Partner Boosts Revenues 40 to 60 Percent with “Absolutely Right” Move to Cloud Services

OverviewPartner: RoseBud TechnologiesPartner Website: www.rosebudtech.comPartner Size: 10 employeesCountry or Region: United States

Partner ProfileRoseBud Technologies, founded in 1995 and based in Woodstock, Georgia, serves Microsoft-centric customers in the small- and medium-sized business sector.

Business SituationRoseBud Technologies had built a good business building solutions on Microsoft technologies. It saw the cloud as a bit of a threat—but one that it had to confront.

SolutionThe company responded to the cloud as another platform on which to build products and services, maintaining its business model and adapting its delivery model.

Benefits Customer Base Up 100 Percent Employee Productivity up 160 percent Revenues up 40 to 60 Percent

“We decided to adopt cloud services and we stuck with it. If we hadn’t done it, we wouldn’t be here today. Our business is more solid than it was 10 years ago.”

Greg Treanor, Vice President, RoseBud Technologies

Microsoft solution provider RoseBud Technologies didn’t offer cloud services to its customers and, frankly, saw the cloud as a bit of threat. But when major companies started replacing on-premises infrastructure with cloud services, the company knew it had to adapt or risk irrelevance. RoseBud found that its business model remained appropriate in the cloud-based market, but that its delivery model did not. It made a painful cut in staff and increased its marketing resources. Five years later, the company’s productivity is up 160 percent by a key measure, its customer base is up 100 percent, and revenues are up 40 to 60 percent. The move to the cloud “was absolutely the right thing to do,” says an executive.

SituationBy 2009, RoseBud Technologies had been a thriving technology provider and Microsoft Partner for 14 years. The company, headed by the father-and-son team of Joe (Bud) Treanor and Greg Treanor, had a business strategy summed up by their motto: “Intellectual Capital for Your Business.” They didn’t sell hardware. They didn’t even sell software licenses (they sent customers to distributors for that). But what they did sell was their time and expertise in helping customers—especially small and medium-sized customers in and around the greater Atlanta area—to get the most business value out of their existing technology, and to make the smartest business decisions about the judicious acquisition of additional technology.

“Big companies and small companies generally used the same desktop, server, and business productivity software,” says Bud Treanor, President, who founded RoseBud Technologies after a career as a corporate executive. “But the small businesses didn’t always understand what they had and how best to use it. We could help with that. That was our sweet spot.”

For example, many of the company’s small-business customers already used Microsoft Small Business Server but didn’t—according to Treanor—use it at its full potential. Maybe they used it for email, but didn’t take advantage of its intranet capabilities. Or maybe they bought the premium edition, which included Internet security, but were also sold redundant firewall licenses by providers more mindful of their own revenues. RoseBud would conduct assessments and gap analyses and discuss them with high-level customer contacts: the business owners or chief executives themselves, or senior managers reporting directly to them. Together, they would plan for RoseBud to manage the infrastructure and to help the customer make growing use of it over time.

To make expenses predictable for the customers, and revenue predictable for RoseBud, the company would propose that its engineers spend a scheduled number of days per week or per month at the customer site. It was a managed services model implemented in the context of technology consulting services. RoseBud regarded Small Business Server as a platform, and made its money with projects and services on top of it.

By 2009, Microsoft was advising its partners to get ready for cloud services but, like many of those partners, RoseBud regarded the cloud as a threat, not an opportunity. It had built its business on Small Business Server and the cloud would take Small Business Server away. Microsoft, not RoseBud, would service the infrastructure. Where would RoseBud make its money?

Those questions became more real, and more immediate, when Bud Treanor attended a partner conference that year in Los Angeles, at which Microsoft and Coca-Cola announced that the global soft-drinks manufacturer was ditching its on-premises email system and adopting Microsoft BPOS (the predecessor to Microsoft Office 365).

