ISVs & the Commercial Transition to the Cloud
- 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 cloud-related 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? Business Goals: Product Management Finance • • • • • 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 Potential Benefits • • • • • • • • • • Operational overhead Development cost Services impact License revenue lag Customer lock-in 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 Increased costs Short term = 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
- 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 Software Potential • Software Potential 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. Software Potential How does it work?
- 33. What does Software Potential give the ISV? Easy Management of the Complete Software Licensing Lifecycle
- 34. What does Software Potential give the ISV? SKU Agility: Product Flexibility & Reduced Time to Market Fixed Product SKU Price A Price License Terms Dynamic SKU Creation Functionality Business Terms New SKU generation time = Change Code + Rebuild + Re-Test + Re-deploy License Terms A SKU 1 Feature Feature A B Business Terms A Feature C SKU 2 License Feature A Terms B Feature Business Terms B D New SKU generation time = Issue license in minutes Price B
- 35. Summary • Learn more about InishTech or get a FREE 30 day evaluation of Software Potential at http://www.inishtech.com • Contact us at sales@inishtech.com