Microsoft Corporation (MSFT) Earnings Call Transcript & Summary

Welcome to Outperform 2020, coming to you virtually from our PROS headquarters in Houston, Texas. I'm Elaine Hampton, a member of the PROS acceleration team. And I, along with all of us at PROS, I'm so happy you are here. You've been listening to our very own PROS band, The Profit, while we wait for over 3,400 of you from around the world to log in to our virtual environment. Aren't they great? You know who else is great? Our sponsors. A big thank you to our marquee sponsor, Microsoft, along with our other sponsors, Accenture, Adobe, BillingPlatform, EY, IBM, Icertis, LTI, RateGain, Simon Kucher Partners, Travel in Motion and ZS. We appreciate your partnership. In addition to The Profit, over the course of the event, you will hear from industry analysts and PROS customers that are leading the way in digital transformation as well as our very own strategists and scientists. Throughout Outperform, I'll be joined by my colleagues, Loretta Faluade, Valerie Howard and Aditi Mehta, Solution Strategy Directors here at PROS, to introduce you to our phenomenal speakers and our immersive sessions that will provide you insight into what the road ahead looks like for pricing, selling, revenue management and e-commerce. And when you are not listening to a session, check out the Virtual Innovation Center, where we will be showcasing our PROS platform demos and our partner solutions, or stop by the lounge for networking opportunities with fellow attendees. There is so much to do in our virtual hub. If you haven't already, click on the virtual tour from the lobby screen to be sure to make the most of your experience. Now before we begin, please take a moment to review our forward-looking statements. And now it's time to kick off Outperform 2020. So without further ado, ladies and gentlemen, welcome PROS President and Chief Executive Officer, Andres Reiner.

Thank you, Elaine. Hello, and welcome to Outperform 2020. I would like to start by thanking all of our customers and partners for your amazing support of PROS. I love having so many of you from around the world with us here virtually. Let's take a look at who's joining us. We have over 3,400 registrants representing nearly 90 countries, 29 industries and over 800 companies generating $4.7 trillion in revenues. What an incredibly diverse group. We're excited to share what's new with PROS over the next few days. I'll start by sharing some incredible new innovations. Innovation is core to who we are. We've always innovated ahead of the market to ensure you have the technology you need to compete and win. We're excited to showcase amazing new innovations with over 400 new features to help you win in the digital era. We're showcasing our next-generation user experience with over 130 reimagined screens and workflows based on the UX research project that included over 1,000 of our users. I wanted to take a moment to thank all the amazing customers who participated in this UX research project, which was our largest ever. We're also launching our next-generation dynamic pricing for digital commerce which is going to revolutionize omnichannel commerce for B2B and B2B2C. I'm also super excited to launch our partnership with Adobe and our new Magento accelerator, which will bring the power of PROS omnichannel commerce to all Magento customers around the world. We're also launching the next-generation dynamic pricing for airlines, which now supports a class-free world, which is another first in the industry for PROS. We're also excited to share these with you as we're laser-focused on innovating in areas that will help you win today. So now let's take a moment to reflect on 2020. 2020 is not the year that any of us planned for. It's a year that's been hard at a personal level for us or families or people and our customers. It has stretched us in many ways. And it's given us the opportunity to grow as people, companies and as a society. We're also committed to supporting our customers, whether you're thriving or recovering. We have seen customers come back strong through difficult times. And just as in the past, we're going to emerge stronger together. This disruption is challenging all of us to rethink what's possible and we have to lean into them. Let's take a moment to see how this disruption creates an opportunity. Let's put in perspective one data point. U.S. e-commerce penetration went from 16% at the end of 2019 to 33% in April of 2020. Think about that for a moment. We shifted more in 3 months than we did in the last decade. Data point #2. We recently partnered with Hanover Research to survey B2B buyers. We found a number of buyers doing the majority of their purchases through digital self-serve channels rose from 28% last year to 40% today. We have seen years of digital selling acceleration happen in months. And finally, what are we seeing among our very own customers? Take Saint-Gobain Glass as an example. Pre COVID, 10% of their sales went through e-commerce. Post-COVID, 80% of their sales are going through e-commerce, powered by PROS Smart CPQ. That's an incredible shift, a transformation that we, frankly, probably wouldn't have thought it was possible. And a shift that creates an incredible opportunity for us to gain share if we embrace the self-serve imperative. So what is this self-serve imperative? It's about meeting buyers where and how they want to buy. And our own personal experience are shaping how we want to buy. This bar is raising every day, and whether you're B2B or B2C, if you're not leaning into self-serve, you're at risk. We're into an era where the expectation is that companies are self-serve first. Let's talk to 2 tech visionaries about what they're seeing in the market. Now I'd like to welcome Peter Sheldon from Adobe and Jacky Wright from Microsoft. Great to have you here at Outperform. Thank you for the amazing partnership and for being here with us today. I'd like to start if you could each briefly introduce yourselves, your role within your company and tell us a little bit about you. Peter, do you want to start?

