This deck, presented at the Microsoft Australian Partner Conference 2011, discusses considerations for partners building strategies for public cloud

1. Moving to the Windows Azure Cloud Strategic Options For Getting to the Cloud Nigel Watson, Platform Strategy Advisor Microsoft Australia

2. Introductions and Agenda Who We Are DPE Platform Strategy Advisors Nigel Watson Platform Strategy Advisor Microsoft Graham Elliott Platform Strategy Advisor Azure ISV, Microsoft Main Talking Points Moving to The Cloud Why? Evolution to Cloud Computing Market Opportunity and Impacts What? Windows Azure Public Cloud Trends Partner Opportunities How? Cloud Business Strategy Readiness Programs and Resources

3. Never waste the opportunities created by a good crisis - Machiavelli The essence of strategy is choosing what not to do - Michael Porter Strategy http://www.flickr.com/photos/raster/3072255833/sizes/l/in/photostream/

4. Impact to Partner Types Sell Generate recurring revenue streams Create value-added solutions Up-sell and cross-sell Attach services Build New applications and solutions Rapid development and deployment Extend and customize cloud offerings Repeatable IP sales ISVs Opportunities RESELLERS SIs HOSTING PARTNERS Service Broaden the marketplace Increase wallet share: Host cloud applications Extend product offerings: Provide add-on services Host Extend and customize cloud offerings Migrate to and integrate solutions in the cloud Managed services, support, and training Cloud Service Vendors (CSV) - any entity that uses cloud services to create commercially available applications for monetary benefit

6. Application marketplace to grow sales

8. Cut development time

10. Reduce costs

11. Rely on world class security, continuity, privacySell Develop Deploy & Manage Grow your business Innovate Quickly Scale reliably & cost effectively

12. Introducing… Dominic O’Hanlon MYOB

13. Partner Models for Azure Customer buys Windows Azure Consumption from Microsoft Partner Customer Partner buys Windows Azure Consumption from Microsoft Partner Customer

15. Superior Gross Margins

16. Ongoing Managed Services revenue

17. Ongoing ‘long-tail’ revenue

18. Further IP enhancements

19. Source Code

20. Frameworks

21. Objects, Templates

22. Applications

23. Productised Services

24. Video, Data, Images

25. Methodologies

26. … otherDriving IP is…. Identify and Inventory Package and Price Design IP wins into business wins if possible Tell the story

27. Monetisation Free Usage Per Unit Payment Type Freemium Per Meter Monthly Subscription Free basic level Premium upgrades Customers pay a monthly amount Pricing per unit of measure (storage, downloads, bandwidth) Ad-Based Revenue Revenue Share Per Transaction Discrete transaction units that can be easily measured and tracked Revenue from advertisers not users A share of revenue generated via the service provided License Fee Related Services Charged Per User/Device Free app use with charge on related services / or virtual goods A large upfront payment for the license Customers pay for each user/device using the product or service

28. Financial considerations CF CMRR Committed Monthly Recurring Revenue Cash Flow CR C-Pipe CMRR Pipeline Churn Rate LTV CAC Customer Acquisition Cost Customer Lifetime Value

30. Better understanding of customer use

31. Responsibility for customer data

33. Free customer trials, quick customer ramp-up

35. Cloud applications resolve business capability gaps

36. Ops complexity moves to cloud – reduces IT footprint

37. Be ready for a risk discussionSell to the Business

38. Campbell Johnston SMS Consulting Adrian Viti SMS Consulting Introducing…

40. Customer expectations are different

41. Deployment and Delivery are crucial parts of your strategyDistribution SIs and ISVs are increasingly partnering for reach and sales Customers still need support, training, integration and customization Partnering Finished applications can still be building blocks for other offerings Make sure you leave that door open Can you monetize the data? Additional Revenue From APIs

42. Going to Market New channel roles emerge Find networks effects if you can Brokers, Aggregators, and Marketplaces Going To Market BUILD ANYTHING SELL ANYWHERE Call to Action ! Go to www.windowsazure.com/marketplace to start selling your apps

43. Operations 24/7 Business SLA monitoring and management Tooling Partnerships Billing Helpdesk Trouble Ticketing and Issue Resolution Operations

44. Choosing your strategy Optimize for cash flow to smooth the transition from upfront payment over time Understand what revenue you lose, and what do you gain? Remember: You may impact your customers business model You may impact your partners business model Be prepared to be flexible

45. Readiness http://www.flickr.com/photos/lydiashiningbrightly/3016016887/sizes/l/in/photostream/

46. Leverage what you know… The cloud technology portfolio mostly comprises the usual suspects… Top Skill Sets to Learn Networking and Infrastructure Business Skills Architecting for the Cloud Integration http://www.flickr.com/photos/lydiashiningbrightly/3016016887/sizes/l/in/photostream/

