1. Microsoft Worldwide Partner Conference 2016
9/23/2018 1:52 AM
© 2016 Microsoft Corporation. All rights reserved. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

2. LEAD22
#WPC16
How to make your cloud services business a top quartile profit performer and grow like crazy
Mike Harvath and Reed Warren
Revenue Rocket Consulting Group

3. Revenue rocket
Premier growth strategy consultancy and M&A brokerage firm in the market
Focus exclusively on IT services companies
Have worked with over 400 firms globally
Our team of world class consultants and partners all have over 20 years of experience within Microsoft Partner businesses

4. Microsoft Worldwide Partner Conference 2016
9/23/2018 1:52 AM
It’s all about… F
ocus U
niversity
© 2016 Microsoft Corporation. All rights reserved. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

5. MPN and Jen Sieger “The goddess of Growth”
9/23/2018 1:52 AM
MPN and Jen Sieger “The goddess of Growth”
© 2014 Microsoft Corporation. All rights reserved. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

6. Jen Sieger, the “Goddess of Growth” www.linkedin.com/in/jennifersieger
Five Tips for Becoming a Modern Partner at WPC 2016
Optimize Your Operations: How to Build an Operationally
Sound Cloud Business
business/?ln=en-us
Five Ways to Start Modernizing Sales and Marketing
Specialization: The Pathway to Profitability

7. Partner of the future 9/23/2018 1:52 AM
© 2014 Microsoft Corporation. All rights reserved. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

8. Optimum model for success
Microsoft Worldwide Partner Conference 2016
9/23/2018 1:52 AM
Optimum model for success
Least success
Most success
Multiple technologies
at multiple verticals
Multiple technologies at one vertical
One technology at one vertical
© 2016 Microsoft Corporation. All rights reserved. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

9. Highlights of partner of the future….
Microsoft Worldwide Partner Conference 2016
9/23/2018 1:52 AM
Highlights of partner of the future….
Technology
Focus
Customers
Marketing
Sales motion
Activities
Delivery
© 2016 Microsoft Corporation. All rights reserved. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

10. Tale of two companies 9/23/2018 1:52 AM
© 2014 Microsoft Corporation. All rights reserved. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

11. Case study #1 growing company
9/23/2018 1:52 AM
Case study #1 growing company
© 2014 Microsoft Corporation. All rights reserved. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

12. Top Performing IT Service Providers
Vertically aligned to three or less industries
Top Performers align to one industry
Focus
Cloud services
Full lifecycle of services
Wedge offerings
Technology offerings
Managed offerings
Services sold as a service level agreement (all-in-pricing)
Solid organic growth strategy with industry-specific IP
Realizing 12%–28% EBITDA with sustained 20%–40% AGR
Can see transaction multiples from 8–10x TT EBITDA
Customer view: industry expert/thought leader

13. Case study #2 Dying company
9/23/2018 1:52 AM
Case study #2 Dying company
© 2014 Microsoft Corporation. All rights reserved. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

14. Declining IT Service Providers
Geographic generalists
Focus
Sell to anybody in the geography
Sell projects—one and done mentality
Focus on technology
Cozy up to vender for leads
Reactive growth strategy
Realizing 3% to 6% EBITDA with erratic -5% to 10% AGR
Experiencing 1%–2% YOY negative EBITDA pressure
Typically see transaction multiples of 4–7x TTM EBITDA
Customer view: come install/integrate it and then go away

15. 9/23/2018 1:52 AM
Reality check
© 2014 Microsoft Corporation. All rights reserved. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

16. You are going to have pain…
Either the pain of discipline to change

17. You are going to have pain…
Either the pain of discipline to change OR
The pain of regret when you don’t change and it is too late!

18. Holistic change—go-to-market wheel
Microsoft Worldwide Partner Conference 2016
9/23/2018 1:52 AM
Holistic change—go-to-market wheel
Product and service offerings
Finance
Marketing
Leadership/ management
Operations
Sales
Product and service delivery
© 2016 Microsoft Corporation. All rights reserved. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

19. Leadership: you need to be decisive!
Chart a clear course with conviction
Not about yesterday but tomorrow
The innovation cycle
Business change management
Make hard decisions expeditiously
Politics is the art of delaying to change until it is too late to change, not business

20. Technology vs. market focus
Buyers want market specialist who can apply technology to their industry
Target market is the intersection
Industry vertical
Corporate demographics
Technology set
Service solutions
Full life cycle of services

21. Inbound trumps outbound
94% of B2B buyers report that they conduct some form
of online research before purchasing a business product

22. The Buyer has Changed $ Business Buyer not Technology Buyer
Trip Advisor effect
Buy selection made before they call $
Want industry expert

23. Why do we need to do this? 9/23/2018 1:52 AM
© 2014 Microsoft Corporation. All rights reserved. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

24. Oversupplied Market Too many technology generalists
Oversupply puts negative pressure on growth and profit
Commoditization of talent
Irrelevance of technology versus the value of a solution
Specialized market-based offerings are strategic

25. How do we measure our success?
9/23/2018 1:52 AM
How do we measure our success?
© 2014 Microsoft Corporation. All rights reserved. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

26. The rule of 45 YoY growth rate as a % + EBITDA as % of revenue = 45
Top quartile performer must be greater than 12.5% EBITDA
Top quartile performs YOY growth than 30%

27. Shoot the moon Be a top quartile performer Manage to the rule of 45
Do strategic acquisitions to accelerate growth
Sell to exit before re-entry
Have fun, make money and pay it forward!

28. Q&A