Sure. So Peter Sheldon, I am the Senior Director of Commerce Strategy at Adobe. So my role is really helping Adobe with understanding where is commerce going. I guess, at a very forward-looking view into sort of 2025, 2030, to say how is commerce going to evolve in terms of the way that buyers will interact, the automation that will drive those experiences, et cetera. And I think it's been a very fascinating time, especially with all that's happened with COVID because a lot of those sort of predictions and visions of how we saw it evolving are really coming through faster than we had previously predicted. Sort of that's my role at Adobe. I've been in the commerce space for many, many years, having previously been an analyst at Forrester Research where I covered the commerce technology space.

That's great. Jacky, do you want to briefly introduce yourself?

Yes. Thanks for having me. So I'm Jacky Wright. I am the Chief Digital Officer for Microsoft's U.S. business. And when you think about my role, it is kind of twofold. One is to enable the sales force to sell digitally, transforming our customers in their outcomes. And the second piece is to build deep market-making capabilities for our customers through transformation.

That's great. So what are both of you seeing today in the market? I talked a little bit about how we've seen an acceleration of movement into digital. We've seen it in B2C, we're seeing in B2B. I'm curious to see, what are you seeing?

Yes. I mean I think on the Adobe side, you hit the nail on the head, it's this word acceleration. We've seen both existing customers as well as prospects really sort of change their priority as it relates to digital transformation, especially as it relates to commerce projects, we've seen investments in commerce technology be really sort of move to very much to sort of the top of the priority list, especially as it relates to CapEx investment. And I think one of the biggest themes that we've seen from our prospects and customers is a real focus now on how do we get this done quickly, we can't procrastinate. We notice there's this sort of acceptance now that digital transactions, it's not just a future, it's the now, whereas before perhaps it was the future. So sort of how do you accelerate moving the future to now and sort of everyone -- I use the word scrambling a little bit to say how do we kind of realize our vision as soon as possible.

And I'd like to add to what Peter said. I mean the whole notion of accelerating through digital is the way, right? So you want to be digitally first. And I think when you think about where companies are going, there have been some that have been on this journey. I mean you can look in the banking industry where the change in customer behavior, contact-free and the expectations have changed the way banking works. And so that has not only now just accelerated due to changing things such as the pandemic that has caused interrupted supply chain, this whole notion of contact-free is now in a whole new way, and so forcing companies to now think about how to do it in an accelerated way.

Yes. And as you talked about, this buyer expectation has changed dramatically if we think about both B2B and B2C. And what's your notion? Typically, B2B and B2C believe they're very different. What's your perspective on that?

I think my perspective is that was definitely the notion in the past. I think they're now starting to realize, especially on the B2B side, that they're not as different as they thought they were. Yes, there's always nuances. Yes, there's always complexities. And perhaps the actual end part of that customer buying journey is a little more complex. But if you look more sort of the upfront of that customer buying journey, I think most B2B firms are realizing that they need to take a page out of Amazon's playbook and recognized that a lot of their buyers -- their customers today are millennials and those millennials are absolutely not just used to a B2C buying experience, but they absolutely demand it. They expect it to be mobile only, mobile first. They expect it to be fast, intuitive and 100% digital. And I think the B2B firms are sort of finally waking up to that, that some of their legacy processes and old ways of doing things just don't resonate anymore.

