What will drive your cloud business?
Richard Davies gives his spin on the cloud sell
Analysts have predicted strong growth in the IaaS market and in cloud computing generally. But for channel companies to really start making money from cloud services, they have to find a role in an area that has traditionally been sold direct.
The traditional channel supported customers that had to continuously spend money on IT infrastructure. With the advent of cloud, this model will soon become a thing of the past and cloud services will increasingly be offered instead of physical hardware.
Cloud services can be used on a pay-as-you-go basis and are inherently more adaptable to changing business demands.
The ultimate aim is to offer companies IT as a utility that just works when required. Businesses might want this functionality but do not understand how it can be achieved. The channel must therefore advise customers of all sizes on cloud implementation, and have the knowledge and products to do this.
Customers that have already invested substantially in new technology may be reluctant to move all their in-house infrastructures to the cloud right now, but this could all change in two years. So offer cloud today as part of a hybrid model as a try-before-you-buy-approach that can demonstrate the benefits of cloud and instil decision makers with the confidence to buy in future.
You can also bundle cloud with existing offerings. For example, along with offering a business application, you can offer the hosting capacity to run the application in the cloud, without being limited by hardware spend. This should prove a key point for enterprise customers.
SMBs account for a large proportion of the economy, and are set to become cloud evangelists in coming years. These companies are not as dependent on legacy infrastructure as enterprise customers, so I think they will be much more open to the idea of investing in cloud services.
Paying as they go can allow SMBs to punch above their weight by hosting websites with greater functionality and running large applications, and doing other things for which they previously would not have had the resources. They also want a service that works straight out of the box.
If SMBs want more advanced features on top of basic cloud services, offer them managed services. For example, on top of cloud hosting of applications, a reseller might offer off-site monitoring and maintenance of the customer's systems.
The next challenge is to build a profitable cloud resale business given that cloud products have traditionally been sold direct, on the web. There are two good options here for the channel.
In some cases a reseller will add sufficient value through services. VARs can also offer white-labelled cloud services in a bid to secure long-term customer relationships. Customers may use the cloud service directly, but the reseller still owns the customer relationship for sales and support and can earn recurring revenue, which may rise as the customer increases its use of the service over time.
Cloud is not only the future, but presents a wide range of new sales opportunities that can be exciting and lucrative for the channel if approached in the right way. However, it is important that resellers first understand the drivers, the customers and the tools available to make the most of it.
Richard Davies is chief executive of ElasticHosts