47. Training Paths for Cloud Up-Skilling Step 1 2 3 Apply Core Skills for Hybrid Environmnts Build Core On-Premise Skills Add New Skills Design, configuring, and maintenance specialized in Exchange, Lync, or SharePoint Analysis and planning for O365 co-existence, SLAs, security, and networking Design, configuring, and maintenance across Exchange, Lync, and SharePoint From Administrator to Cloud Services Manager Use Visual Studio and .NET to build Web and SOA applications Architecting on-premise applications to work together Develop Azure platform services From Developer to Cloud Developer From Infrastructure Specialist to Data Center Operations Manager Design and configure server networking, security, and virtualization Monitoring, provisioning, and managing the data center with System Center 2012 Service Management and automation, design deployment, and operational excellence (MOF/ITIL) Designing, installing, and administering SQL databases Co-existence of SQL Server and SQL Azure Architecting database solutions to mine data and work with other cloud services From Database Developer to Data Steward

48. Cloud Programs and Resources http://www.flickr.com/photos/corporatemonkey/51883538/sizes/o/in/photostream/

51. Top rated training

54. Fully automated self service: no fee

55. Can be used to fulfill Silver & Gold competency requirements in MPNCall to Action ! Go to www.microsoftplatformready.com to get signed up

57. CRM Online – up to 250 licenses

58. Intune – 25 PCs

59. Windows Azure:

60. Windows Azure

61. SQL Azure

62. App Fabric

64. CSA: requires (1) deal 12 months prior to enrollmentor Pre-sales and Technical Support: Partner Forums for Cloud, BPOS Practice Accelerator Annual FeeNone Annual FeeNone for this program Online Sales Tools: Demo Showcase, Profitability Modeler (Partner Order on Behalf TBD) Design & Develop Marketplace Participation: Pinpoint “I build intellectual property delivered through the cloud” Training Platform with Targeted Cloud Training Marketing Resources Call to Action ! Platform Ready Signup & Register application Go to www.microsofcloudpartner.com to get signed up

66. CRM Online – up to 250 licenses

67. Intune – 25 devices

68. Windows Azure Platform

69. MSDN Premium Subscriptions (Silver Competency)

70. Cloud Essentials Pack Benefits (H1 Calendar Year 2011)“I sell and deploy online services” Partner Selects Applicable Business Track and begins Qualification Process. Can qualify for one or both tracks. Three Cloud Customer references MOSPA/CSA Sales Agreement Three Deals sold and 150 seats minimum Sales Commitment (8 deals and 500 seat minimum) Pre-sales and Technical Support: 20 Additional Hours of Partner Directed Support, Partner Forums for Cloud, BPOS Practice Accelerator Training & Assessment (Technical; 300 level) Fee$0 for competency partners; otherwise $3,618 Earned Silver Competency & Related MPN Competency Benefits Cloud Accelerate Badge Design & Develop Online Sales Tools: Demo Showcase, Profitability Modeler (Partner Order on Behalf TBD) “I build intellectual property delivered through the cloud” Marketplace Prioritization: Pinpoint Sales Commitment ($10K Azure Revenue) Azure Solution Certification (Platform Ready) Local Subsidiary Engagement NDA Cloud Roadmap Fee$0 for competency partners ($1,850 otherwise) Three Cloud Customer references Call to Action ! Marketing Resources Training Platform: Targeted Cloud Training 23 Go to www.microsofcloudpartner.com to get signed up

71. SI: Windows Azure Circle Get: Business Investment Funding (BIF) Accelerating Customer Acquisition Generous 25% Rebates Access to Premium Training and Resources Limited to 250 Pre-Qualified Partners Get: 25% Solution Incentives (SIP) Complete your PSP Get at least one new customer Get: Activation, Training, Discovery Pack Get: Deployment Planning Services Voucher (DPS) Achieve >$1K per Quarter Ready 1 Sales 2 Dev. 1 Archit. Call to Action ! Talk to your partner account manager about Azure Circle

72. Business Tools A New Price Predictor Understand your costs structure before you commit to buy Forecast your monthly P&L A New TCO and ROI Calculator A detailed report for an accurate TCO and a 1 to 3 year ROI Customizable per each individual business scenario Go to www.windowsazure.com/offers to learn more about this new capability Call to Action !

73. Business Economics Package Overview Presentation and SaaS Pricing Examples Pricing Tools and Offer Guidance Webinars (on-demand, localized in 7 languages) Exclusive Analyst Reports Case Studies and Whitepapers Enabling Partner Brochures Go to http://tinyurl.com/azbizeco to access this package Call to Action !

74. Working with Microsoft If you are working with Azure, or want to know more…. Nigel Watson Platform Strategy Advisor Microsoft Graham Elliott Platform Strategy Advisor Azure ISV, Microsoft nigelwat@microsoft.com grahame@microsoft.com

75. Q&A Q&A

76. Session Code: AP023