And to your point, Peter, I mean, that was the case. People were recognizing that. But this convergence of millennials in their changing behavior and patterns in now digitally selling with an Alibaba, as an example, when you look at that and you think about the whole supply chain, the whole supply chain now has to be closer to the customer. So whether you're doing a config, price quote so that you get the price immediately [Audio Gap] end of your supply chain, everything now has to be digitally enabled.

Yes. Absolutely. Why do you all think? So it seems pretty obvious that the world is moving to digital. It seems pretty obvious. Both our B2B data and our B2C data shows that customers want to buy in a self-serve model. So why haven't more companies, especially in B2B, embraced this new digital-first self-serve model? What's holding them back?

So I would say there are a couple of things, and Peter, feel free to add in. I think there's an element of culture. And so when you think about the culture in a typical organization, you've got everything from a zoomer to a boomer in there and how a company engenders the ability to understand and think differently hinges on everybody participating. And so the culture of the organization is a big one. I also think it's how you think about moving to digital in an accelerated way. And if you have the legacy systems in your environment, that ability to move fast is hindered. And so you need to think about how can I -- how can I move in an accelerated pace and at the same time look at my infrastructure and what I have there to be able to do that? Peter, I don't know if you agree with me.

No, no, 100%. And I think the only thing that I would add to that is it's not just sort of the culture and some of the technology constraints, but I also think that sometimes digital in the past has been perceived as a threat, as an internal threat. So I'm talking specifically about channel conflict. We've got people in the sales organization that say, "Hey, well, digital is going to be the place that all of our customers are going to place their orders, what does that mean for my field and all my sellers?" And I think for a lot of manufacturers that obviously traditionally have had a distribution channel to sort of feel we're selling direct now and we're selling through digital tools, what does that mean if 98% of our sales comes from our distributors? So there's always been a sort of channel conflict here in the past that I think hasn't necessarily stopped firms from experimenting and doing POCs and sort of experimenting with digital, but they've never had that confidence to sort of dive in the deep end. And I think what COVID has done is really sort of change that mindset and said, look, it's do or die now. We have to jump in the deep end, and we have to accept the reality that, yes, this may create some channel conflict, but we're going to have to face that head on there.

And at the end, do you think, Peter and Jacky, it's really not just about the channel conflicts, it's really about the end customer experience and that customers may traverse different channels and how is that playing? If you're not there, if you're not accessible in a digital channel, you may not be able to sell your products. You may not be able to capitalize on the market opportunity. How is that -- how are companies thinking beyond that? And then potentially this shift of both B2B and B2B companies becoming B2C and direct-to-consumers as potential models that they apply to ensure they're relevant within the market.

I mean I think we certainly see a lot of B2B firms now seriously looking at a sort of direct-to-consumer model and saying, how do we -- the best way to sort of understand what the sort of modern consumer wants from that digital experience is to have a sort of direct relationship with them and sell directly to them. And so in that mindset, I think a lot of them are experimenting with new brands, new direct-to-consumer product lines. And they're doing that really to sort of try and understand this brave new world and to build that sort of direct relationship with the customer, to get all the analytics from the customers' buying behavior and institute that back into their product works to actually help them sort of accelerate the evolution of the product. And they're really realizing that there is a huge amount of benefit that they can realize by having that direct-to-consumer, not just selling model, but that sort of digital engagement. So yes, I mean, there's definitely a newfound sort of sense of enthusiasm for at least experimenting with the direct-to-consumer model.

Yes, and I would characterize it as meeting the customer where they are. So when you think about the virtual experience and what a -- how a customer buys today, it is changing. So you're only as good as meeting the customer where they are.

Yes, I love that. It's absolutely right. It's being where the customer is, when their buying journey begins and helping to support them. So how do you all recommend for companies to get started? Because I know some companies struggle with how to get started in this movement. Based on your experiences, how do you recommend them to get started?

