June 24, 2014
Video: Redpoint’s Tunguz & SaaS Benchmarks
Redpoint Ventures partner and former Google Product Manager, Tomasz Tunguz specializes in benchmarking software/platform-as-a-service compan...
Thank you. I really appreciate it. I always love coming down to Heavybit. Got to talk to so many good groups today, and I'm just constantly really impressed with how each of the companies are doing. Some awesome work to make developers' lives better. Thank you for putting all your passion into the work that you're doing.
Just a little bit about me, I'm Ed Blankenship. I started at Microsoft. I'm going on my fifth year so far, and I started out in engineering as Program Manager for environment management, release management, lab management. I moved, about three years ago, to launch our SaaS-based service, which is now Visual Studio Team Services.
I've been in that role for quite a while now as a product manager for a DevOps family of products. And before Microsoft, I actually was awarded as a Microsoft MVP for five years. I was a consultant for application lifecycle management and DevOps for many, many enterprise teams.
Even before that, I was Release Engineering Manager at a dev tools startup for nine different product lines. So I've been doing this kind of work for about 10 years now, especially keeping in touch with how enterprise development teams are managing and building software.
I've been with our product line since the beginning of it, 10 years ago with TFS, so it's been a long journey. But I love this space, and I love helping teams get better about building software.What I really want to do today is talk a little bit about how you can leverage enterprise channel partners, and that always comes along with how you build a CIO value prop, since you want to sell to enterprise development teams.
The first thing I usually like to start with is just talking a little bit about the types of partnerships. If you have a community team and a field marketing group, then you might have individual developers covered from a coverage standpoint.
But if you've got less than 10 people managing your sales, which I think that's a lot of us in the room, then companies like Microsoft can be potentially a really great partner for you to help with reaching development teams within the enterprise.
Just to think about the kinds of different partnerships that are available with companies like Microsoft: There's reseller partnerships. There's certainly consulting services that are available. There's software and service vendors like you. There's our sales field, and then another one that a lot of companies forget about, which are actually influencer partnership networks.
At Microsoft, we call these the Microsoft MVPs and the regional directors, and they're a very important group of people that we have. As we think about the Microsoft partnership community, I'm narrowing it down just to our software vendor partners, but we have a ton of partners. And this is really important to making Microsoft successful with the developer community.
Our vision is to build an open and flexible tool chain for any app, any developer, on any platform.
The developer community has really been seeing that over the last few years, and we've been doing a lot of hard work to make sure we're making the right decisions, building the right products to make that happen and that we have some ways to go with that. And really the teams that are here and the other dev tools startups are really helping us by helping us do that.
I've just got some numbers up here about some of our traction so far, but we have a marketplace that has extensions available for Visual Studio Code, our lightweight, cross-platform editor, which developers love. We've already got 1,177 extensions there. We have our traditional Visual Studio IDE, which of course developers love as well, with over 6,500 extensions.
We just introduced, for our SaaS-based service for development teams, Visual Studio Team Services. We introduced that back in November, and we now have over 170 extensions in the store. There are lots of great partner development that we've had.
The reason why partners end up choosing us is because our reach across the globe to the developer marketplace is huge. We have a wonderful developer community, over 10 million developers, and the reason those partners really like taking advantage of partnering with us are because of the bullhorn that we have to being able to reach those.
We have lots of different ways that you can take advantage of the Microsoft bullhorn to reach the developer community. Things like our developer events constantly get millions of developers, event booths, PR, newsletters and blogs. One thing that a lot of partners miss out on is that we have developer subscriptions that are both free and paid developer subscriptions.
Our partners like to provide additional benefits to those subscribers, and those are great customer bases. Because the leads that come off of those are incredibly valuable.
They're really well targeted for development teams, wonderful stuff there. I usually like to help people understand that we actually have really good machinery as well, for helping development teams through different kinds of funds.
For example, we have BIF funds and CIF funds. I won't go into the boring details there, but it's basically money to help development teams implement a certain practice. We've been really helping teams implement DevOps practices, but we put the funds behind that to help them, meet them where they are, and move them forward with their development practices.
