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Category Archives: Blog

Reasons Investors Choose D3UC

Reasons Investors Choose

Equity Bonus
Large Market Opportunity
Monthly Recurring Revenues
Experienced and Successful Management Team
Telecom Platform with Software as a Service (SaaS)
Secret Sauce for Growth Hacking the SMB Market
White Label Business Model
4th Year in Business
Execution Play
Scalable


Dear Friends,

The positive feedback we’ve been given during our growth round has generated momentum and we’ve reached the halfway point! The 25% equity premium has been well-received by investors with only five (5) eligible units remaining. Once those units are sold, we will focus on raising the last $250K and continue to accept individual investments starting at $10,000.

  • To review our entire investment profile, visit us on Gust
  • To make an investment, visit us on Venture.co* (more details below)

Please forward this blog to anyone you think might be interested in our investment opportunity. I can be reached at 973-333-3322 if you have any questions or need additional information.

Kind regards,

Chuck Daniels, CEO
D3 Unified Communications


Calling All Accredited Investors!

We have retained Venture.co* — a FINRA registered broker-dealer — to compile offering documents and supervise compliance with rigorous SEC requirements. They are also managing the transactions between investors and D3UC.

 


Currently Funded By

Selected to Present

NY Angels Rowan Innovation Venture Fund, TBA
NJIT Highlander Angels Lehigh Valley Angels, July 2017
Individual Angels Landmark Venture Forum, May 2017
Angel Venture Fair, May 2017
NJTC Venture Conference, April 2017
NJIT HAN, January 2017
NY Angels, October 2016

Request a copy of the D3UC Investor Presentation



 

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D3UC Chosen to Present at 19th Annual Angel Venture Fair!

The 19th annual Angel Venture Fair is being held this week on May 5th at the Union League in Philadelphia, PA. My company, D3 Unified Communications (D3UC), was one of 34 companies selected to present (out of 237 applications.) We have started our 4th year with strong growth in customers, revenues, and investors – receiving over half of the $750,000 needed for our growth round.

Our investors have confidence in the management team’s three decades of industry experience, our success with previous startups, and the current market opportunity for cloud-based, white label phone and unified communications services. They also understand our “secret sauce” for growth hacking the SMB market for phone and unified communications services, and how we will exit when profitable at 18x revenues and 22x net income.

We look forward to meeting Angel investors this Friday who want to join us in growing D3UC into a national provider for white label, phone and unified communications services. If you will be at the Angel Venture Fair, I hope you will be able to attend my presentation, “Using Managed Service Providers to Growth Hack the SMB Market for Phone & Unified Communications” at 11:45am in the Sheridan room. We will also have a table in the exhibitor room.

To request a copy of my presentation, please fill out the “How can we help you” form to the right and I will send a copy promptly.

Kind regards,

Chuck Daniels, CEO

 

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NEVER QUIT!

Two days of informative sessions coupled with outstanding Keynote speakers—and exploring the French Quarter, of course—created a rewarding and memorable MSP conference.

For the sixth consecutive time, I was able to attend MSPWorld which is hosted by the MSPAlliance—the largest and oldest vendor neutral organization for cloud and managed service providers. Making new connections is always an integral part of the event but learning from experienced MSP owners and keynote speakers about how to be a better leader and business owner are immensely valuable.

The Keynote speakers were prominent government officials—one from the FBI and the other from the Navy—now retired from their respective duties. Special Agent Brent Watkins shared some stories about his 20+ years with the FBI but focused mainly on important internet security issues. Robert O’Neill, the leader of Navy SEAL Team VI, also told some intriguing accounts of his missions during active duty with his focus on creating “high performance teams.”

Rob spent most of his time talking about how Navy SEAL training creates these high performance teams, emphasizing perseverance and critical leadership skills that were very relevant to owners of MSPs. His words were very motivational to me as the owner of an MSP continually trying to build high performance teams of my own.

These are the pearls of leadership wisdom that resonated with me:

• Everyone needs good people skills because no one wants to work with a jerk
• The keys to success are training, communication, and repetition
• Learn to take emotion out of the decision-making process
• Don’t react but do respond
• All stress in life is self-induced and you only feel the amount of stress you allow
• Planning is important but execution is the key to success
• Panic does not help and it is contagious
• Your enemies are your doubts and everyone who ever said you couldn’t do it
• Focus on the mission success – what are you trying to achieve
• Complacency is caused by success and it kills
• Failure is one of the greatest learning experiences
• Never pass up the opportunity to not say anything
• NEVER QUIT!

To read more about Rob O’Neill and his experiences, check out his new book.

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Week 12: Consumption Economics Predictions Came True…Now What Do We Do?

This is the final post in a twelve week series. “A Few Words From Chuck–The Epilogue” is the culmination of Chuck Daniels’ 30+ years of industry knowledge, the recommendations from Consumption Economics, and a real solution to address the shifts. It is specifically written for MSPs serving the SMB market who are looking for ways to capitalize on the shifts identified in Consumption Economics.