So I would first start out by saying that every cloud company needs to see themself as a digital company. Because if they don't start with that mindset in mind, they will be irrelevant. And so this notion of digitally first in how you think, how you work, how your supply chain works, that is first all about mindset. And then when you move from mindset to actually doing POCs and really driving not just new product integration -- new product introduction, but also thinking about your whole supply chain, it's how do you make sure you get the right people involved and engaged, inclusive, to be able to think differently about doing that.

That's great. Yes, Peter?

The only follow-up I was going to sort of add to that was, I think, again, it's a very tight market. I think firms are realizing that, hey, you've got to dive in to deep end. We just got to try this. So let's not do sort of a 2-year implementation project what can we get live in 2 months. How can we find a product line, a channel? How can we digitize and get learning? So it's all about sort of let's get you on the ground. Maybe some of this is new to them, but it's like, hey, we just got to embrace, and let's get out there on the front lines and see what this means to our business.

Yes. And I believe all of us have been innovating to help companies drive this fast time to value and allow them to get started quickly. I mentioned in my opening about our new Magento accelerator that we just launched, and I'm excited about that to really be able to power these real-time pricing capabilities to all B2B sales opportunities and be able to drive a fast time to value, I think, which is critical to win. In terms of the future, we're barely scratching the surface of what digital can do to help transform sales. What do you think the future holds?

I think we'll see more automation in the sales process. I think with AI and machine learning, I think that vendors, manufacturers, distributors can get a lot smarter about not just sort of personalizing the buying experience, but really sort of making intelligent recommendations to the buyers and maybe even predicting what the buyers need and placing orders on their behalf, especially, again, as we get into sort of replenishables, consumable products, spare parts and really take that burden off the buyer because we automate that. So I think that's one area that we'll see sort of more automation in the buying process.

Yes. I would add that as you think about the ability to be agile, how does it change? I mean look at the pandemic and look at what it's done. Your whole supply chain has changed now, where you have to think about in region for region. How do I adjust? How can I predict and anticipate the things that are going to happen relative to customer buying behavior and the sales process? And I think the point about AI and using data and analytics to really anticipate, see around corners and help you be more agile, accelerate and create new products is the way.

Thank you very much, Jacky and Peter. It was amazing to have you here at Outperform 2020. We're excited to be showcasing our joint solutions in our virtual demos at Outperform 2020. And we look forward to continuing to innovate together to help our customers win in this digital area. I really appreciate it. We're very grateful for the amazing partnership. So thank you. Look forward to seeing you soon. What an incredible panel. It's clear that we have to win at self-serve and at PROS, our mission is to help people and companies outperform. We've innovated for decades to help companies compete and win in the digital era. So here's what we believe is needed to win in a self-serve world and how we've innovated to power self-serve commerce. We've innovated on products like a real-time pricing engine so that you can respond in real time and on demand. We've also innovated on solutions like our Smart CPQ in our travel retail platform as well as our deep AI capabilities that allow you to deliver extreme personalization at scale. And these solutions allow you to deliver a consistent omnichannel experience, whether it's online, partners, direct sellers or marketplaces. We enable you to deliver a digitally connected sales experience, all with our passion and commitment to helping you win in a self-serve world. I'm excited to welcome some of our amazing customers so they can share their journey on how they brought self-serve to their markets. I'd like to welcome Jennifer Dudley with HPE, Jody Fales with Anixter, Jochen Göttelmann with Lufthansa Cargo to share a little bit about their stories. Welcome. I'd like to first start with each of you sharing a little bit about your roles in your digital selling journey. Jen, would you like to start?

Yes, I'd be happy to, Andres. Thanks so much for the opportunity to be here and share a little bit about the work that we've been doing with PROS. So I am currently the leader of the processing capabilities at Hewlett Packard Enterprise within our configure, price and quoting organization. And the responsibilities there are really focused on taking our enterprise business, so servers, storage, networking, and being able to enable our sellers and channel partners to quote and delight -- delight customers. So the business that we've been managing with PROS is about 14 -- between $12 billion and $14 billion of revenue under management to date over a program that has spanned about 7 years so far. And the last frontier that we've been focused on recently in our engagement with PROS has been really enabling self-service for our selling teams.