If you have any questions about any of these, I'm happy to talk to you afterwards about how to leverage these. But getting access to this bullhorn: One of the other really important ways of doing this is through our 250 direct developer sellers who own accounts, who have coverage from many Fortune 1,000 companies across the world.
As those sellers aim to serve their customer, they often mention non-Microsoft solutions or dev tools that are well integrated into Microsoft products, and they do that because they want to help out customers. It's helping them out with a sale. We like to build really great platforms that other ecosystems can build on top of. And these sellers are awesome.
I love our sales team. They are amazing. They have helped us create over a billion dollar business every year, and they are killing it every year for us. It's because they have the best relationships with CIOs and VPs of Engineering, and technical decision makers, across these Fortune 1000 companies. So I love them. We use them to help us push and make sure our customers know how we're helping them out.
One of the things you want to consider when you want to partner with an enterprise partner like Microsoft: You're going to want to reframe your message, to make it appropriate for selling to the CIO or the technical decision maker, instead of the developer.
Some of the things that I've noticed that tend to work out really well with CIOs and technical decision makers, especially as we do executive briefings in our executive briefings center, is
it needs to go about addressing organizational pain. And a lot of those pains stem from scaling.
If you can think about being a CIO with thousands of engineers under you, one really big thing that resonates well is increased productivity. They're constantly concerned about reducing costs.
Another thing that's been really interesting lately in the last few years has been leaders wanting to make sure that their teams are able to be faster to market. As you think about it, startups are upending their businesses. So something that helps, to get better about shipping to the market quicker, is going to help out.
DevOps is really one of those big things that fits in that area lately. Another one is standardizing tools. CIOs don't really like to see proliferation of toolsets, and so that's one of the things that Microsoft has really been trying to do, which is provide a platform that meets the needs of their teams but allow for a pluggable ecosystem.
Seamless integrations is another one of those. If you've been running into enterprises who are really concerned with mitigating their compliance risks, or actually just risks in general, but compliance in particular, it's really expensive to maintain compliance. So CIOs are really interested in that: security, identity, uptime and availability, all the usual ones you could think of.
Because of those value props that resonate with CIOs, there's some major areas of investment that we've been making. Some of them have been around helping out with continuous integration and continuous delivery, but also automated testing and automated deployment.
You might have noticed a big acquisition just a little while ago. The last time I was here was with Xamarin for mobile development, developer productivity. We're moving more into the production space, to help development teams out, things like monitoring and understanding root cause analysis, and certainly, analytics.
But for us, it's all about the cloud. One of our jokes internally is all roads lead to Azure, and that's something that's super important to us.
Why don't we talk just a little bit about what a good partnership looks like. How can you potentially be a really good partner with someone like Microsoft? I'm going to just do a couple of case studies here really quickly.
Two that were just really recent for me were both LaunchDarkly and Redgate. We asked both companies to come up on stage at Build and announce their integrations. The key thing there that we saw, that was really valuable to us, was that their solutions added value, on top of the solutions that we provided, in a really awesome way.
The teams quickly put together a really cool, integrated story, built on top of that, built an extension, launched it out, and it was really great for us. For us, we got to show the benefits of our recently released marketplace and extension model, as well as being able to extend our DevOps story.
For LaunchDarkly, if you're not familiar, they have great feature flags as a service, and that builds really well with our release management, our automated deployments, as well as our agile portfolio tracking features that are going through. Redgate's really great about managing database schema changes and visualizing those, as part of the release process. They fit really well, and that was a really easy story for us to be able to tell better together.
Another case study that I was going to mention was Xamarin. Before we acquired Xamarin, Xamarin was a really great partner with us. And the reason was, if you were a seller of Visual Studio, we needed to have an answer for mobile developers that were within the enterprise. The greatest thing about the Xamarin technology was we could tell a two-way story.
You could build mobile apps with Visual Studio using web-based technologies like Apache Cordova, but at the same time, you could also build native apps, reusing C# and the same code with Xamarin technology, and so it was a really good story.