“That was an eye-opener for us,” he says. “Coke had decided that the cloud was a good thing. Our customers would, too. How were we going to respond?”

SolutionFive years later, RoseBud Technologies is growing and thriving as a cloud services provider. The transformation was challenging and sometimes painful. But both Bud and Greg Treanor say the transformation was worth it. What they did, and how they did it, could be a guide to others.

Business ModelOne of the first questions for RoseBud Technologies was whether a move to cloud services would require a change in RoseBud’s business model. They concluded

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“Coke had decided that the cloud was a good thing. Our customers would, too. How were we going to respond?”

Bud Treanor, President and Founder, RoseBud Technologies

that in many ways the cloud—which would primarily mean Office 365 and Windows Intune to RoseBud’s customers—was a platform on which RoseBud could build projects and services. It would help customers to create intranets on SharePoint Online, to create analytic tools using the Power BI capabilities in Office 365, and to manage desktops using Intune, for example. (One of the next big areas for supporting customers through Office 365, the company believes, is helping them to get the most from Lync Online—both as a conferencing tool and as an Internet telephony platform.)

“We’d always told customers that we were their ‘intellectual capital,’ and the cloud would let us focus on that theme even more strongly, without having to fix servers,” says Greg Treanor, Vice President at the company. “That helped us to get comfortable with the cloud.”

RoseBud’s business had been built on predictable monthly income from managed services and consulting, and the Treanors saw that didn’t need to change. RoseBud’s business model would change in one way, though—and bring it into closer alignment

with Microsoft. RoseBud had been successful in selling solutions on Microsoft products but, the Treanors felt, because it didn’t sell licenses, it hadn’t been as visible on Microsoft’s “radar” as it might otherwise have been.

Now, RoseBud would be selling seats on Office 365, making it easier for Microsoft to track adoptions through the company. “When we sell a seat, Microsoft sells a seat,” says Greg Treanor. “It’s easier for Microsoft to see how we’re aligned with its strategy.” In its first year with Office 365, RoseBud sold 1,500 seats and managed more than 25 migrations.

Delivery ModelRoseBud’s business model hasn’t changed much as a result of the cloud—but its delivery model certainly has. And making some of those changes have hurt, according to Greg Treanor.

“We cannibalized our customer base to shift to the cloud,” he says. “We went to our customers and told them that as a result of moving them to the cloud, we wouldn’t be on their premises as much. We’d support them at least as well as we did before, but

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RoseBud Technologies’ focus on the cloud is front-and-center on its website landing page.

we’d do it remotely, and more efficiently, so they shouldn’t be paying us as much. We introduced a reduced fee schedule. That was a tough nut for us to swallow.”

And it led to the hardest part of implementing the cloud strategy. Engineers who formerly visited two or three customers per day could now service six or seven customers a day through the cloud. But that meant that RoseBud needed fewer engineers. It also meant that RoseBud could only afford fewer engineers, since it was passing the productivity savings to its customers. It reduced its 15-person staff by about 40 percent.

RoseBud faced an obvious challenge in managing this change. In addition to reducing the personnel count, the company had to change the skill sets of those who remained. “The typical network admin, end-user support skills were no longer needed,” says Greg Treanor. “Those who made it with us through the transition were those who were willing to acquire new skills, in SharePoint, for example. We put some pretty compelling opportunities in front of our staff to encourage them to educate themselves.”

Sales and MarketingThe company’s sales operation also had to change as a result of the move to the cloud. Until then, the Treanors had been their own sales force. But that was no longer possible. With income per customer down by about half, RoseBud needed more customers to bring up cash flow and revenues. That required it to scale its sales and marketing.

The Treanors invested in increased marketing and assembled their first formal sales force. They began to consider new ways of raising their visibility with existing customers, and using their knowledge about those customers to suggest projects and services that would capitalize on their cloud deployments—an update, in effect, of RoseBud’s pre-cloud business model.

