Reseller Ancoris made a decision in 2010 it now claims brought about success it would never have otherwise achieved. After two years of dipping its toe into cloud services, the firm decided to ditch traditional business and go all in on cloud.
Now the company is a Premier Google For Work partner which is fast approaching the £5m sales mark and employs about 35 staff. Although the company has traditional roots, starting up in 2003 as a Microsoft security partner, it credits its move to become a Born in the Cloud partner with the success it enjoys today.
Chief executive David McLeman explained that the decision to move to become cloud-only was not taken lightly.
"In 2008 we suddenly realised the traditional model was going to change and that cloud was going to become really, really important," he said. "That's the point when we said we would really get into that space."
But instead of ditching its traditional ways straight away, it began a two-year journey discovering the "art of the possible" with cloud, McLeman said, explaining that the process involved swotting up on the tech and gauging customers' interest and requirements.
The process was as enlightening as it was difficult – balancing its new cloud focus with its bread-and-butter traditional deals. This, McLeman said, prompted the big decision.
"We realised it is really difficult to do both," he said. "We were reborn in the cloud – that's exactly it. The challenge is transitioning from a legacy model – where you've got a business model driven by capital investment by customers, rather than subscription – is very different commercially and in terms of ethos and the way you engage with your customers. That's a really big challenge of the IT industry."
With the benefit of hindsight, McLeman is certain that his company would "absolutely not" have been as successful today if it had decided to stick to selling cloud and traditional technology.
"We couldn't have achieved what we have achieved if we carried on doing both," he said.
But at the time, although it was certain cloud technology had a future, it was a daunting period.
"In 2010 we just said ‘that's it'," he said. "During that period we had a legacy business which effectively fell off a cliff, and a cloud business which grew very rapidly. We're now on our ninth successful year of cloud growth and we had a very good year last year – we grew our overall business (including contract renewals) by 39 per cent. New business grew by 55 per cent last year. That's because we had this team who are completely in the zone on cloud. During the transition period it was hard to manage – there was always a big legacy deal which came along which made you [panic]."
As a number of larger resellers and vendors move to cloud, many face the challenge of how to bring their top sales staff with them. Cloud-focused compensation plans can appear less attractive to sales veterans who are used to cashing in on big, one-off deals.
This, McLeman said, is one of the key benefits of being focused on only cloud tech.
"This is the main reason Born in the Cloud companies have the focus they do," he said. "The revenue dip you have to take in doing that is something neither salespeople nor businesses can stomach. The way we are starting to see that evolve is the bigger organisations are starting to set up cloud-targeted business units.
"I think all the traditional companies are completely hamstrung, not just at a salesperson level, but if you're running the business. It is very hard to make that decision."
This article forms part of CRN's Born in the Cloud series, which puts the spotlight on resellers that focus solely on selling cloud services. If you describe your company as a Born in the Cloud partner and you would like to take part in the series, please email [email protected].
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