Guess what? Our sales people loved going out and telling that Xamarin story. They didn't get comped on it, which, if you know any sales people, if they have to talk about something, or they want to talk about something, they want to get comped on it. But they did it anyway, because it helped them actually meet their goals as well.
The Xamarin and Visual Studio technology melding was a great story to be able to go tell.
If you've decided that partnering with a company like Microsoft would be a really good fit for you as you go out to the enterprise, I put together a set of what I would call an MVP for going out with that integrated kind of story.
The first thing, of course, is to make sure you have some kind of integrated solution with that partner. That's the first step. The second one, I would have some kind of deck that talks directly to the sales team, of that channel partner, and says why they should care about your solution.That really gets to also trying to understand the specific goals and incentives and comp plans and all the sorts of things for that group of people.
You can help those sellers out by already having a set of customer-ready decks or materials, leave behinds, those kinds of things, that have the integrated messaging together, so that they can go and share your message on behalf of you. You want that.
You also, especially for dev tool startups, you want to think about making sure that you have technical resources. These are things like package demos, technical FAQs. Because they're going to come up.
We have a technical sales team as well, that goes out and helps to sell the dev tool sellers, goes out and tells a message. These are really important, especially with dev tool startups. Don't assume that someone's going to be able just to open up the account and then demo your product the best way possible. You're going to want to really invest some time in helping others with a package demo.
The other thing I was going to mention was have a great landing page for customers. A really good example of that was lauchdarkly.com/microsoft. So thank you, Edith and Andrew and team, for putting that together. Because now we can have a central place to drive traffic from any announcements and things like that. And it's a good way to share the combined story together.
Then, at the same time, have a great landing page for just the Microsoft team, or for your partner team. That is so incredibly important, because you want to drive traffic to that page to get the latest set of resources you put so much work into putting together.
I will tell you that Xamarin had some of the best Microsoft facing materials. They knew that we were their way to grow, and they made it such an awesome experience for us, to really help them out with growing their accounts.
Xamarin has a really good one, and that URL was not ever really public. It wasn't indexed by search engines, etc., so it was really targeted just for us, and at the end of that page, one of the most important things that you want to make sure that you have for your partner is a really strong call to action.
For dev tools startups, I think the most common call to action is, "Hey, we can get you a demo account created, to help you tell our story a lot better." So be sure to make sure you make that process really easy as well.
I'm going to talk a little bit about gatekeepers. Someone earlier told me it's really hard to figure out how best to navigate really large organizations like Microsoft. And so really what you're wanting to find are the gatekeepers. You're going to have to think about this when you're looking at other enterprises, but I'll tell you a little bit of inside knowledge about how we're structured at Microsoft, just so you can understand the different moving pieces.
Certainly we have our engineering group. Right now, we have three vice presidents of three different organizations that make up the developer tools realm. We also have some others that, if you're interested in engaging and integrating with our cloud based services, we have other areas for that.
From a job title standpoint, we've got engineers and program managers within engineering. Program managers lead a feature team of about 10 to 15 engineers on a very specific feature area. If we move over, corporate marketing is the group of product managers that are there to help set strategy, but they're also doing some other things.
For example, how do we position and message our products? How do we generate cross-sell? How do we generate revenue? What's our strategy behind that? Sales field readiness, but also marketing field readiness. So there's a bit of work done here at the corporate marketing level, and that's actually the team I sit in.
I think there's about 15 of us now, on the dev side. We've got a lot more now on the mobile side, and then our team is combined now with the SQL business as well. So we have the SQL business under our same organization now, too. So that was a great win for us.
But that's the corporate marketing team. If we think about our field, this is where it gets really tricky for a lot of people just getting introduced to Microsoft. I don't even remember how many subsidiaries we have now, but we have lots of subsidiaries around the world, and each has certain goals and metrics that we have provided them from the corporate office.
If you think about it, the U.S. is a subsidiary. Canada is a subsidiary. Western Europe, Asia Pacific, there's lots of subsidiaries. We have both single country subsidiaries as well as multi-country subsidiaries. That is not particularly a detail you probably want to get into, but that is where our sales team sits. So that's the one detail you want to know.