Those tactics include more frequent communications to customers and webinar sponsorships. The marketing expansion at RoseBud continues.

Customer RelationshipsRoseBud’s embrace of the cloud hasn’t changed the nature of its customer relationships; rather, it has reinforced the model that the company has used since its founding.

“It’s always been our approach to talk to the senior executives at our customers, the top executives or those who have their ears,” says Greg Treanor. “And our conversation isn’t about technology, it’s about business—their business, what it needs to flourish, and how we can contribute to that. That’s what resonates with business owners and top executives. The cloud reinforces this approach, because it minimizes the technology discussion.”

The company’s approach is reflected in interactions that go beyond conversations with customer executives. For example, RoseBud’s invoices provide considerable detail on services provided—and describe that detail in business language that avoids technology acronyms.

How Microsoft HelpsRoseBud also exploits Microsoft resources that help it both to reach out to customers and to deliver cloud-based services to them.

For example, Greg Treanor cites the Microsoft Community Connections program, which helps partners work with community organizations to produce effective events, webinars, and presentations. Because RoseBud has traditionally lacked in-house marketing resources, it makes particular use of the Microsoft Ready to Go program, which provides sales and marketing collateral, call sheets, and related material. And Treanor says that Microsoft Virtual Academy is a great resource for his technical staff—

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“Those who made it with us through the transition were those who were willing to acquire new skills, in SharePoint, for example.”

Greg Treanor, Vice PresidentRoseBud Technologies

especially given the continual advancements in Microsoft cloud technologies, and RoseBud’s need to stay abreast of them.

RoseBud recently worked through the Microsoft Community Connections program to team with a provider of Microsoft Dynamics CRM services. Together, the two Microsoft partners hosted an event at a Microsoft Store. “The Store is a great, engaging environment for presentations,” says Greg Treanor. “We had space cordoned off and dedicated to our presentation, and we were able to interact meaningfully with customers.”

BenefitsRoseBud’s move to cloud services began five years ago and in some respects is still a work in progress. But some results are clear.

Customer Base Up 100 PercentBefore the cloud, RoseBud generally had about 50 active customers at any one time—with some of them active for 10 years or more, a testament to the quality of the company’s services. With cloud services, it has succeeded in doubling that customer base to more than 100 customers, with many coming from beyond RoseBud’s traditional metro-Atlanta sales region.

The company continues to take on new customers at an accelerated rate. Pre-cloud, RoseBud gained 5 to 10 new customers per year; with the cloud, it is gaining 3 or more customers per month, suggesting that its total customer base will continue to expand.

Employee Productivity up 160 percentRoseBud Technologies’ bet that the cloud would enable it to boost employee productivity has paid off. Employees that formerly serviced two or three customers

per day now service six or seven, an increase of 160 percent. The productivity gain enables RoseBud to service its expanded customer base, and also helps fuel increased revenues.

Revenues up 40 to 60 PercentToday, RoseBud sees monthly revenues that are 40 to 60 percent higher than they were before the company adopted cloud services. That increase is the result of additional customers more than compensating for the reduction in revenues per customer. And because the increase was accomplished at a reduced staffing level, revenues per employee are up 300 percent over the pre-cloud level. Business has grown to the point that RoseBud is again hiring technical staff.

“The revenue gain took a while and wasn’t easy,” cautions Greg Treanor. “But we decided to adopt cloud services and we stuck with it. In retrospect, it was absolutely the right thing to do. If we hadn’t done it, we wouldn’t be here today. Our business is more solid than it was 10 years ago.”

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Partner Designations Microsoft Silver Certified Partner Microsoft Cloud Accelerate Partner Microsoft Cloud Deployment Partner

Microsoft Tier-1 SMB Champs Club Microsoft SMB Cloud Partner Advisory

Council Member

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For more information about RoseBud Technologies products and services, call 770-926-5030 or visit the website at: www.rosebudtech.com