A FEW WORDS FROM CHUCK—THE EPILOGUE CE

For the last eleven weeks, this blog series focused on predictions from the TSIA as presented in Consumption Economics–The New Rules of Tech. We discussed WHAT needs to be done, HOW it should be done, and WHEN to do it. This week, we offer a specific solution that directly addresses five of the seven shifts: the D3 Unified Communications White Label, Cloud-based Phone and Unified Communications platform.

On the surface, this seems completely self-serving so please allow me to explain. The founders of D3 Unified Communications established our company exclusively for technology VARs and MSPs for the sole purpose of developing a service that would allow them address the challenges described in Consumption Economics. If you recall from Week 1 of this blog series, we outlined the seven shifts that Consumption Economics predicted in 2011 would permanently change forever how customers consumed technology services. The D3UC White Label, Cloud-based Phone and UC services help MSPs address the first five shifts while generating monthly recurring revenues with profit margins of 50% to 100%.

Below is a description of each shift and how the D3UC solution addresses the shift to the benefit of the MSP and their customers:

Shift #1: The risk in the purchase decision will shift from the customer toward the supplier.
What this means to the VAR or MSP:
Customers no longer want to risk their capital dollars to buy technology solutions that may or may not perform as promised. They want YOU to buy the technology solution and sell it to them for a monthly fee based on their usage.
How the D3UC solution helps: D3UC does not charge upfront fees to VARs or MSPs. Our White Label Resellers and White Label Agents pay a monthly fee based on the number of devices on the platform. Prices for IP phones range from $100 to $200 and are a pass-through cost to the customer—either paid upfront or monthly.

Shift #2: Complexity’s long and illustrious reign will end. Simplicity will be king.
What this means to the VAR or MSP:
Customers are tired of complexity. Simplicity is becoming the new hallmark of sophistication. When it comes to the technology services they buy, they don’t want to wait months for customization, configuration, implementation, and training to be completed before they can benefit from the new technology. They want the entire implementation cycle for a new technology purchase to be completed in weeks instead of months.
How the D3UC solution helps: Simplicity is at the heart of the D3UC platform. It takes approximately 10 minutes to take a new IP phone out of its box, provision it via the D3UC Portal, plug it into an internet connection, and start making and receiving calls. White Label Resellers and White Label Agents (or their customers) can perform all activities necessary to set up an entire office through the D3UC internet Portal. Everything can be resolved remotely via the Internet Portal.

Shift #3: Cloud customer aggregators will shrink the direct market for technology providers.
What this means to the VAR or MSP:
Most technology VARs and MSPs serving SMB businesses currently sell premise-based “infrastructure” solutions that provide revenues from the sale of equipment and the services necessary to install and support them at the customer’s location. Now, Cloud-based infrastructure competitors sell lower cost solutions bundled with Phone & Unified Communications services directly to SMB companies, eliminating many VARs and MSPs along the way.
How the D3UC solution helps: Our platform allows VARs and MSPs to supplement their current, declining profit margin infrastructure solutions with higher profit margin Cloud-based Phone & Unified Communications services. The D3UC platform is price, feature and function competitive with the offerings of the larger, infrastructure solution competitors and provides monthly recurring revenue streams with profit margins of 50% to 100%. The D3UC solution also helps VARs & MSPs transform their business models from the old CapEx model to the new OpEx model.

Shift #4: Big changes will come to the VAR & MSP channel ecosystem.
What this means to the VAR or MSP:
Prior to the advent of the Cloud, it was not cost effective for large technology vendors of Phone & Unified Communications solutions to sell their products and services directly to the SMB market. Instead, they sold their products and services to the SMB market through VARs and MSPs, bundling them with their own professional services – installing, configuring, training, and supporting the product. The Cloud has completely changed these relationships. Large technology vendors no longer need to rely on VARs or MSPs to sell their products directly to the SMB market and customers no longer wants to buy a product and pay professional service fees to VARs or MSPs if they can buy the same capabilities on a monthly basis via a Cloud-based provider. This is the #1 threat to the VAR’s and MSP’s business model.
How the D3UC solution helps: The D3 Phone & Unified Communications White Label, Cloud-based platform levels the playing field for VARs and MSPs. D3UC White Label Resellers and White Label Agents are able to offer competitive, feature-rich functionality branded with their name which generates additional revenue streams — selling and installing phones, providing training via the web, and signing managed services agreements for ongoing support and problem resolution. D3UC believes that the customers of VARs and MSPs prefer to maintain their current relationships with their trusted technology providers. We say this confidently as long as they are able to provide the same competitive pricing as the large competitors while also supporting how their customers now want to consume their technology purchases – in monthly OpEx payments instead of large, upfront CapEx payments.

