Here at Microsoft, we talk a lot about the cloud, how it empowers organizations and enables businesses to get smarter and safer in their day to day tasks. From Azure to Office 365, the cloud is where technology is at in the present day. But not every business is there with us. As several companies struggle to keep up with the rapid pace of changing technology, many of our partners are trying to find their way to the cloud at a pace that makes sense for their business.
This can mean holding on to on-premise solutions or creating a hybrid system that meets their immediate business needs while they plan for the future. But it’s clear that the future of technology is in the Cloud, and there are a few things partners can do to get Cloud Ready.
Cloud Readiness in Action
For those businesses which are finding themselves needing to catch up with their cloud migration, there is a lot of information and resources out there to wade through and figure out how to get from point A to point B. Too much information isn’t always a good thing, so that’s why James Farhat and his team at ACTS, Inc. created the Cloud Readiness Workshop. On the latest Microsoft Partner Network podcast, we heard about his 100 Days to Cloud program and how he is helping partners learn how to reposition themselves within the market.
“It’s really important for organizations to understand that our audience isn’t just the IT department. 100 Days to Cloud is really about creating your go to market offering with the cloud because that’s a really important question. It’s to help you understand where you fit as a partner, how can you build your intellectual property and a reoccurring revenue model in this market.”
– James Farhat, CEO of ACTS, Inc.
The Challenges of Digital Transformation
James has seen that partners struggle most with a few specific elements of that cloud transformation. He says organizations have trouble understanding what resources they have available to them. Their need to think more from a business outcome perspective rather than being so product or feature focused is a challenge. Lastly, partners need to continue supporting their existing customer base while they are making necessary changes to move into the cloud.
To address these challenges, James recommends looking to the Microsoft Partner Network portal as a source of support and research. He mentioned the 100 Days to Cloud workshop as an essential step in figuring out how companies can better align themselves with the shifting market.
Finding the Opportunity in Change
“Traditionally partners have developed predictable revenue models around managed services. Today, there is a more strategic play to move intellectual property and create go to market strategies. For example, if an organization has a supply chain element, they could find a solution that uses Azure or Office 365 and make that an offering, either as an IP product or a managed service, that can be a source of predictable revenue that they can build a floor to manage around.”
– James Farhat, CEO of ACTS, Inc.
While it can be intimidating to strike out in a different direction, it’s clear to see that the businesses who are not able to keep up with the rapid pace of innovation are the ones who will be left behind by it. Finding the right market opportunity for your business depends greatly on who you are as a company, what unique solutions you can provide your customers and the way in which you solve customer problems. The changes to your business model and even how you go to market may require time and strategic planning, but they are well worth the effort and will help position your company for long-term success.
Tune in for More Insight
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Rachel Braunstein: Welcome to the Microsoft Partner Network Podcast. Every week, we bring in industry leaders and Microsoft partners to talk about the big ideas shaping business and technology today.
In today’s episode, we’re sitting down with James Farhat, CEO of Applications Consulting Training or ACT Solutions, to talk about what it takes for partners to become cloud ready. Welcome to the studio today, James, thanks for being here.
James Farhat: Thanks, Rachel.
Braunstein: So, you’ve been working with Microsoft since the 90’s. You really understand this. Tell me a little bit about yourself and what ACT Solutions does.
Farhat: Thanks, Rachel. I’ve been around the Microsoft ecosystem system since the 90’s and been a partner since the 90’s, and basically, I serve as the CEO but also the business technology architect for the organization. And ACTS basically helps deliver business outcomes for their clients and we leverage the Microsoft ecosystem to do so. Our organization has a managed services piece, a professional service organization, and also we’re an ISV.
Braunstein: And what have you seen change so much since the 90’s to today with being cloud ready and what does that even mean?
