development & POC with 5 friendly customers Channels Direct sales force Distributors Resellers Customer Segments Aerospace Automotive Medical Oil & Gas Medical Cost Structure Cloud costs depend on approach (e.g. predictive maintenance cost greater than remote monitoring due to compute load) Costs can be estimated once architecture and business volumetrics confirmed. How costs scale also confirmed in POC Revenue Stream Potential move to subscription-based as a service model Revenue model ensure revenue scales at least as fast as costs do and ensure we are incentivised only on factors under our control Strategyzer

32 Technical Architecture

33 Designing the technical architecture An Architectural Design Session is a one to multi-day engagement driven by technical sales that maps technical solutions to customer opportunities. Architectural Design Session Outcomes project scope solution requirements technical implementation approach risk assessment resources needed cost and timeline

34 What is an Architectural Design Session (ADS)? ADS Types Solution-focused Envisioning Proof of Value (PoV) scoping Architectural Review Key Deliverables Vision/Scope document Architecture Assessment document Proof of Value (PoV) project plan Target Audience Business sponsors to articulate needs Technology executive team to understand impact Lead architects, developers, DBAs, operations, etc.

35 Proof of value

36 Avoiding the Proof of Concept Trap Common Proof of Concept Blockers Lack of executive buy-in Lack of resources Prohibitive cost to scale Business value is unclear Difficult to justify short-term impact of pilot

37 Proof of Value Checklist Is this a qualified opportunity? Use BANT (Budget, Authority, Need, Timing) criteria. Identify customer stakeholders Complete the Business Case with the customer stakeholders Examples Machine X is currently serviced reactively (as it breaks) resulting in production halts whenever it goes offline Manual-based production scheduling and sequencing generating problems in quality (rework, scrap) that are difficult to trace Examples 7% increase in production line uptime 12% reduction in rework/scrap Examples Instrument Machine X with basic remote monitoring to trigger when certain thresholds are exceeded Add sensors to detect anomalies in production materials Get commitment ahead of time that if a PoV proves the desired business outcome, steps to progress towards full production.

38 Microsoft IoT solution support

39 Microsoft IoT Solution Support Business Model Workshop Reference Architecture Partner-ready BOM Architectural Design Session Tune-up Seller quota IoT Accelerate Case Studies retirement Build-with Go To Market Co-Sell Broad Partner Enablement One Commercial Partner Catalog Amplification

40 IoT Accelerate co-funding Target verticals Energy 1 Concept development Retail Factory/Industrial Security & Surveillance 2 Proof of Value (POV) Healthcare Buildings 3 Pilot/Proof of Business (POB)

41 GTM: Microsoft tools to help scale your solution Events Webinars Build Ready Go To Market Evidence Tune up

42 Tune-up examples Foundational document providing guidance for how to message the partner solution to customers. Helps sales teams quickly understand the partner solution. It includes: Elevator pitch Understanding the scenario Types of accounts to target Next steps Partner sales contacts Customer-ready slides with a strong solution story, intended to start the conversation with customers, help drive interest in the solution, highlight differentiators, and communicate business value. Customer-facing one-pager summarizing key points about the solution and communicating solution value great for ing to customers.

43 Co-selling with Microsoft

44 Why Co-sell? WIN WIN WIN Enterprise sellers get to introduce new innovation to their customers Partners get introduced to new customers in new geographies Microsoft s platform grows as a result

45 Co-Sell Requirements Area MSX Backgrounder Requirement Repeatable Solution OCP Catalog Co-Sell Ready Status Seller Incentives Eligible Engagement ID with Repeatable in Notes, Engagement in Completed Status, reviewed and approved by CSA team. Partner has Microsoft Partner Number (MPN) Partner Sales Contact for each solution and geo (one contact can cover multiple) Completed Company Profile (Company Logo, Company Description) Azure Platform Solution Information (Azure Business Model -Unbundled and/or Bundled, Avg 12-month deal ACR and Avg 12-month Partner Revenue) End Customer Segment (Enterprise, Corporate, SMB) Signed PR and Co-Sell Release Form* Solution Pitch Deck (10-slide limit)* BOM 50-word Solution Description* Reference Architecture* Customer 1-Pager* Systems Partner is onboarded to Partner Sales Connect and trained to register Deals Approval by the cross-org Solution Map committee * Tune Up can be used, but is not required CDS gets scorecard credit for co-sell Field gets credit and quota attainment for selling your solution

46 Thank you 2018 Microsoft Corporation. All rights reserved.