Your competitors, partners, and customers are transforming not only how they operate and go to market, but also what they sell. With intelligent digital technologies and the cloud, your products and services—coupled with your deep knowledge—let you deliver amazing new value by turning data into a strategic asset that opens growth opportunities and new markets.

IDC predicts that by 2020, 60 percent of all enterprises will have fully developed an organization-wide digital platform strategy. To capitalize, partners are getting their own houses in order by transforming the ways they engage with customers, empower employees and optimize operations with digital technologies.

The final leg of the digital transformation journey—described in Part 5 of the Microsoft Digital Transformation Series: Transforming Products—is when your cloud and managed services play a key role in supporting your customer’s digital initiatives.

According to IDC’s global partner survey, the majority of partner revenue is now generated from services rather than software and hardware, creating a huge opportunity to continually deliver new value as customers evolve their cloud environments. To capitalize on this opportunity, partners are specializing by vertical industries and horizontal business functions to create new value and differentiate their offerings.

 

IP, your key differentiator

Along with your specialization, your ability to identify your unique intellectual property (IP) can set your practice apart and help generate larger margins. IDC’s survey reveals that partners who have digitally transformed their businesses expect 27 percent growth in their IP-related revenue versus partners who have not begun their transformation.

That speaks directly to the rate of investment these partners are making in IP development. The same survey shows that digitally mature partners (61 percent of the survey sample) are investing 10 percent or more of their revenue in IP, while only 16 percent of less-mature partners invest at the that level.

You’ll need to factor in your skills and resources when deciding whether to develop your own IP. You could partner with a company that has already developed the services. The most involved option is to explore purchasing a company with the expertise you need.

Your IP can take several forms. It doesn’t have to be based on proprietary code. It could be a project-based consulting process, or ongoing support solution you’ve perfected and packaged to deliver in a repeatable fashion. It could be DevOps methodologies you’ve iterated based on vertical expertise and provided as a repeatable value-added service.

For instance, Microsoft partner 10th Magnitude developed IP to support its customers’ digital transformation with a suite of assessment and planning tools called TenView. It was adapted from DevOps philosophies which helped customers better understand migration plans and roadmaps, which 10th Magnitude subsequently iterated into a packaged solution.

It also provides a repeatable service to help customers understand the economic value of upgrading to modernized applications and cloud services. 10th Magnitude does not charge separately for TenView. It’s embedded in the price of its strategy and planning engagements.

“We automate as much as we can with repeatable processes out of an engagement,” said Alex Brown, CEO of 10th Magnitude. “One of our objectives is to get to as automated and rapid a process as possible.”

As part of supporting a digital transformation initiative, partners have also developed IP to manage and optimize their customers’ cloud consumption. Without a way to control their cloud spend, customers are often reticent to take the next steps in their digital transformation journeys, which prevents them from realizing additional value. But providing a self-service way to monitor their consumption gives customers more confidence to expand their transformation.

 

Transformation accelerators

In addition to investing in your own IP, you can help your customers transform faster with a focus on the activities that increase consumption and reliance on your services. These successful accelerators include:

  • Delivering software as a service
  • Automating of repeatable processes or methodologies
  • Offering self-service metrics reporting to demonstrate value and manage cloud consumption

If your expertise lies primarily in software development, packaged software as a service (SaaS) is delivering high margins for partners and great value for their customers. Microsoft partner Awingu developed a unified workplace solution that lets users securely access files and applications via a web browser.

By doing so, it accelerates the move to the cloud and exposes more benefits around digital transformation, because the rules and guidelines are already in place for future tasks they may wish to perform in the cloud.

In the digital world, your offerings become the embodiment of customer value. Your opportunity to differentiate and continually extract value has never been greater. Take advantage of the insights and examples throughout the Microsoft Digital Transformation e-book series and continue to evolve your solutions with intelligent cloud technologies.