Cloud ISV Profitability

David LeBlanc

Channelnext Marketing Manager

davleb@microsoft.com

Which path are you on?

Transitioning from

On-Prem to Cloud ISV

Transitioning from

Project & Services to IP

Born in the Cloud ISV

with plans to grow

Better margins

Firms focused on selling SLA-based services have a GP up to 12% higher than those that don’t

Key steps for a

successful app

monetization

strategy

User Engagement

Monetization

User Acquisition

Analysis

• Social media, blog, email

• App review sites

• Paid app install ads

• User referrals

Measuring attribution is critical!

www.microsoft.com/store/apps/9NBLGGGZ5QDR?cid=twitter

string campaignId = await CurrentApp.GetCampaignIdAsync();

F3F0U-HVFVU-0J9FV-3U0HF-V4U08

55%31%

14%

In-app purchases

Advertising

Paid apps

More features to help you convert your user base to paid

Make more money from your existing ad inventory

Developer Revenue by Source

“

Nov Dec Jan Feb Mar

FY14 FY15

Product

development

User documentation

Product development—opportunistic

Onboarding process

Product development—strategic

Development methodology

Upgrade cycles

R&D initiatives

Service delivery

Redundancy, failovers

Third-party app ecosystem

Marketing

To Improve Marketing Effectiveness & Efficiency

Sales

Steps in Sales Process How is this Done? Steps in Sales Process How is this Done?

Cloud Sales Process: Customer Led, Support Driven

Can it be the same salesperson?

Selling cloud and on-premises

Hunters and farmers

Assumptions• 5-year model

• $10k bookings in month 1

• $2k monthly growth

5-year impact• At 2.5% churn, $(64,000)

• At 5% churn, $(90,000)

• 5-year model

• $10k bookings in month 1

• $2k monthly growth

• Expansion revenue of 2.5% to current customer base

Customer support—opportunistic

FAQ

Knowledgebase

Live chat

Customer support—strategic

% of overall revenue from recurring sources

Churn Rate %

aka.ms/profitabilitychallenge aka.ms/pwedam aka.ms/profitabilityscenarios aka.ms/profitblogaka.ms/profittool

http://aka.ms/profitabilitychallengehttp://aka.ms/pwedamhttp://aka.ms/profitabilityscenarioshttp://smartpartnermarketing.microsoft.com/http://aka.ms/profittool