Farhat: So, I remember in the 90’s, there was this big push for Windows distributed services and Microsoft Exchange, and SQL Server, and Microsoft moved towards enterprises with business applications. And we’re sort of going through the same thing today but with a lot richer set of services and not as much product and feature focus from IT department but to address what business process owners need and how you can drive business outcomes. So, utilizing the cloud and getting rid of some of the tactical work that IT organizations do and moving IT to be more strategic to align themselves with the business is a very similar transition but even a greater impact. And I think in looking at Microsoft Azure and looking at Dynamics, and looking at Office 365, there’s a different approach that we take depending on if you’re an IT pro, if you’re a developer, or if you’re a consultant within a partner organization. There’s a great impact that you can make happen and not have to do all that tactical work and deliver business outcomes in a much faster manner.
Braunstein: Right, right. So, one thing you’ve been working with us on and with a lot of partners is this cloud transformation and can you talk about what it means? What happens if you are actually trying to transform your business, what is that journey like for somebody?
Farhat: That’s a great question. It’s real important for organizations to understand that our audience isn’t necessarily just the IT department and this 100 days to cloud is really creating what Azure go to market offering going to be with the cloud? And that’s a real important question. And one of the things that I think’s a newer element to this is what business situational fluency can you provide to help drive a business outcome? Because we have all these amazing rich services and the capability of solving some business problems for the business process centers. So, understanding where you fit as a partner. So, if you’re, for example, an IT pro, how can you leverage some of the cloud services to help support the applications that an organization has with not necessarily having to worry about putting up all these services and dealing with cables and things like that? As where if you’re a developer, there’s a large rich of services that you can provide to help drive some advanced applications around analytics and around sophisticated applications that don’t require all of that infrastructure. So, this whole journey that we do in going out and doing presentations and providing these workbooks and all of these resources is to help partners find out where they fit and how they can build their intellectual property and build a predictable revenue model that can be reoccurring.
Braunstein: Can you talk a little bit more about that predictable revenue model?
Farhat: Yeah, traditionally, partners have always done project based services or have had predictable revenue models around managed services. And today, there is a more strategic play that they can move some of the intellectual property and create go to market strategies. So, for example, if an organization has a supply chain element to it, they can find a solution that they might be able to drive using services in Azure, in using Office 365 and then make that an offering that can either be an ISV product or a managed service that can be predictable revenue that they know that they’re going to get X amount of money per month or per year to build a floor so that they can manage around what that dollar amount is versus what’s traditionally happened in the past is delivering a solution they say, okay, it’s X amount of money, and then I’ve got to go find my next project. And so, what’s nice about this is now they have all of this infrastructure taken care of and what the partner organization needs to do is become more strategic and find ways to create a larger value stream for the organization. It’s much easier to manage a business if you have a predictable revenue model, which is the same journey that’s Microsoft’s taken. Microsoft has always sold licensing and with the cloud, they’ve moved to more of a recurring revenue model.
Braunstein: And we’re still going through that. That’s kind of funny that you bring that up. We’re definitely still experiencing that transformation. Where do you think the most difficulty comes or when you talk to partners, where are they struggling the most in that cloud transformation?
Farhat: One is to sort of understand what resources they have within the organization and what’s the shortest path to get there. Number two is starting to think differently and not product and feature focused and looking at things from a business outcome perspective and how they can drive situational fluency within their business for what that particular voice of the customer’s saying. And number three is to continue to be able to support their existing revenue base while they’re making that cloud transformation and still doing some research and development in breaking out into whatever their offering might be.
Braunstein: How do you do that? I mean how do you kind of do some research or hybrid models? I mean how do you sustain while develop into the future and innovate?
Farhat: You know, interestingly enough, we started our journey around five years ago and there wasn’t a lot of resources for us. So, it was a lot of trial and error. But as time has gone on, a lot of people have recorded success and shown different areas. We are using as a reference the Microsoft Partner Network resources and there’s a lot of resources out there that can help with that journey. And there is a 100-day workbook that can help you with that journey that is tried and true because organizations have already gone through it. And there’s plenty of resources on Yammer and other areas. For us, it was a lot of trial and error, but even when we started to get part of the cloud ready program and we actually joined it about a year ago and it created a huge boon within our organization to bring a more top of mind nature. So, a lot of us already understood what it was to be cloud ready, but we needed more resources to get our organization to think in that direction. And we look at using incentives for our organization to help people push and think that way. But it’s important to figure out what your target’s going to be, like who am I going to satisfy? What vertical? What type of organization, what’s the size of that organization? What’s my target deal size? And then from whatever the customer needs and whatever that value proposition is to leverage the tools that are part of the Microsoft Partner Network or that are online to help you come up with your go to market strategy.