We have both regular dev sales sellers, those are what we call SSPs, solution sale providers. We also have the technical sales team, those are technical solution providers. And those are very specialist salespeople.
We also have the broader account teams that are assigned to all of our accounts. We also have our premier support team, Microsoft Consulting Services, cloud solution architects. We also have our subsidiary marketers. They're the ones who are actually local in the market, buying, doing ad buys, and setting up events locally, things like that, as well as our developer evangelists.
We have the DX Group, which is really about there. Now, I put this up here because the other important thing is to understand everyone's goals and incentives, which can be different across teams, surprisingly. One of the big ones for our sellers is making sure they hit their dev tools revenue quota.
But as well, the one goal that is shared by pretty much everyone at Microsoft, especially on the sales side, is Azure consumption. All roads lead to Azure. I will say that over and over again.What's super important for our company is to make sure that we get more and more companies to adopt Azure, love Azure, and consume more Azure over time. That's the really important piece of that.
We really see both our dev tools, but also dev tools startups, as being a way to help us do that. That's where a lot of this comes in.
If you're ever interested in what people are interested in, that's a really good conversation to have with anyone you meet within this broader realm of people.
Because those change over time. And so you'll want to keep up with what everyone is interested in.
The other thing to think about is what is the cadence of that partner. What's the timeline look like for getting decisions made? What's the general cadence that they have with the developer community? For us, we have two big developer events every year. We have one in the spring called Build, and we have another one called Connect. That's in the fall. We have two internal sales conferences. These are conferences where we bring half the sales team. One I think is in two weeks, and the other is in the winter.
We constantly give them new information, give them better ammo for going out and being a readied sales field. We also do biweekly sales team calls. Those are really great ways where we introduce new solutions that help our sellers. We also have our Microsoft MVP Summit in November, which we bring all of our Microsoft MVP awardees in and have just an awesome time getting wonderful feedback under NDA.
They are super honest with us about everything, which is great. We have a great relationship with our MVPs. We do frequent MVP chats, so we can always do a pop-up chat at any time, whenever we find out something new. We have the Worldwide Partner Conference, which is going on actually this week. So if you do become a partner, we have a conference just for you.
If you do have any questions, I set up this email distribution list. So if you're interested in better ways of working with Microsoft, feel free to reach out to us here. We just want to make it super easy for the dev tools startups to be able to find the right people. If we aren't the right people, we will find the right people for you and make sure we can start the right conversations for you.
I'm going to end today with just a few takeaways from the session. The first one, first decision, is just to make sure that an enterprise sales channel partnership is the right thing for you. It's not the right thing for everyone. There's a lot of pros and cons to it, so you'll want to really think through that. I'm happy to talk to you about that.
The second one is to really understand the partner's goals and incentives so that you can craft your message to them, on why a partnership would be great, by knowing how your product's going to help sell their product.
Understand the decision makers. You can waste a lot of time talking to people who aren't going to get you anywhere. I think we all know this, right? Just make sure you know the right decision makers and what it's going to take for you to get what you'd like out of it.
Understand what the decision process looks like internally, and what the timelines look like, and if you're ever wondering, just ask. Sometimes it's a little bit of a nebulous thing for some of these things, and you'll be working together with your partner on the other side to try to figure some of that out.
Understand the seasonality of a partner. For example, we just started our new fiscal year, which means new revenue quota, new budget, new initiatives, new goals and metrics. And that changes. For us, that changes, sometimes every quarter but usually every half year, definitely every fiscal year. So if you're looking to get a channel partnership, make sure you understand the seasonality of the partner you're talking to, including org changes. I added that there too, because that happens a lot in some organizations like ours.
Understand the many channels that are available for you. I listed a couple in this slide deck. I'm going to make this slide deck available after the session, but there may be some that aren't listed or ones that you should figure out with your channel partner.
And then also, this is really key and I think this is key for a lot of content marketing, but when you build really good assets, you want to do that to easily amplify and scale your message. So take some time. Make some really awesome assets, and those are going to pay off big time.
