The document summarizes a webinar by ProfitBricks on planning for cloud profitability from the start. It provides an introduction to ProfitBricks, describing their mission of making cloud computing infrastructure accessible to existing IT teams. It then discusses factors to consider for a profitable cloud business model, including selecting the right customer base, cloud model, and recurring revenue model, as well as planning a steady transition from legacy to cloud services.

1. Planning for Cloud Profitability from Day One
Webinar with ProfitBricks, Inc. | Q1 2016

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Introduction ProfitBricks in 2015
Mission Painless Cloud Computing Infrastructure service which enables
existing IT teams, to deploy their applications and get all of the
benefits of the at an IT budget friendly price.
Details HQs in Berlin, Germany, San Antonio, TX and Boston, MA
135 Employees
Investors Achim Weiss –CEO
Andreas Gauger –CMO
United Internet (UTDI: Market Cap: $8 Billion)
Technology KVM Based – Cloud Computing IaaS service, built on InfiniBand
network interconnects with an efficient, performance optimized
platform with minute based metering and billing, deployed on
premium commodity hardware and housed in top-tier data centers.
Product IaaS – Compute, Networks, Storage with Data Center Design and
Management Software

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Other Cloud Providers
ProfitBricks:
Painless Cloud Infrastructure
Painless Cloud Infrastructure

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Cloud Computing’s Appeal
• F l e x i b i l i t y
• A g i l i t y
• S c a l a b i l i t y
• U b i q u i t y
• A d a p t a b i l i t y
• U p d a t a b i l i t y
• C o s t s

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Why Customers Want Cloud
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43% reduce IT capital expenses
40% reduce cost of IT operations
23% increase operational productivity
22% increase agility & competitiveness
21% improve performance
15% access new technologies

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• Software as a Service (SaaS)
• Platform as a Service (PaaS)
• Infrastructure as a Service (IaaS)
• Business Process as a Service (BPaaS)
• Managed Clouds
Enter the Clouds

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Cloud Computing Is a Growing Market Opportunity
SaaS
$133B
PaaS
$12B
IaaS
$5B
BPaaS
$10B
Source: Forrester Research

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Technologies with High Growth Potential
0% 10% 20% 30% 40% 50% 60%
Managed Print Services
Converged Infrastructure
Software-defined networking
Unified communications and collaboration
Servers/data center
PCs/notebooks/netbooks
Data networking (routing, switching)
Business software
Other (please specify)
Data storage
Virtualization
Application development
Mobile device management/BYOD
Internet of Things/machine-to-machine applications
Printing and imaging
Wireless networking
Mobile devices (smartphones, tablets, handhelds)
Business analytics / Big Data
Voice services/bandwidth/connectivity/Internet access
Backup, continuity and disaster recovery
Data security
Cloud infrastructure/services

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Cloud as a Replacement
Servers Backup Storage
Software Security Communications

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Average solution provider earns as much as 1/2
to 2/3 of their gross revenue from managed
services
Cloud as a Revenue Generator

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Cloud as a Systems Catalyst
Cloud Computing
Devices
Applications
Networks
Analytics
Storage/Backup
Output/Presentation
Transport
Security
Administration&Operations
Training&Support
ManagedServices
Consultation&Advisory
CapEx
OpEx
(CapEx) +
((OpEx)*(Time))
=
Total Accretive Value

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CapEx vs. OpEx
Revenue
Time
CapEx
OpEx
Compounding
Recurring
Revenue

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Operating Deficit
Cloud Challenge
Revenue/Cost
Time
1
Operating
Costs
Recurring
Revenue

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Cloud Challenge
Revenue/Cost
Time/Accounts
1
2
3
4
5
6
7
8
Operating
Costs
Recurring
Revenue
Cash Flow
Positive
• Cash flow turns
positive when
recurring revenue is
greater than
operating expense
• Cloud service
achieves ROI when
revenue covers
operating expenses
and initial investment
costs
• Profitability happens
when recurring
revenue generates
more than
investment and
operating expenses

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Compounding Cloud Revenue
Revenue&OperatingExpenses
Time
• Continuous addition
of new accounts or
account expansion
that leads to
increasing revenue
• Scaling resources
faster than services
consumption
• Maintaining a low
account attrition rate
• Commitment to sales
and marketing of
services and value
• Focus on customer
experience and
outcome-based
value

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Planning for Profitability
• Identify Customer
 You can operate globally, but the world is not your
customer
 Understand and profile customers to establish
sales scenarios and customer interactions
 Define who is not your customer and why

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Planning for Profitability
• Select a Cloud Model
Advise
Refer
Resell
Build
Support
Manage
Operate
Investment

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Planning for Profitability
• Select a Recurring Revenue Model
 On-demand
 Weekly
 Monthly
 Quarterly
 Annually
Revenue model will determine
sales needs and operating
parameters for planning
expenses and investments

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Planning for Profitability
• Pick a Cloud, but Not Any Cloud
 Keep start-up costs down by leveraging existing
expertise and resources
 Build cloud practices based on existing technology
and customer experience
 Create value by incorporating existing resources
with cloud capabilities

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Planning for Profitability
• Plan Transition – Don’t Do a Crash Change
Revenue&OperatingExpenses
Time
Cloud
Legacy Products
Inflection Point
• Do not stop selling
legacy products; use
legacy revenue streams
to pay for future
investments
• Plan a steady,
progressive transition
from legacy revenue to
cloud/services revenue
• Set milestones and goals
for expanding cloud
revenue and measuring
performance
• Accept that this process
takes time – up to 3
years

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Planning for Profitability
• Make a Plan, Set Goals, Draw a Road Map
 Create a vision that translates to value
 Set goals – revenue and development
 Know how you’re performing
 Decide when to expand capacity
 Maintain and exceed returns on investment
 Draft a plan that sets the operational parameters, roles and
responsibilities, and performance expectations
 Establish what you want to be when you grow up

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Planning for Profitability
• Commit to Sales, Not Just Technology
 You are first and foremost a sales organization
 Cloud services model is dependent on sales first,
technology second
 Create a sales culture with management,
governance, planning, expectations, and
accountability
 Demonstrate sales capabilities to vendors

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Planning for Profitability
• Commit to Marketing
 Cloud capabilities are worthless if no one knows
who you are, what you’re doing, or what you’re
capable of
 Communicate value to vendors and customers alike
 Use all available resources
 Commit to sustained marketing and
communications; no “one and done” efforts

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Wash, Rinse, Repeat

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QUESTIONS

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Getting Started
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Check out the new
ProfitBricks
Cloud Computing:
Channel Go-To-Market
Guide, produced
by The 2112 Group

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Larry Walsh
lmwalsh@the2112group.com
@lmwalsh2112
@the2112group
Website
www.the2112group.com
2112 Blog
www.the2112group.com/blog
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