Shift #5: Cheaper enterprise technology software will emerge.
What this means to the VAR or MSP:
For the longest time, large technology vendors have had a strangle-hold on their markets because they were the only ones who had the resources and endless R&D budgets. The “Open Source” movement was started to break the hold the existing vendors had on their markets by creating “free” alternatives to the expensive and proprietary solutions from the large technology vendors.
How the D3UC solution helps: The D3UC platform is a direct result of the Open Source movement in telecommunications products and services industry. The Open Source components in the D3UC platform are free from hardware, software and licensing fees. By operating a Phone & Unified Communications platform that has no upfront software and licensing fees, D3UC is able to pass significant saving on to our White Label Resellers and White Label Agents. They have the power to upsell features and set the price for the Phone & UC services they sell.

ABOUT THE FOUNDERS OF D3 UNIFIED COMMUNICATIONS

In 2005, the three founders of D3 Unified Communications were hired to create a Cloud-based telecommunications subsidiary for a large banking cooperative. Partnering with local MSPs was the key to their success; together, they helped deliver a combined voice and data solution that was superior in price and functionality to the competitive offerings of the phone and cable companies. The company grew to 600 locations in 15 states with over 10,000 phones in just eight years. During that time, Chuck, Mike and Imran witnessed the struggles of the technology VARs and MSPs serving the SMB market. This observation combined with the reality of Consumption Economics is what prompted them to establish D3 Unified Communications in 2013. Their White Label, Cloud-based Phone and UC platform was created exclusively for MSPs for the sole purpose of addressing the shifts outlined in Consumption Economics.


Please let us know if this post or any other post in our Consumption Economics blog series resonates with you by leaving a comment. We do value your input!

D3UC is dedicated to and entrenched with the MSP community. We have spent the last 18 months perfecting the D3UC platform and developing everything you need to sell Phone and UC services to your customers. Everything is branded in your company’s name; you sell it as your own and reap significant profits!

If you would like to discuss how D3 Unified Communications can help your company capitalize on the shifts predicted by Consumption Economics and prosper in a Cloud-driven world, please call me at 973-333-3322. I look forward to your call.

Originally published July 19, 2015. Reviewed December 2016.

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Week 11: Consumption Economics Predictions Came True…Now What Do We Do?

This week, we present Chapter 10: Customer Demand vs. Capital Markets: How Fast Should You Transform? This is the eleventh post in a series dedicated to helping MSPs understand and adopt the recommendations of Consumption Economics–The New Rules of Tech. Chuck introduces the chapter by sharing how the content resonates with his 30+ years of industry insight.

A FEW WORDS FROM CHUCK CE

In his State of the Union Address in 1962, John F. Kennedy said, “The time to repair a roof is when the sun is shining.” Today, the weather in the technology sector is overcast with severe storms being forecasted for the near future. “The Cloud” is the storm that is going to hit every provider of technology services. This forecast is 100% accurate – it is not a matter of IF it will strike your company, but WHEN.

Over the last 10 weeks, this blog has focused on what needs to be done to survive and thrive in the Cloud-driven world, and how to do it. When the transformation actually begins will have a tremendous impact on a company’s success. Now is the time to take action while the light from the sun is still visible in the sky.

All technology companies will need to offer Cloud-based products and services – your customers will find what they are looking for with or without your company. There is no doubt that it will be much easier to transform your business model before the storm hits. Remember, Consumption Economics was written in 2011. Fast forward to 2015, many technology companies are already feeling the effects of the storm while the rest have been watching the storm’s approach.

Ignoring the predictions of Consumption Economics for your technology business is akin to disregarding the hurricane warnings issued by the National Weather Service. The Category 5 hurricane that Consumption Economics predicts will strike the technology services industry will cause catastrophic damage. It is time to fix the roof and batten down the hatches.

Your company needs to have Cloud-based options ready for your customer’s next technology refresh. Don’t try to fix your company’s roof during the hurricane – it greatly reduces the chances for your company’s survival. Waiting any longer to develop Cloud-based solutions means more customers for your competitors. As you will read below, it will take you months or years to make all the necessary changes to your business model.

This last chapter of Consumption Economics addresses the issue of when a company should transform and provides insight on the state of the ecosystem. It is worth reading twice.


AN EXCERPT FROM Consumption Economics—The New Rules of Tech

Chapter 10: Customer Demand vs. Capital Markets: How Fast Should You Transform?

Predicting the future is one thing, and we are pretty confident about what’s coming. Calling the timing of when the new model will become the standard in a given market sector or geography is much more difficult. The Pragmatists agree with the core trends and their implications. They see that their cost structures were built to manage expensive complexity and just can’t be supported at these lower price points. They see future growth coming less from the big customers they know and more from the little customers they don’t know. They see the power of the concepts but are wondering how fast they can and should move toward the Consumption Model.

It’s a delicate balance to manage—a high wire to walk without falling off. They have a product playbook business model today that they depend on for their current revenue and profits. On the one hand, they want to keep that going for as long as they can.

On the other hand, they see the vulnerabilities that could result from clinging to that model for too long. They are watching salesforce.com and Workday gain market share over SAP and Oracle. They have seen VMware seemingly come out of nowhere to capture a whole new market opportunity by being a stepping stone to the cloud. They wonder what Google will get into next. They see “consumer grade” devices being used where “enterprise class” was once the norm.

