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Applications to Apps: The Shifting Software MarketEvilázaro AlvesChief Business Development OfficerBR Soluções IntegradasMicrosoft Regional DirectorMicrosoft Azure [email protected] | @evilazaro
History of making big bets
I believeover the next decade… intelligence will become ambient... made possible by an ever-growing network of connected devices, incredible computing capacity from the cloud, insights from big data, and intelligence from machine learning.
Satya NadellaCEO, Microsoft
CONSUMERS USE MOBILE PHONES TO GET INFORMATION AT LEAST 3-4 DAYS PER WEEK
/ 23
1.4GLOBAL CONSUMERS
BIL
LIO
N
WITH TABLETS AND SMARTPHONES BY 2016
AB
OU
T
OF WORKERS DO SOME WORK OUTSIDE OF THE OFFICE
80%NE
AR
LY
OF TODAY’S GLOBAL WORKFORCE ARE ANYTIME, ANYWHERE WORKERS WITH 3+ DEVICES, WORK FROM MULTIPLE LOCATIONS AND USE MANY APPS
29%BELIEVE I.T. IS INEFFECTIVE AT PROVIDINGCOLLABORATION, DATA ANALYSIS AND MOBILITY CAPABILITIES
60%
EM
PLO
YE
ES
GLO
BA
LLY
ARE CONCERNED THAT THE DIGITAL TORRENT IS COMING FASTER THAN THEY CAN COPE
51%OF CIOS
Source: KPCB/Mary Meeker. Internet Trends 2014: Code Conference
Mobile the new normal
Desktop PCs Notebook PCs Tablets
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013
Mill
ions
of
unit
s sh
ipped
80
60
40
20
OEM Revenue Opportunity | Market Forecast CY17
Source: IDC Sept 2013 and Microsoft
Auto & Trans Retail Manufacturing Healthcare Energy Computing Telecom Consumer
$7 B $16 B $197 B $3 B $27 B $908 B $179 B $356 B System Revenue
Intelligent Systems1.7T$
The Internet of Things: By the Numbers
B5075212
Market Opportunity
2018
$102.9B
2011
SAAS
21.3% CAGR
$39.3B
IDC, Worldwide Software as a Service 2014–2018 Forecast and 2013 Vendor Shares, Doc #249834, July 2014 )
A Rapidly Transforming Cloud Software Market
Source #2: IDC Direction 2014, Transformation Everywhere How SaaS Gets Built, March 2014Source #1: IDC Forecasts Worldwide Public IT Cloud Services Spending to Reach Nearly $108 Billion by 2017 as Focus Shifts from Savings to Innovation, 2013 )
Software Revenue Growth
Rate in 2017
Customers are buying services, not applications or servers
Shifting adoption patterns: using SaaS as a way to extend on-premises applications to replace existing applications with cloud alternatives
91% of net new software is built for cloud delivery in 20142
20% of all applications revenue in 2014 is generated by SaaS1
0%
5%
10%
15%
20%
25% 22%
4%
SaaS/PaaS Revenue
Packaged
Software
5.5x higherCloud SW
growth than packaged SW
“ By 2017, the CMO will spend more on IT than the CIO and
control most of the technology spending.
Source: Gartner
“
How will you deliver fluid experiences that…
…untether the workforce
…transcend time, place, context, and device?
…connect customers
The challenge of mobility
Where is the value?
Where do you invest?
Different paths (and economics) to appsINVESTMENT NATIVE UX MARKET
Native app Empty Full Empty
Native Web Full Empty Full
Cross-platform
Half Half Full
Universal app
Full Full Half
How will you adapt to a cloud first world…
…unlocking new markets
…as the economics of software shift?
…enabling development agility
Increasing deal size with the cloud
Solution on Customer Hardware
Customer has £600k budget
Hardware/maintenance cost =
£300k
Software license opportunity =
£300k
Solution on Azure
Customer has £600k budget
Azure cost to run = £150k
Software license opportunity =
£450k
Leading in a cloud-first worldStrong Focus and CommitmentClear business model and customer segmentationInvestment in dedicated or experienced resources
Seller Incentive To Drive CloudComp plans or sales incentive developed to drive the right selling behaviorAppropriate partner margins to encourage channel to lead the change
Pricing That Drives Business ObjectivesPriced with competition and/or existing offerings taken into considerationIncentive for selling SaaS over other products to accelerate early adoption
Well Integrated and VisibleInternal systems adapted and ready at launch – Learn, Try, Buy clear on websiteChannel and field ready with relevant offers and incentives tied to marquee industry event