That's awesome. Thank you, Jen. Jody, would you like to share a little bit about your organization and your role?

Absolutely. Thank you, Andres. So I'm Jody Fales. I have the privilege of leading our digital solutions team for Anixter, which is really about connecting our customers with all of our services and solutions inside the business through 3 primary areas. It's through our website capabilities, our integration capabilities on how we connect customers in ways that make sense to them to our business and through materials management solutions. And we've just seen a tremendous ramp-up over the last year and an acceleration in 2020 as customers are shifting and adopting these solutions.

That's awesome. Thank you, Jody. And Jochen, do you like to share a little bit...

Yes, I'm from Frankfurt in Germany. So I have the pleasure to oversee the IT department at Lufthansa Cargo. Lufthansa Cargo is the air freight division within Lufthansa Group. We are a group on our own with about 15 subsidiaries all across the world, and we take care about all the logistics business in Lufthansa. Lufthansa, as you probably know, consists of major France, like Lufthansa themselves, but also Swiss, Austrian and Brussels and a couple of further rather smaller European airlines. And our business model is basically a combination of freighters and the freight capacities of the planes. And at the moment, I am maybe dedicated to drive especially our sales IT into the next decade, so with the replacement of a couple of legacy systems, but also the introduction of major processes and innovations to digitalization of the air freight industry.

That's great, Jochen. Thanks for sharing. And we're proud of our incredible partnerships with HPE, Anixter and Lufthansa. Lufthansa spans over 30-year relationship. Excited to have all of you here today.

Jen, you have a pretty vast partner community. And I know you put a lot of effort in your organization on how you support them. How have you seen that changed today? And any potential changes in the future?

Yes, that's a good question. And just to follow up the previous comments, I think we have been on a transformation journey for several years now to really enable both our partner community, that consists of about 30,000 different partner users, who are engaging with us on pricing and quoting, and our own sales teams to really be able to realize the promise of faster and simpler quoting to deliver a real-time response back to customers. And I think in the current environment, we've been able to really realize the opportunities that the pandemic and some of the constraints with our competitors' supply chains and even our own have presented, by being able to bring back to that self-service quoting motion a real-time price that reflects the puts and takes from costs that we saw with components coming into Q2 and Q3 and to be able to really respond with a variety and an increased volume of quotes. We saw the number of quote records that were produced both by our channel partners in a self-service motion and sales in a self-service quoting motion really increase as businesses needed to react to the updated infrastructure needs in...

It's interesting, Jen, we've seen from many of our customers that really there's a lot of changes happening in parallel. Your costs are fluctuating. Your channel and your customer mix is also fluctuating. So being able to support this in real time is probably more critical than ever. There's a more change that's happening all at the same time and being able to adapt to that change quickly and in real time, it's clearly a must-have in this day and age.

That's absolutely right. And I think we're seeing with the sophistication of our pricing guidance and self-service quoting that we're really able to make those changes real time rather than having to wait until the first of the month or on a quarterly refresh.

Exactly. And Jochen, you focus on taking Lufthansa Cargo to the self-serve world. Do you want to talk a little bit about what changed in the market as you rolled out this new sales motion?

Yes. Actually, some people say that air freight is lagging maybe 2 decades behind the [indiscernible] business. This means people still love to bring out paper, attach it to the shipments. Our clients, our intermediaries or the freight forwarders, they still love to pick up the phone, asking our salespeople for a quote, asking the next seller for better quote, coming back to us a day later and finally negotiating over phone or even sending an e-mail if this can be price. And so people still -- sales in air freight is still a lot of people business, a lot of transactional business for -- with human involvement. And this, of course, changed quite a lot in the past month, when people were no longer able to meet in person but only to call or e-mail. And we see a rise in the more self-service-like transactional sales, be it with our direct website, direct bookings, without any involvement of human beings. Also, some platforms are coming up sort of like, say, Booking.com for air freight. And I would say it's a slow -- a slow trend towards more digital and more machine, machine interaction, which has been clearly and significantly sped up during the last month by the COVID-19 crisis.