A senior exec at one of the world’s largest tech companies commented to us: “We talk about all this new behavior we want and, as we get close to the end of the quarter, we tell all the sales reps to go out and sell boxes.” That is the conundrum. There is often a balancing act between what our progressive customers want and what our short-term investors expect.

We have to start the journey no matter what Wall Street thinks in the short term. We have to educate them on what our progressive customers are telling us they want and what the future competition will look like, and we have to smartly model out the financial transition. Then we have to get our transformation started ASAP. Think of it as a 12-step program to wean our company, the financial analysts, and even our shareholders off of the old model. Otherwise, we will run it until it fails. We will take our company and crash it into the Margin Wall.

We believe that within the next two cycles of technology refresh, most customers will move away from the old model. If your tech refresh cycle is typically three years, then our rule of thumb would say you have six years to be completely transformed. If your cycle is two years, then you have four. Given the scope of the changes we have been talking about across your development, sales, marketing, and services organizations, four years is not very long. And making it even more urgent is that new customers in emerging markets around the world may just decide to skip on-premise IT altogether. They might just go straight to the cloud.

No one can give you an exact date. That’s why the first exercise in your Margin Wall homework is to calculate the length of runway you have in front of you. You have to study the tech refresh rate in your category. You have to look at how economically compelling the
“________ as a service” value proposition is in your sector, especially with your aggressive start-up competitors. You also have to consider your brand positioning. Do customers expect you to be a leader on new trends? Are your early-adopter customers already giving you fair warning that you need to get going?

The second major assessment tech executives need to make is how difficult it will be to design and install your new Consumption Model. Think of this as the height of the Margin Wall that you need to fly over. The two subsidiary questions are, of course, how much will the transformations cost, and how long will they take to plan and execute?

Your competition and your customers are moving to the other side. Apple is there. Salesforce.com is getting close. Amazon, Rackspace, NetSuite, Google, IBM, and HP are all pouring money into both their cloud infrastructure and their cloud business models. Dell is
reinventing itself around it. You have to get there. You can’t hope it will be on somebody else’s watch. Consumption Economics is coming to a market near you. You need a plan yesterday and action tomorrow.

The end result is this: How tech companies operate and how they make money will change more in the next 10 years than they have in the last 40 years. These changes will mean that lots of the common wisdoms, experiences, skills, and models that have gotten us this far may no longer apply. The changes are major, and the courage to make them will not be easy to come by. There will be a lot of entrenched forces telling you to hang on to the past. We think that your leading-edge customers, your next generation of internal leaders, and your long-term shareholders are of a different mindset.

Consumption Economics means that there are new rules of tech. Those companies that get them right will rule.

NEXT WEEK: Epilogue: How D3 Unified Communications can help MSPs capitalize on the shifts predicted by Consumption Economics and prosper in a Cloud-driven world

Because D3UC is dedicated to and entrenched with the MSP community, each week a new chapter of Consumption Economics will be discussed with emphasis focused on the challenges faced by VARs and MSPs who are transforming their companies’ business models to survive and thrive in the new, Cloud-driven world.

If you would like an overview of the book Consumption Economics, you can download a copy of the “abridged” version written by the TSIA from our website.

Originally published July 12, 2015. Reviewed November 2016.

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Week 10: Consumption Economics Predictions Came True…Now What Do We Do?

This week, we present Chapter 9: Consumption Services: Will They Someday Own “The Number”? This is the tenth post in a series dedicated to helping MSPs understand and adopt the recommendations of Consumption Economics–The New Rules of Tech. Chuck introduces the chapter by sharing how the content resonates with his 30+ years of industry insight.

A FEW WORDS FROM CHUCK CE

Chapter 9 of Consumption Economics reminds me a saying I have heard throughout my entire career, “A sale happens once, but customer service happens every day!” In the new world of customer-driven technology consumption, this says it all! If you haven’t noticed already, your sales team is no longer the driving force behind closing deals. Your “service” organizations – professional, technical and customer – are the superstars driving sales and represent the primary revenue generators.

It is a concept that is hard to grasp; one that was foreign, until recently. The people in your sales organization – the ones who know a product’s features and functions, and physically close the initial deal – will no longer be recognized as the “rainmakers” in your company. It is the people in your service organizations – the ones who interact with the customers, witness their struggles, and help them learn how to use the products by listening intelligently (as discussed in Week #7) – who will be generating the majority of new sales.

Customer service isn’t a new concept. What is “new” is the fact that customers are demanding service…EXCELLENT service. Today, “good enough” products and extraordinary customer service trump exceptional products and mediocre customer service. It’s that simple. If several employees become proficient using your product they will spread the word – leading to more consumption and more sales. Conversely, a frustrated employee having difficulty with your product because no one is helping them “after the sale” will, undoubtedly, negatively impact future sales of your product.

