The Intersection of Tech & Business:
Charting the Cloud’s Future
Nan Boden, PhD, MBAHead of Global Technologies Partners, Google Cloud
DECEMBER 6, 2016
SecurityCost Savings Digital Business
70% $305 Billion ⅔ CEOsReduction in capital
and operational costs
versus on prem
Cost of cyber attacks
to hospitals over
next 5 years
Focusing on digital IT & business
transformation
strategies for 2016
Cloud Computing Enables New Technologies &
New Business Models
The Evolution of Cloud Economies
Standard Industry
Models Are Changing
New Selling Motions; New
Consumption Models
New BuyersShift from Capex
to Opex
Proprietary + ConfidentialSource: “As Cloud Rolls In, Partners Should Transition from VAR to Value-Added Service Provider,”
CRN, quoting Tim Harmon, Forrester analyst (August 2015).
Revenue Mix Today:Partners Need to Transition from Value-Added Resellers
35%65%Products Services
Standard Industry Models Are Changing
Proprietary + ConfidentialSource: “As Cloud Rolls In, Partners Should Transition from VAR to Value-Added Service Provider,”
CRN, quoting Tim Harmon, Forrester analyst (August 2015).
Revenue Mix by 2020:To Value-Added Service Providers
60%40%Products Services
Standard Industry Models Are Changing
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The Shift from Capex to Opex
Source: "What Customers Want: The Imperative for a New Value-Added Services Approach in the
Cloud-Mobile Era," Tim Harmon, Forrester (January 2016).
Implementing
software-as-a-service(SaaS)
Packaged applications
implementation or upgrade
Business intelligence/data management:
planning/implementation
Infrastructure virtualization and automation
program to establish a private cloud
Overall digital strategy
Customer experience strategy
Implementing a business or technology
change management program
Multichannel strategy
Traditional IT servicesBusiness services
Customers employ channel partners for business
services more than for traditional IT services“In which of the following areas has your business unit/IT department used or do you expect to use technology firms?”
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New Selling Motions; New Consumption Models
Traditional License
& Maintenance
Business Model
Cloud Subscription &
Consumption Usage
Model
Customers Are Demanding:
● Faster Time-to-Value
● Minimal Upfront
Commitment
● Flexibility & Scalability
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New Buyers
Source: "What Customers Want: The Imperative for a New Value-Added Services Approach in the
Cloud-Mobile Era," Tim Harmon, Forrester (January 2016).
55% 56% 58%
Line of Business (LOB) customers increasingly involved
in services purchase decisions“Which of the following categories of technology decision-making are you significantly involved in?”
SoftwareDigital
Agencies
Third-party
IT services
Base: 1,205 global services
business decision-makers
The Opportunity: TAM Expected to ~Double by 2018
Source: Gartner WW Estimates of Total Addressable Market for Enterprise Cloud Software
$0B
$20B
$30B
$40B
$ T
ota
l A
ddre
ssable
Mark
et
2016 2018
$60B
Cloud Current and Expected Total Addressable Market- Global
Best CaseCurrent Expected Case
$10B
$15B$35B
$57B
$70B
$70B
$50B+28%
/yr
+41%
/yr
Increase Revenue with Multiple Business Models
Source: IDC 2016
Gross margin by Cloud business model, IDC
Partner Profit Scenarios:
Based on Business ModelsPackaged IP
Technology solution to
solve customer need
Managed
ServicesCustomer lifetime
value driven
Professional
ServicesProject based
Reseller - firstSales and
marketing driven
Innovation is Key to Your Success & Driving Value-Added Services
More opportunities to redefine innovation
+ +
=
Value-Added Services Drive Opportunity for the Channel
with IoT
IoT will grow to $1.7 trillionin 2020, up from $655.8 billion in 2014.
– IDC
Source: “Supercharged: How Solution Providers Are Moving The Needle In Today’s Innovative IoT
Market,” CRN (October 2016) (August 2015).
““
Principles of Partnering for Google Cloud
Open Innovation Fairness Transparency Shared Success
leads us to open platforms and ‘build + partner’
Non strategic
project
Strategic / high
value project
“Cloud native”
customer
Traditional IT
environment customer
Entry-
level
Packaged
IP
Cloud business models are defined at the intersection of
customer need and partner capabilities
Managed Services
Professional Services
DifferentiatedComplex/ custom
Reseller-first
Example: Backup Use-Cases
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Partners Can Help Assemble Solutions
What We See
Customers - now more than ever - need the
combination of innovation and services
partners to deliver the solutions that help their
businesses thrive.
The rapid move to Cloud is disrupting existing
business models, but….
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Thank You!