That's great. And you see that playing a new role. As you look forward, how is this self-serve going to shape kind of the buyers' expectation and this need for kind of real-time, self-serve quoting?

Yes, the buyers want to have quote means the price offer which they can directly book. They do not want to wait for answering minutes or hours later through an e-mail or through a phone call. They want to have full transparency also with our competitors. And of course, they always want to have a good price in the sense of it should be fair, but also really price which suits them next to our capacities.

That makes total sense. And Jen, this area of real-time demand, buyers' expectation is something that you've seen at HPE. Do you want to share a little bit of -- have you -- what changes have you seen in this area? And how critical is it?

Yes. That's right. We are also seeing, certainly in a different industry, but a similar expectation from buyers that we're able to respond. I think our top customers tell us they expect a response from us in 2 or fewer days at least 80% of the time. And what that means from -- within HPE's configuration, pricing and quoting processes is that we had to really think about our strategy for meeting those expectations around a model that considers the low-touch versus high-touch pricing. And so consistent with the experience that we were talking about in terms of a low-touch experience, partners and sales reps on behalf of their customers expect that we can return back a price at which they can really win or at least make good progress on the negotiation in real time. And at HPE, we call that the instant price response. But we also recognize that for some of the largest and more strategic deals that further analysis and negotiation is necessary. And so for that, we reserve the capacity that we've been able to free up from the instant pricing or low-touch motion and use that really for a bid desk and into finance negotiation. And although that takes longer, we have a much richer set of analytics and a better starting point from that instant price than we had at the beginning of our transformation journey.

That's great. And Jody, I want to transition a little bit. Beyond thinking of your own e-commerce and self-serve, what about marketplaces? What's the critical role of digital marketplaces in the future?

Right. So marketplaces have been around for a while. And as the technology gets easier and cheaper, everybody is getting into the game. Suppliers are getting into marketplaces, our customers are establishing marketplaces, we're establishing marketplaces, right? So currently, today, Anixter is connected into more than 12 currently, that we offer the ability to see curated catalogs to provide pricing and inventory information for our customers to help them in the purchasing journey. So I just think it's going to be expanding more. And the key for us in the future is how do we stitch the value chain across the full supply chain and make it even easier and fuel it with more information and actionable information for customers to make better and better choices.

Yes. That makes total sense. And Jen, I wanted to cover an area. There's a lot of companies that worry that as you move to self-serve, it creates channel conflict. This is a very common topic. And I wanted to get your perspective since you're far along on this journey.

Yes. That's right. So this was, I would say, a concern at the beginning of our journey, and we've really worked with a process end-to-end that allows us to address that from the start. So our pricing guidance and self-service quoting is delivered through what we call an integrated quoting system. It really starts with the partners logging an opportunity in Salesforce.com, our CRM system. And then they can optionally register that opportunity as a new business benefit through a process that we refer to as deal reg. One of the benefits of that deal reg process for new business opportunities is the ability then to escalate for pricing, and I talked earlier about our low-touch and high-touch strategy. So we are willing to give an instant price to any partner who has access to the integrated quoting process. But we are only -- we're really differentiating that pricing then that we give once the deal has been registered, the partner is investing in that opportunity and we further differentiate the pricing that we offer through the escalated or high-touch process. And so really, a lot of those concerns that we may have had at the get-go have been relieved by the consistent execution of this process and, honestly, the transparency that we're bringing in the instant price delivery across all of our partner opportunities.

That's great, Jen. Thanks for sharing that. And Jochen, I wanted to -- you lead the cargo area, but I wanted to get your perspective. The Lufthansa Group has led the way in this area of self-serve on the passenger side as well. I wanted to get your perspective on any changes on the passenger side of the business.