Braunstein: You’re working with some big customers yourself. How do you go into those conversations and talk with the customer and start to think about building out solutions?
Farhat: In our organization, we make sure to not only hire people that are technical but also that have business experience. That is far more important to us is that they understand business context and they understand situational fluency within a process. And many, many years ago, we created what’s called our business outcome model. And it’s very simple and sometimes we use the grocery store as an example, like somebody sending somebody to the grocery store, they write out a list and then somebody actually goes and picks that up and brings it back. Well, in every business process, there are roles and activities; just like in human nature, we have roles and activities. And what’s important is that you have folks that know how to break those processes down into those roles and activities and then find ways to leverage cloud components to help reduce the content friction so that you can bring a lot more value. So, when we pick people within our organization and we interview people because people are what’s going to take you, we want to make sure they have those concepts and they’re able to understand those concepts and do that break down.
Braunstein: How would you recommend businesses address problem solving with cloud technology?
Farhat: A lot of ways that we look at it is from that business outcome model. When we look at solving that business problem and using cloud technologies and we kind of call that ideation—what is the art of the possible? We take that process and we say, okay, there are multiple participants in that process and each of them have a role in that process. And in that role, they have different activities that they might do. And based on those roles and activities, for example, let’s say somebody fills out a form. We might use PowerApps because in PowerApps, we can actually create forms. And maybe after that data is entered somewhere and it drops into let’s say a SharePoint list, then a workflow needs to happen to then pick up that data and then do something. We would then use logic apps or maybe Flow to pick that data up and then move the process.
So, when we take that process and we break it down in roles and activities, we find ways from an architectural perspective. And this is where the business and technology kind of come together and find ways to use components, adjacent components within Azure or Office 365 or Dynamics to solve that problem. So, IT professionals are becoming more application architects and working alongside developers to maybe resolve some of the last mile. And so, that’s sort of how we ideate and that’s how we solve some of those business problems.
Braunstein: Yeah. Where do you think it’s all going? I mean what are you excited about and planning with your people now about where to take things in the next five or 10 years?
Farhat: So, over the last 36 months, we’ve been building a data science team and we’re doing a lot with artificial intelligence and machine learning and using cognitive services and I think that utilizing and leveraging the cloud and leveraging some of the components that we have in the Microsoft ecosystem, we can solve some very impactful problems. I’ll give you an example.
One of the examples is we had a customer that wanted to be able to analyze data that’s out there that’s unstructured on the net and see what the voice of their customer’s saying. And one of the things that we did is we used cognitive services and Azure ML and we created a demo. And this is how we got this opportunity where we took a bunch of data and car discussion forums where people talk about different cars and they complain or they talk about a fire issue or an airbag issue. And we used the Microsoft cloud to organize that data and then provide it in Power BI instead of an individual or individuals having to go look through all that data, sift it, and organize it in a database, and then provide a visualization that gives people the voice. So, we showed that to a large organization. They looked at it and said, oh wow, can you do this with data that’s on Facebook or another unstructured so that we can see what our customers are saying and organize that data? And so, we used the Microsoft cloud to do that, which reduces a lot of headcount and brings strategic data back to the customer. And that’s become extremely valuable and we do that across many different examples. Some of them deal with cross selling and upselling, what a current customer has from a product and customer mix or revenue or sale forecasting. And reducing that amount of tactical work that an organization has to do manually and allowing the cloud to do it automatically brings a lot more value to the organization that’s our customer.
Braunstein: I can’t help but think a little bit that machines are going to take over in some sense. You talked about so much value of people; how do you continue to stay relevant then with the teams that you have and the talent as machines can do so much incredible work?
