tsw keynote preview - winning in the cloud economy
TRANSCRIPT
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Winning in the Cloud EconomyKeynote Preview
Thomas Lah, Executive Director, TSIA
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"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
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Why aren’t we already there?
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The XaaS profile drives decisions in three areas
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Introducing the Iron Triangle
Portfolio& Pricing
Customer Engagement ModelFinancial Keys
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Portfolio& Pricing
Clearly define your XaaS offer and how it should be priced
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Work through each phase of the customer engagement model for your XaaS offer
Customer Engagement Model
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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?
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www.tsia.com
Play #1: Register to the conference and join us in San Diego
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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
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Winning in the Cloud EconomyMay 2, 2016 | 2:00 PM
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Play #3: Attend the full keynote presentation
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Presented by Technology Services Industry Association
www.technologyservicesworld.com