So think about this carefully as this pertains to your company. Who will “own” the revenue targets you set? Will it be the employee who interacts with the customer once or twice? Or will it be the people who support your customers every day? Your answer and how you act on it will profoundly impact the future success of your company. Read on for more information.


AN EXCERPT FROM Consumption Economics—The New Rules of Tech

Chapter 9: Consumption Service: Will They Someday Own “The Number”?

Perhaps nowhere is the need to transform more important, more urgent, or more delicate than in the services realm. Why? Well, we have two major corporate problems that will fall into the laps of the people who set service strategy.

Here is our first service problem: We have billions of dollars in industry profits at stake on a value proposition that is running out of steam. Customers feel like they are held hostage by it, and quite honestly, who can blame them? It is our products that are complex, hard to use, hard to customize, and that require constant attention to keep running. The idea that customers are spending a huge percentage of their budgets to pay us to deal with a problem that we created seems a bit absurd. We need to switch the value proposition of product-attached service offers while the plane is still in the air. If we don’t, the Golden Egg is going down with the plane. No one can let that happen. No one.

Problem number two is about the gaping hole in our Consumption Model strategy. We currently have no capability in sales or services to effectively help grow the customer in the age of Consumption Economics. The risk shift puts the onus on us to help customers through this pay-as-you-consume evolution, yet we have no group charged with guiding them through it and, in return, capturing the maximum dollar value of their future spending for our company.

Services of all types — professional services, education services, customer support, field services, managed services, outsourcing services — need to move beyond technical expertise. They need to move beyond installation and maintenance. They need to move beyond being cost centers. They need to move beyond being considered simply “product attachments” by Wall Street. They need to break out of their shells in order to protect and defend their current golden revenues, and to answer the company’s call for someone to own “growing the trees” in our cloud customers.

How are we going to do this?

We are going to move services from the center of the customer lifecycle to both of the edges. We are going to repurpose the asset toward new skills and new offers. We are going to take on consumption optimization and the realization of customer value as our main jobs. And services organizations are going to end up owning the customers and owning “the number.”

The goal of Consumption Services is not just to remedy the risk that customers took to get the product to a minimally acceptable level of value. The goal is to take them all the way; to help every customer realize the maximum business value that our whole product and services portfolio can provide. We need to align our service assets with the true requirements that our customers have — to help business buyers get business outcomes and help end users get personal productivity and enjoyment outcomes. In achieving their goals, we also will achieve our own.

NEXT WEEK: Chapter 10: Customer Demand vs. Capital Markets: How Fast Should You Transform?

Because D3UC is dedicated to and entrenched with the MSP community, each week a new chapter of Consumption Economics will be discussed with emphasis focused on the challenges faced by VARs and MSPs who are transforming their companies’ business models to survive and thrive in the new, Cloud-driven world.

If you would like an overview of the book Consumption Economics, you can download a copy of the “abridged” version written by the TSIA from our website.

Originally published July 5, 2015. Reviewed November 2016.

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Week 9: Consumption Economics Predictions Came True…Now What Do We Do?

This week, we present Chapter 8: Consumption Sales: After a Great Run, the Classic Model Gets an Overhaul. This is the ninth post in a series dedicated to helping MSPs understand and adopt the recommendations of Consumption Economics–The New Rules of Tech. Chuck introduces the chapter by sharing how the content resonates with his 30+ years of industry insight.

A FEW WORDS FROM CHUCK CE

This is the chapter in Consumption Economics where the “rubber meets the road”. The previous three chapters focused on how to create and market the technology products and services that customers want to buy and use today. One of the last steps in the process is figuring out how to sell in the new customer-driven technology consumption world (next week’s focus is on service!)

For the last three decades, selling technology products full of features and functions designed to meet the needs of a broad range of customers required a well-understood set of skills. To achieve your company’s annual revenue targets in the world of Consumption Economics will require changes—your sales team needs to transform just as your product development and marketing teams did. Figure 8.3 below highlights the areas of the sales playbook that are no longer applicable and recommends what the sales team will need to develop and perfect.

There is no easy way to deal with this. Changing your company sales processes, messaging, compensation models, and skill sets will take many months of dedicated work. This is undoubtedly the toughest part of your company’s transition from the old CapEx model to the new OpEx model. The unfortunate reality is that some of your sales team will not be able to make the transformation successfully.

As a leader in your company (whether by title or not), you now have the knowledge and insight from Consumption Economics to make a change. Let the recommendations guide you to a successful outcome…and don’t ever look back! Read on for more information.


AN EXCERPT FROM Consumption Economics—The New Rules of Tech

Chapter 8: Consumption Sales: After a Great Run, the Classic Model Gets an Overhaul

The days of standard products with consistent benefits from customer to customer are coming to an end. Complexity and features proliferation have seen to that. But most companies’ business processes, especially sales processes, are built in the classic product playbook model.