My last one that I always love leaving everyone with is to ask for what you want. My favorite saying all the time is you never get what you don't ask for. So if you want something, just ask for it. The worst that will happen is they'll say no. The best thing that'll happen is they'll say yes. For an example, if you want to be on stage for one of our events, ask us to be on stage. We will tell you no, yes, or how we get to yes. Just ask for what you'd like.
I'm going to leave that there and see if we have any questions from the audience.
That's a good question, the fastest turnaround for a channel partner. It might actually have been LauchDarkly. It might be. I've done a few, but yes, usually they're long. And I'll tell you the reason why it's been long. It has been, typically, the integration part.
The typical sequence that I've seen is, "Hey, we'll have an initial conversation, and one of us will have an idea of how we could tell our story really well together and build some good value together." But then the integration part, the actual engineering effort that's involved, can take a bit.
We've done a lot of really good work to make sure that our platform is much more easily accessible. We have some work to still do, but thankfully, I think that's actually shortened things down and has become less of a cost to our team. So I'd say the Redgate/LaunchDarkly one was super quick, from the first conversation in December to being on stage in March. That's a pretty quick turnaround for the bang for the buck that we got out of it. So super happy about that.
Great question. I have a little bit of experience with the MVP program. The Microsoft Most Valuable Professional award is an award that we make to influencers in the community. These are people who are really tied in to being community contributors. These are people who are answering people's Quora questions, Stack Overflow questions, speaking out at events, volunteering their time to help their community get better.
At the same time, we look to see their realms of influence and expertise. In our particular area, I think we're renaming them, but they've always been the application lifecycle management MVPs.There's an award category for different areas like web dev, and there's even Xbox MVPs, which are always like the 12 year olds that come in. Those were always the cool MVPs at MVP summit, because they got whisked away to see all the secret stuff.
In our community, if we think about lifecycle management and DevOps, we have a group of core people around the world just for that. So it's a yearly award based on community contributions, and we also look at expertise and stuff. So they're awesome. They're a great community of people who are typically consultants.
They will represent many, many customers, especially in the DevOps ALM area, but they're all around the world. They're super smart people. They will give you really honest feedback, and if they think that you're cool, you're really cool, and they will share your solution with just about everyone they talk to. So really great community to make sure you get on your side.
One thing that dev tools startups can do to help us out, one of the things that we've been trying to do, to be quite blunt, is we've tried to be better to the developer community and do the right things for the developer community. A lot of dev tools startups have a really big sway in being able to help that broader perception change.
I think we're doing a lot of the right things. I love the people that I work with, because they are so passionate about doing the right things, like opensourcing.net and making Visual Studio Code and Visual Studio Community available for free. Lots of great stuff that we're doing, but dev tools startups can certainly help with your sway there, your perception.
But also consider Microsoft. Consider the developer community there. A lot of times, I've noticed that it's kind of a second thought, but it's certainly a good core group of developers that can certainly help to build your business as well. So just think about them. Think about the experiences that they have. Include them as part of your user studies so that you can make the best product, not just for certain groups of developer ecosystems, but as well as the Microsoft developer ecosystems.
That's a really good question. Once we figured out that we have a good story to tell together, and the process of getting to "Do we feel like this is a good story with our sellers?" we will bring early sellers in to just double check that it's the right thing, just so that our partners don't go build something that's not relevant to the broader community.
Once we figure that out, and once we've let everything loose, we say, "Hey, sellers, we got some really cool stuff to help you with what you're trying to do this quarter." I think that's the one thing that I get told to be prepared for, as a dev tools startup, is once that engine gets going, you'll have quite a few conversations with them about certain accounts that they're trying to close deals on. I think that's a really good thing.
I think a lot of startups start to get a little scared about this "scale that" that happens, so I would say we totally encourage it. Really listen to the feedback that they're getting from their customers directly. Make sure that you understand their goals.
They're trying to really help the sales, so if you could have some internal one-to-one conversations about the dynamic of that customer environment, and what's going to really make it push over for them, you're going to really be in there.
They've got go-to partners, let me tell you. They have partners that they definitely don't talk to anymore, so whatever you can do to help them out, they're going to really help you out as well.