Businessmodel of Puppet

Customer Segments

Puppet has a mass market business model, with no significant differentiation between customer groups. The company targets its offerings at organizations of all industries and sizes.

Value Proposition

Puppet offers four primary value propositions: accessibility, cost reduction, performance, and brand/status.

The company creates accessibility by providing a wide variety of options. It maintains a broad range of capabilities, including orchestration, automated provisioning, configuration automation, visualization & reporting, code management, node management, and role-based access control.

The company reduces costs by enabling potential customers to try out its Puppet Enterprise product for free on up to 10 nodes. This enables them to assess whether they want to purchase it.

The company has demonstrated strong performance through tangible results. Specific positive outcomes for clients include the following:

• The New York Stock Exchange used Puppet’s solutions to scale up infrastructure and workloads efficiently, resulting in an increase from 300 servers per admin to 700 servers per admin
• LV used Puppet’s solutions to carry out its operations more quickly, resulting in faster shipping with fewer failures and its first month without any high-priority “Tier“ incidents
• Infusionsoft used Puppet’s solutions to automate and provide greater visibility into its infrastructure, resulting in its Ops team being able to manage double its prior number of servers
• Ambit Energy used Puppet’s solutions to automate everything from application deployment to infrastructure management, resulting in an increase in managed servers from 30 to 500
• Staples used Puppet’s solutions to automate its cloud management and common IT operations, resulting in a reduction in deployment cycle time from weeks to hours The company has established a strong brand due to its success. It has over 500 employees operating out of five offices. It is used by over 35,000 companies, including over 75% of the *Fortune *100. Specific prominent clients include Verizon, Intel, Sony, ADP, REI, NASA, and Salesforce.

Channels

Puppet’s main channel is its direct sales team. The company promotes its offerings through its website, social media pages, and participation in summits, expos, trade shows, and conferences.

It hosts an annual conference called PuppetConf, billed as a DevOps, automation, and infrastructure modernization event that features exhibits and educational sessions and facilitates networking.

Customer Relationships

Puppet’s customer relationship is primarily of a personal assistance nature. The company assists customers in the following ways:

Support Services – The company provides three customer service options:

• Standard Support – Includes online support during business hours, access to Knowledge Base articles, and access to product upgrades and updates
• Premium Support – Includes phone support 24 hours a day, seven days a week, an unlimited supply of online support cases, and free training vouchers.
• Technical Account Management – Customers are offered a dedicated Technical Account Manager who works closely with the client to solve any problems. Specific services include Business Management, which is a quarterly onsite review of the client’s usage of Puppet’s products, and Technical Planning, which consists of semi-annual product roadmap briefings. Training Services – The company offers instructor-led training on its products online and in person. It also enables training participants to receive certification so they can demonstrate their expertise.

Professional Services – The company offers the following services:

• Implementation Services - Implements Puppet Enterprise across clients‘ entire infrastructure
• Upgrade & Migration Services – Assists in moving clients to latest Puppet Enterprise version
• Custom Consulting – Adapts Puppet‘s services to client environment to improve release management
• Performance Optimization – Provides visibility into how existing deployment can work better Despite this orientation, there is a self-service component. The company’s website offers self-paced online training on its products. It also features a “Resources“ section that includes white papers, analyst reports, case studies, data sheets, eBooks, solution briefs, infographics, webinars, videos, and podcasts.

It also features a “Knowledge Base“ that provides answers to common questions and provides access to a monthly newletter. There is also a community element in the form of a forum and Puppet User Groups, which enable customers to meet up in person.

Key Activities

Puppet’s business model entails designing and developing its software products for customers.

Key Partners

Puppet maintains the following types of partnerships:

• Channel Partners – The company works with firms that resell its products as part of a complete software or IT solution in order to extend its reach. It provides them with training and sales/marketing support. Specific partners include Shadow-Soft, Kovarus, Ahead, and Amazic.
• Service Delivery Partners – The company works with service providers that help customers deploy and maintain Puppet Enterprise. They are certified experts in Puppet products. Specific partners include OnyxPoint, Shadow-Soft, ServiceRocket, and example42.
• Authorized Training Partners – The company works with firms that help deliver training courses on its products at designated locations worldwide. Specific partners include OlinData, Instruct, and JTP.
• Technology Alliances – The company works with hardware and software vendors to build joint solutions in order to provide enhanced offerings for their customer bases. Specific partners include Microsoft, Cisco, EMC Corporation, and Huawei. ### Key Resources

Puppet’s main resources are its human resources, who include the engineers that design and develop its products, the sales employees who promote them, the training/consulting staff members who provide instruction/advisory services, and the customer service personnel that provide support.

It has relied heavily on funding from outside parties, raising $85.5 million from eight investors as of January 2016.

Cost Structure

Puppet has a value-driven cost structure, aiming to provide a premium proposition through significant personal service and frequent service enhancements. Its biggest cost driver is likely cost of services, a variable expense.

Other major drivers are in the areas of sales/marketing and customer support/operations, both fixed costs.

Revenue Streams

Puppet has two revenue streams: revenues it generates from the sale of its products and revenues it generates from the sale of its services (training, consulting, etc.).