Winning profitable new customers in cloud, managed service, and outsourcing deals will take very different skills and steps. We need consulting skills and service-oriented compensation models. We need salespeople who think on their feet, absorb complexity and uncertainty, and are uncomfortable selling with canned pitches—ones who are business experts much more than sellers of speeds and feeds. Neither tomorrow’s customers nor your salespeople may truly be able to articulate, much less architect, the end benefit they seek at the time they sit down to talk. The customer of the future will be forced to place a bet on a platform of core technologies, add-ons, and services from a trusted provider who hopefully, over time, helps them navigate the complexity to arrive at the best potential benefit.

So if these are the key selling tasks of the future, how does your current sales force map to the required capabilities? Is it time for your company to begin the overhaul of your version of the classic product sales model? As we said, the sales-force transformation is making its way into boardroom meetings and uncomfortable discussions between old friends who have come up through the ranks together. More and more tech executives are realizing that the nature of the customer sales discussion is changing fundamentally and pervasively. They also see that many of their current sales resources are unlikely to excel in the new model.

CE Chart Week#9
NEXT WEEK: Chapter 9: Consumption Services: Will They Someday Own “The Number”?

Because D3UC is dedicated to and entrenched with the MSP community, each week a new chapter of Consumption Economics will be discussed with emphasis focused on the challenges faced by VARs and MSPs who are transforming their companies’ business models to survive and thrive in the new, Cloud-driven world.

If you would like an overview of the book Consumption Economics, you can download a copy of the “abridged” version written by the TSIA from our website.

Originally published June 28, 2015. Reviewed November 2016.

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Week 8: Consumption Economics Predictions Came True…Now What Do We Do?

This week, we present Chapter 7: Consumption Marketing: Micro-Marketing and Micro-Buzz. This is the eighth post in a series dedicated to helping MSPs understand and adopt the recommendations of Consumption Economics–The New Rules of Tech. Chuck introduces the chapter by sharing how the content resonates with his 30+ years of industry insight.

A FEW WORDS FROM CHUCK CE

As I mentioned last week, we are now into the “meat” of Consumption Economics – taking the information from the first five chapters and putting it into action. We are learning how to transform our business model by changing the way we do business. Remember, it is the consumer’s new behavior for technology purchases and consumption that has forced us to reevaluate and pivot.

Last week, we learned the importance of listening intelligently to customers. This allows us to find out what they exactly want and need – what they would be willing to buy today if that specific product was available (Week 7). Similarly to how we had to rethink product development, we now have to transform marketing efforts.

Consumption Marketing: Micro-marketing and Micro-buzz is this week’s focus. Keep in mind that the target customers are the same people who already said they would buy these products, if they were available. Gone are the days where you can sell a technology product or service to 100 people by convincing a single decision maker (the CEO) – you now have to persuade them all individually. It is all about creating a buzz in the customer base and taking advantage of direct connections to the end users – the same people we listened to, intelligently.

The thought of having to market to 100 end users (instead of the decision maker in the company) sounds like a monumental task. Fear not, because this chapter will show you that in the “end user technology consumption-driven world”, it is easier than you think.

AN EXCERPT FROM Consumption Economics—The New Rules of Tech

Chapter 7: Consumption Marketing: Micro-Marketing and Micro-Buzz

We believe that the new world of Consumption Economics and the cloud are about to give tech marketing a whole new job and a cool new set of tools to do it with. Why?

    • The decision maker for the micro-transactions we need to grow big accounts is now the end user.
    • In the cloud, we can know absolutely every one of them.
    • Intelligent Listening has given us the usage data from which to construct ideal Consumption Roadmaps. These paths to value will provide unprecedented insight into what these buyers want, need, and are authorized to buy at any point in time.
    • We can then put our highly targeted offers right under their noses—guaranteed—100 percent of the time.
    • We can track every reaction to every offer—exactly what worked and exactly what didn’t.

The next “big thing” in tech marketing will be “micro-marketing”—individual end-user marketing, fueled by dynamic Consumption Roadmaps, targeted specifically at end users based on their unique industry, company, job role, and level of sophistication.

Altogether, this represents a huge new frontier of competitive differentiation. After all, who can really claim to be able to accomplish this today? Nobody. Just think of the value to the customer of such a capability! An ability to basically guarantee the high end-user adoption rates that radically improve the ROI of a technology investment.

Our micro-offers need to be helpful, not overly commercial. In fact the most common ones, the feature offers, may not generate any new revenue at all—at least not directly. The most common offers we tee up for the end users have to be quite altruistic. By this we mean that they really have to be designed to further the interests and the priorities for value that the customers and their end users have. Over time, this will result in monetization for the whole cloud/MT pyramid because it will mean more transactions, more data, more processing requirements, etc.

Here is another cool concept that could be enabled by your new Consumption Model: “buzz” in an account.

Micro-buzz is all about using your direct connection to the end user to promote ideal consumption offers and news about what is going on with their peer’s use of the product—just like games and Facebook do in social groups. Imagine a user being able to see that they are in the top 10 percent of all their peers in getting value for the company through your product? Imagine another user being able to see that they are in the bottom 10 percent? And imagine the company’s management being able to see both? Whoa.