Farhat: Well, I think as time has gone on, that’s always been a question that people ask. And if you think about it, you know, prior to the 1910’s, we were in the agricultural, that was the mainstay of the economy. And then when all of a sudden when we had machines for the agricultural age and we moved to the industrial age, people were worried about jobs. And then we moved to the information age. What has happened is that humans have become more strategic in nature and they continue to move up the value chain. And so, I think where I see the workforce going and I see my organization and we see this today is that our people become more and more strategic and they’re doing less tactical work. And I see that just simply with somebody that’s going to set up a server. You know, if you think about it, when someone set up a server, they would get a physical server. Before we even had virtualization, they would install the server, they would plug it in, they did all of this manual work. And today, with the cloud, it’s a couple clicks and a server’s ready to go so that now we can use that time for us to deal with more impactful problems and come up with more impactful solutions and move that tactical work to machines.
Braunstein: So, if you had to give our partners some recommendations on if they’re sitting here right now and they’re really focused on project services let’s say or maybe they’re just reselling, what would you recommend for them to do?
Farhat: I would find out where their current revenue is today, like what are you doing and who are your, the shortest path? What type of customers do you have? Because that’s your shortest path to get to cloud ready. You have to use your existing customer base then to try to create a whole new business within your business. Okay? And then find the areas of the cloud that kind of match that. The other thing is is used LinkedIn in press releases and industry trade mags as sources to understand where their pain points are so that you can build situational fluency for what the voice of the customer is. And then on the other side, and that deals with the business side, on the other side is really start to spend your time reading all of the resources that Microsoft provides. It’s not short of resources.
Braunstein: Too many, sometimes.
Farhat: You can read so much about the Microsoft ecosystem. And understanding how to match those is where the value is. So, when you can understand what the voice of the customer is, what that business outcome is, how to break that role and activity, and then find ways to componentize the Microsoft cloud ecosystem to drive a better value proposition for your client, that’s really the formula. And as you do that, you want to find where you can provide a turnkey method where you deal with it. You take the ownership. And that’s where a customer’s willing to pay for monthly recurring costs for you to have revenue. And that could be with a software product you build. That could be with a managed service, okay? That could be a culmination of both.
Braunstein: Right. Because you said you do a mix of everything really, kind of an ISV, managed services, you’re doing it all, so you can meet your customer needs.
Farhat: Yes. And the PS part of the organization and the MS actually help us build products. And we’ve built four products that own the intellectual property, we drive revenue with them, and they’re annual recurring revenue. That basically has helped us move in that direction. So, as we build things for clients, we ask ourselves internally, is this something other people will want and can we productize it or find a way to productize it. And that’s, hence, how we’ve become an ISV.
Braunstein: Got it. And so, you talked about just some resources. You said the cloud ready, which will provide this in the description. Are there any other key resources that really helped your organization?
Farhat: MPN is a great resource. There’s a lot of great training on the MPN site. In addition, we use Channel 9. We use the Microsoft Virtual Academy. And we basically also on our team use from a technical perspective, our technical people use TechNet or MSDN. And from a business perspective, we use LinkedIn and a lot of trade magazines and things like that. There’s a lot of stories out there and it’s interesting. I require our folks to spend time looking at Azure case studies. And there’s a lot of great case studies. There’s also Office 365 case studies. There are showcases out there. And looking at real world examples of things that have been impactful and delivered for customers where you can look at the reference architecture, you can watch the video story or read the story. It seems like Microsoft’s done a good job providing for auditory learners, for visual learners, and kinesthetic learners that messaging so that people can understand how this happens.
Braunstein: Well, this is awesome information, James. So helpful for any person trying to make their cloud transformation. Thank you for being here. We’ll provide these resources in the show description and, of course, on our Microsoft Partner Network blog. Thank you again.
Farhat: Thank you so much, Rachel.
Braunstein: Thanks for listening today and check out the podcast description for show notes. Be sure to subscribe and keep in touch with us on LinkedIn, Facebook, and Twitter at MS Partner.