CSPs are missing out on the SMB opportunity

Gartner research director Mark Paine explains how communications providers can cash in on this end of the market

Communication services providers (CSPs) have strong customer relationships with SMEs and are therefore ideal intermediaries for providing cloud services to smaller businesses. Most CSPs, however, are not very successful at doing this. CSP business unit leaders must build a vision to sell cloud services; one that emphasises positive customer experiences and addresses SMB fears and requirements around cloud services.

CSPs are particularly suited to this role because they are owners of the network between the customer and the service and benefit from strong existing customer relationships. They own trusted local facilities and enjoy brand awareness. CSPs also have the advantage of an existing billing, sales and service infrastructure that can be leveraged and built on to deliver cloud services.

Given these advantages, you might think that the opportunity for CSPs to deliver intermediary services is something of a no-brainer. After all, by increasing traffic across the network, revenue should logically increase. However, this doesn't provide the differentiation that sets the CSP apart from other over-the-top providers that are, in some cases, way ahead in delivering cloud services.

So what can CSPs do to regain the upper hand?

1. Start with a vision based on customer service

To increase SMB adoption, CSPs have to begin with a vision of how the SMB customers' experience or business outcomes will be improved by the combination of the CSP's network and the technology provider's cloud services. This means starting with the business problems SMBs face, and developing solution stacks by vertical industry to solve those challenges.

Beyond delivering high-quality cloud services, CSPs need to formulate a strategy and ask themselves in which areas it is most difficult for SMBs to deliver improved business outcomes, and which routes to market will suit the way the SMB customer wants to buy. For example, running a business while on the road is a major concern for SMBs, so CSPs and their partners can offer cloud services to help with this.

2. Create an integral route-to-market approach

Taking a customer-centric approach to route-to-market planning ensures that the strategy meets the SMB's expectations and delivers on their priorities. This needs to take into account the customer's challenges, their purchasing preferences and their segment-specific technology needs to develop route-to-market options that include direct digital and indirect human routes.

3. Attract the right partners

Most CSPs tell us that they have had minor success in recruiting local service partners. To improve their track record, CSP business unit leaders responsible for channels need to develop specific value propositions that illustrate how partners can make money over and above the services they already provide.

The following steps can help CSP channel leaders create a proposition to recruit channel partners:

• Present the opportunity and vision - Many SMB service providers and trusted advisers are still trying to figure out what the cloud has to offer them. It is essential to explain where the partner can offer value-added services by illustrating the ongoing revenue opportunity throughout the customer life cycle and the potential to sell additional services.
• Explain how you will get them up and running — Acquiring the skills to become competent in migrating and managing customers' cloud services will be a chief concern for SMB channel partners. CSPs should ensure that training programmes are available online and through multiple delivery channels.
• Explain how you will work with them to create demand — Lead-generation strategies should be developed within the partner programme as part of the overall marketing effort.
• Give the partner an onboarding road map — Prospective partners will need to buy into the onboarding procedure, which will ideally be co-ordinated by a dedicated resource to help them through the process.

Mark Paine is research director in the Technology and Service Provider team at Gartner.