 

NEXT WEEK: Chapter 8: Consumption Sales: After a Great Run, the Classic Model Gets an Overhaul

Because D3UC is dedicated to and entrenched with the MSP community, each week a new chapter of Consumption Economics will be discussed with emphasis focused on the challenges faced by VARs and MSPs who are transforming their companies’ business models to survive and thrive in the new, Cloud-driven world.

If you would like an overview of the book Consumption Economics, you can download a copy of the “abridged” version written by the TSIA from our website.

Originally published June 21, 2015. Reviewed November 2016.

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Week 7: Consumption Economics Predictions Came True…Now What Do We Do?

This week, we present Chapter 6: Consumption Development: The Art and Science of Intelligent Listening. This is the seventh post in a series dedicated to helping MSPs understand and adopt the recommendations of Consumption Economics–The New Rules of Tech. Chuck introduces the chapter by sharing how the content resonates with his 30+ years of industry insight.

A FEW WORDS FROM CHUCK CE

Now we are getting to the heart of Consumption Economics (CE) and why I think it is such a valuable book for technology VARS and MSPs. The first five chapters of CE focus on the “what” and “why” of the seven shifts that have profoundly affected how tech companies operate, differentiate and generate revenue (Week 1 blog post). The next four chapters deal with “how” to transform your business model to survive and thrive in the new cloud based technology consumption model.

Chapter 6, Consumption Development – the Art and Science of Intelligent Listening deals with transforming the product development process. It is no longer necessary to predict customers’ needs two years into the future. Identifying customers’ current needs involves using data about customers’ usage patterns of current products (as described in Chapter 5 last week) and engaging in intelligent listening. Customers will talk to anyone about what they want and need; the key is actually listening to what they are saying. The result is the development of relevant, new products with features that customers will want to purchase and use TODAY.

The current reality is that customers desire products that are easier to use and only want to pay for features and functions that will make their work easier. Read the excerpt from Chapter 6 below. It will help you apply the Art and Science of Intelligent Listening to your product development process. Delivering relevant features and functions will drive new micro-transactions for your products and services, and generate recurring monthly revenues for you!

AN EXCERPT FROM Consumption Economics—The New Rules of Tech

Chapter 6: Consumption Development – the Art and Science of Intelligent Listening

In a cloud world, traditional product development models are starting to feel a bit old school.

Where do those critical functionality decisions get made? How do we determine what’s included and what’s excluded when developing the product? We bet it all on the Market Requirements Document (MRD). Well, in the world of the cloud, the MRD is starting to look more like a boat anchor than a stairway to heaven.

The MRD is intended to be a roadmap for the product. Arguably, next to the core technical innovation itself, this has been seen as the most important determinant of a product’s success
or failure. In it are hundreds or thousands of educated guesses made by very bright people. The collective goal of those inputs to the development process is to accurately anticipate the market. And that point — that precise point about how best to anticipate the market — is what’s about to change.

Consumption Development has three major elements: Intelligent Listening, Consumption Innovation, and In-Product Upsell. Intelligent Listening takes advantage of user-level adoption and consumption data to predict the features and capabilities most likely to be wanted next. Consumption Innovation rebalances development investments from the traditional speeds and feeds toward entirely new capabilities designed to simplify and guide the end user along predetermined paths to more advanced features, new content, and new value. In-Product Upsell bakes in recommendation engines and offer-management capabilities so that we can tastefully inject consumption suggestions into the end-user experience in real time. In those cases where these offers result in revenue-generating MTs, we need to process those transactions.

Consumption Development removes much of R&D’s risk, radically improves its efficiency, and boosts its ROI. It creates better alignment between what the products can do and the value that end users and their companies can actually achieve. Your engineers are acting on the market’s needs, not trying to guess them two years in advance. Your best and brightest people, your company, and your customer’s company can now spend their time figuring out how to guide the users to where they want to go efficiently and effectively in the real-time course of the product’s use.

NEXT WEEK: Chapter 7: Consumption Marketing: Micro-Marketing and Micro-Buzz

Because D3UC is dedicated to and entrenched with the MSP community, each week a new chapter of Consumption Economics will be discussed with emphasis focused on the challenges faced by VARs and MSPs who are transforming their companies’ business models to survive and thrive in the new, Cloud-driven world.

If you would like an overview of the book Consumption Economics, you can download a copy of the “abridged” version written by the TSIA from our website.

 

Originally published June 14, 2015. Reviewed November 2016.

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Week 6: Consumption Economics Predictions Came True…Now What Do We Do?

This week, we present Chapter 5: The Data Piling Up in the Corner. This is the sixth post in a series dedicated to helping MSPs understand and adopt the recommendations of Consumption Economics–The New Rules of Tech. Chuck introduces the chapter by sharing how the content resonates with his 30+ years of industry insight.