Yes. We want to -- yes, this is a very, very good question. This is extremely important topic for our colleagues from the [indiscernible] business. So in some sense, we would like to regain the direct relation with our clients. So in the past years, we had a lot of travel agency online or established bonds or booking platforms stepping in between us and the clients. So we still, of course, know the name of the client, but we don't know anything about his personal preferences, about his potential for ancillary services set. And we would like to get the direct connect with the client back by incentivizing booking directly via our web page so that we directly can add additional services, sell better seats, sell better meals, whatever, and also really create a long-term relation with the client instead of just getting through transaction by transaction from the booking platform. It's also a question of cost, of course. We have seen the so-called GDS, Global Distributing Systems, adding pretty expensive fees on all the bookings, which is, again, a competitive advantage for us compared to low-cost airlines who never were sold with the GDS systems like our deals were sold. And they all do everything to regain the client relationship back from the platforms. But of course, it's a little bit tricky and sometimes even, say, a dangerous game because the platforms are not your enemy, they are sort of a sales channel, and you have to somehow find a good working mode with them, using them, but also not giving up the full relationship to them.

Yes. But you've innovated quite a bit on being able to support through your direct channels any marketplace, and as well on the group side has been another area that you've innovated. That traditionally was a high friction deal, desk-oriented, very typical B2B. And today, you can actually book a group of 40 people with the same passenger experience. So these have been areas that the Lufthansa Group has put a lot of emphasis on than customer experience and learning about their preferences, allowing them to do business the way they want to operate, which is great to see that leadership position. So now I'd like to talk a little bit about the role of the salesperson and how that's changing as we move -- we talked a little bit, everything is moving to self-serve and digital. So how is the role of the salesperson changing? And I thought, Jody, wanted to get your perspective on that.

That's a great question, Andres. I think it's part of the secret sauce, too, on how we're going to be successful with digitization. So when we think about serving customers, our lighthouse has always been technology when you want it, people when you need it. It's a digital-first approach. And we think of digital like a virtual assistant for the sales team. It isn't something to be feared or avoided, it's not going to take away your job, it's a tool that helps you be more efficient. So as we continue to expand our digital footprint throughout our business, we want to be able to continue to fuel our sales team with more and more transparency, more automation, connecting them to very actionable insight that, at the end of the day, enables a pivot and shift from administrative activities to more complex and rich discussions that really help solve customer problems. And we take away the burden of where is my order, what's the price of this individual piece.

Yes. It's really moving the role to be more strategic, more evangelist role of helping to support customers, but still allowing customers to move to digital. So in terms of -- as we roll out these capabilities, obviously, self-serve is better for the customer because they feel they're in control. How about the value side and the value measurement for your business? Is there anything you could share? I don't know, Jen, if you wanted to start.

Yes. So in order to understand the initial implementation and the potential for further deployment within HPE, we really started this journey with a pilot and control group, where we were able to measure the impact of what for us was a deal pricing optimization initiative. In that measurement, we were able to establish a 200 basis point improvement for the pilot group versus the control. And as we continued to expand our deployment, we were able to show that we were scaling that benefit. As we have made really the pricing guidance part of our -- of the way we run the business, of course, our pilot and control measure has gone away. But I think what we've seen most recently with self-service that's been so exciting for us is a strong correlation between a faster time to respond on quotes, what we call quote turnaround time, and our ability to win the business or our win rate. And where we look at a segment of the partner population, we see that when we can bring that turnaround time below 2 hours, which is really the window where our instant price plays, that we see approximately 1 percentage point of win rate improvement. So really tangible results from both...

Pretty significant. 1% improvement to win rate. And then you talked about 200 basis point on margin, that's pretty awesome. And Jody, anything you could share?

