Our industry is going through a dramatic change driven by the rapid adoption of cloud technologies. I’ve been helping grow technology companies for a very long time, and to my knowledge, the last time we saw a technology transition on this scale was more than 30 years ago, with the move from mainframes to client-server technology.
But back then it was mostly a technology transition. There were no real channels or distributors – they sprang up to meet the needs of smaller companies that were buying and installing PCs and packaged software for the first time. The massive partner ecosystem we have today emerged and evolved because of the new technology.
The cloud, however, is changing everything: ISVs are becoming service delivery companies, distributors have to find a way to make money from technologies that no longer require physical distribution of hardware and software, and resellers have to stop thinking of themselves as resellers or transaction partners and become IP companies. The margins from transactions and installations are shrinking fast, putting pressure on profits, and ultimately the value of the company itself when it comes time to sell.
Building Intellectual Property (IP) and recurring revenues can future-proof your business by helping you establish a business model that is relevant, profitable and sustainable. IP can come in the form of solutions, either full-blown applications or add-ons and extensions to existing platforms such as Office 365 or Dynamics CRM; it can be custom application development and application management services provisioned on an SLA-basis; or it can be other high-value managed services your company is uniquely able to provide. The common thread is provisioning solutions and services through recurring contracts, rather than up-front or via project-based pricing models.
So the question becomes, “What changes do we need to make now to build a successful, subscription-based IP business?”
For the past five years, we at The York Group International have worked with Microsoft partners of all sizes, from small, family-owned companies to some of the largest global partners, helping them work through the key business issues. And the issues are usually the same, regardless of the size of the company:
How will this impact my cash flow?
How should I price my solution when moving to subscriptions?
What are the key financial metrics we should be monitoring?
How do I identify the best growth opportunities without cannibalizing my current revenue stream?
Will I have to change my sales organization and compensation structure?
What will this do to my channel program?
How do I provide great customer support on a cost-effective basis?
The webinar series we have developed with Microsoft answers all of these questions and more. Created by industry veterans, these webinars provide pragmatic advice on how to transition your business, not disrupt it. Whether your transition is a step-by-step process over time or you prefer to take a more aggressive approach, the webinars will provide the information you need to make an informed decision with regards to timing and the investment you feel comfortable making.
Get started on your path now by viewing the Profitability IP webinar series.
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