A FEW WORDS FROM CHUCKCE

Chapter 5 of Consumption Economics, “The Data Piling Up in the Corner” was one of my favorites. It resonated with something I learned early in my career that still holds true today: the information about an event is more valuable than the event itself. Interestingly enough, this concept is now forefront in the national discussion, only it now has a name – Metadata – made famous by the NSA. Metadata is defined by Merriam-Webster as “data that provides information about other data.”

I started my career in telecom in 1992 as a founding member of the Advanced Technology Group at MCI Communications. One of my mentors explained how the information related to a customer’s “phone call” was more valuable than the money MCI received from the customer for the call. It took some time for me to truly understand this concept until I actually saw the “information related to” a customer’s phone call.

In the world of telecommunications, the “information related to” a phone call is called a Call Detail Record or CDR. If you have never seen a CDR, it is an impressive and extensive “record” of a phone call. It can include over 50 metadata containing “data fields” with information related to a single call but does not include the content of that call. Phone numbers of both the calling and receiving parties, the start time, and the duration of the call are just a few pieces of information included in the content of a CDR.

If you are wondering — yes, this is the phone Metadata the NSA was collecting under the Patriot Act that just expired and was replaced by the Freedom Act signed this week (thankfully, they were not collecting a recording of the calls.) Obviously, the NSA believed that the information about our phone calls was more important than a recording of the phone call itself.

Just by using information about their customers’ calling patterns, one of our White Label Resellers (WLR) was able to generate an additional $1,000 in monthly revenues from their existing customer base. By reviewing their customers’ CDRs, the WLR was able to identify those who used their phone for three way calling. Since most IP phones only support 3-way conference calling from the device, a “conference bridge” becomes necessary for more than 3 users. They offered these customers free use of a conference bridge for 30 days. This added functionality became indispensable to 100 of their customers—a pure monthly profit of $1,000.

Do you review the information available to you regarding how your customers consume your technology products and services? Are there other products or services you could provide to them to generate additional revenues? Review the excerpt of Chapter 5 to find out how you can utilize pertinent information.  It could lead you to selling them additional services they might not know they need ☺!


AN EXCERPT FROM Consumption Economics—The New Rules of Tech

Chapter 5: The Data Piling Up In the Corner

The key enabling capabilities in the age of Consumption Economics are our real-time access to users and the ability to aggregate and analyze usage data. Right now, at most tech companies, that data is piling up on their cloud servers like junk piles up in your garage.  Most companies intend, eventually, to do something with that data, but for right now they are just putting a mental tarp over it.

Hewlett Packard did some pretty great things in their garage in Palo Alto. Now it is our turn. We need to take the tarp off of our pile of data and get to work on it. It represents perhaps the most important new opportunity for this generation of tech. We can leverage real-time user data to change how we develop our products, simplify their use, guide the end users to increased capability and adoption, deploy the best practices in much more targeted and in-depth ways, increase customer value, and grow big, profitable customers. In short, we can change the world by developing a Consumption Model that drives profoundly higher success rates for all manner of technologies, and with that, we can fly over the Margin Wall and rescue our products from commoditization.

Broadly speaking, we need to use our best people and their experiences and insights into how the products should be used and are being used by the most successful customers. Product managers need to begin to identify how they want the product’s use to unfold to create an optimized end-user experience and to get full adoption of the product’s stickiest, profitable features. The service organization needs to document what it learns about the successes of actual customers and the roadblocks that prevent others from achieving them. In essence, we need to identify the best practices for consuming our product’s value. We also need to introduce the ability for the product’s consumption to be guided by the priorities of our corporate customers and/or the individual end users themselves.

Week#6 CE Chart

We can’t scale all the smart people, but we can scale their insights by embedding them into the products themselves. In the future, we must build a layer of capability into the products that is designed to take the learning that comes from the product’s experience in the market and dynamically, purposefully, alters how the product presents itself to different end users in real time.

The freeing power of the cloud will enable more and more customers to try or pilot new technologies. Why? Well, for one, the up-front investment to try things goes to near zero. For many cloud offers, there is no need for installation, etc. Just sign up and go. Secondly, the risk shift means that if they don’t like it or can’t use it, then they pay little or nothing. All they have lost is a little bit of time. The risk is on the tech company, and their reward only happens if they take the right steps to ensure the customer is successful. This is Consumption Economics.

Taking a small “trial” opportunity and turning it into a huge customer—and doing that around the globe—will become a differentiating capability for tech companies. Companies that survive and prosper on this side of the Margin Wall, where prices are lower and volumes must be high, will need to get really good at this.

NEXT WEEK: Chapter 6: Consumption Development – the Art and Science of Intelligent Listening


Because D3UC is dedicated to and entrenched with the MSP community, each week a new chapter of Consumption Economics will be discussed with emphasis focused on the challenges faced by VARs and MSPs who are transforming their companies’ business models to survive and thrive in the new, Cloud-driven world.

If you would like an overview of the book Consumption Economics, you can download a copy of the “abridged” version written by the TSIA from our website.

 

Originally published June 7, 2015. Reviewed November 2016.

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