Sure. I think in terms of maybe 2 macro metrics for us. One is the ability to win business, right? I'm thinking broadly across all of our digital services. In Anixter, we have in excess of $1 billion of our business supported by one of our digital channels. You don't come to Anixter to buy digital, right? You don't come and say, "I'd like to purchase access to your website, please." Right? But it's removing the friction and making it simple, oftentimes offering custom solutions or tailored solutions at the customer's place of business that allows us to serve them in ways that differentiates us from the competition. So clearly, we're doing a good job on the revenue side. And from a -- we're going to retread this a little bit, but the productivity piece, the ability to, I'll call it manufacture head count, by taking self-service, giving it to the customer which adds value to them because they now have access 24 hours a day to all of the information, it takes the load off of our internal teams and allows us to pivot that to other value-added selling. We've manufactured, if you will, dozens and dozens of headcount through that capability. So we see value across the organization as we move to digital.

That's awesome. Jochen, I know your initiative is fairly early stage. Any early indicators on value that you believe this...

Yes, we know [Audio Gap] early start to understand much better the price sensitivity of a client, when -- will we lose transaction whenever we get the shipment. And this will be -- this is yet on the configuration and design, but this is a logical next step from learning on the price sensitivity of a client to the next step, which is then making better proposal or active proposals, not just waiting for him to call us or to ask for a quote, but offering spare capacity. Actually taking these demands, maybe we see clients who always have a couple of actually shipments over the weekend, and giving them proactive offer and then, finally, combining that also with the overall CRM process. And then it makes the full story from us, from pricing to active offering through the full client life cycle management of the CRM topic.

That's great. Thanks for sharing that. So as we try to close this conversation, I wanted to end on where do you see the future? Clearly, all of you are leading the way. But I wanted to get a glimpse of what you see the future evolving to. Maybe I'll start with you, Jen.

So I think we continue to look for ways to make this experience of quoting faster and simpler for our customers. And the next frontier for us in that journey is to deliver a mobile experience, to bring the pricing guidance and the insights that we have for demands during -- to a mobile device that can be used both by those who are already doing self-service today and also to reach a broader swathe of the sales teams that today may still be relying on inside sales reps to do some of the administrative work for them, really having that conversation in real time with the customer with a mobile device in their hands.

That's great. Jody, do you want to share a little bit about the future?

You bet. You bet. And I'm going to key up what Jen said about faster and simpler. For us, it's continuing the journey to get more personal and to remove the friction in the buying experience and finding opportunities, frankly, to solve customer problems, maybe in a more unique way. And for us, part of that is just providing greater transparency to the full supply chain. It isn't just about Anixter, it's our thousands of partners and how do we look like a much larger organization to our customers because, frankly, we have access to it. We just don't look that way when you come on to the site. So how do we give broader transparency throughout the cycle to the customer? And frankly, making it simpler. I mean how do we invoke more things like chatbots to give more Q&A with a customer versus going to a traditional website and clicking through pages as an example. So there's quite a few things we're looking at.

So we're just scratching the surface on what's possible in a digital world. It's great to see. Jochen, wanted to let you share anything as you're evolving your vision and your strategy?

Yes. An important aspect is indeed connectivity and transparency end to end. So we -- as a freight carrier, we only can transport from airport to airport. In the end, the client wants to have some shipments from his -- picked from his yard to the final consignee, but this involves much more [ priority ]. So it's all about connectivity, seamless connectivity, without a lot of data, but enriching data along the transport chain and giving the client transparency. And that has also given us take a little bit connectivity to the true shipper and not only to intermediaries. So it's all about connectivity and transparency in the supply chain, partly on the customer pricing and booking.

That is great. Thank you, all, Jen, Jody, Jochen, for the amazing partnership that we have. We're so grateful to you. You really push PROS to continue to innovate, and we're ecstatic to have you as amazing partners. Look forward to seeing you soon. Thank you for sharing your stories at Outperform. We're grateful. In closing, you have to embrace self-serve to win. If you've not started on this journey, consider today, right now, the first step. You've already started, let today be the moment you choose to accelerate. And use this event to give you the knowledge and solutions to embrace self-serve. Let's make 2020 the year the disruption creates an opportunity for all of us. Thank you to our amazing customers and partners for trusting us in this journey and have an amazing Outperform.

Thank you, Andres. Well, Outperform 2020 has officially begun. Join the conversation using #Outperform2020. And don't forget to stop by the lounge to meet and chat with your fellow attendees.