How to Integrate Cloud Revenue Into Your Business6:05 PM EST Fri. Jul. 06, 2012
IT professionals think of the cloud for outsourcing and hosted solutions, which can help customers cut expenditures and become more efficient. Here, Rob Carter, Product Director of Cloud and Data Center Solutions at Windstream, shares tips for generating cloud computing solution sales.—Jennifer Bosavage, editor
For those with vision, the cloud has continued to deliver exciting possibilities. Certainly with its promises to save costs, free up resources, and improve workplace efficiency, the cloud has changed both the way we see things in IT, and the way we think.
Countless surveys have shown that the cloud is the top IT priority for many CIOs, and according to Gartner, at year-end 2016, more than 50 percent of Global 1000 companies will have stored customer-sensitive data in the public cloud.
The idea that IT no longer owns its equipment has sparked some concern over information security and can be unnerving. However, savvy IT professionals equate the cloud to outsourcing and hosted solutions, which once represented major shifts in how IT works, but they are now highly accepted and adopted practices.
Today, many CIOs are left to decide how much of their environment they want to manage and how much they are willing to entrust to others. Decisions they make are driven by the value that cloud solutions provide, for example:
• No CAPEX costs and fixed OPEX costs
• The ability to scale one’s infrastructure to quickly meet changing requirements—allowing one to focus on core competencies
• The promise of automation, speed to market, and rapid provisioning
• Better visibility and cost allocation to reduce costs and improve cash flow
• Increased employee productivity
A Change in Channels
As technology leaders, you want to bring better solutions to your customers, avoid client churn, and continue growing your own business. To do that, you need to follow and adapt to the trends in the market. According to UBM [Ed. note: United Business Media is the parent company of CRN], 37 percent of all IT spend will be off-premise in 2013, and there will also be an 11 percent decline in CPE sales next year. For those reasons, it is critical that channel partners be able to sell solutions and integrate them with the cloud ecosystem.
With this new paradigm, you will need to secure monthly recurring revenue streams rather than one-time contract fees (depending on the plan of the provider with which you are dealing). This means crafting a new kind of contract and Service Level Agreement (SLA) that is based on customer usage and revenue.
Seeing the trends, the hardware manufacturers are now scrambling to adjust. Every major IT hardware manufacturer has created, or is trying to create a successful service provider program due to the shift in the way traditional enterprises are thinking and buying. The intent is to compensate their sales force on solutions sold on service provider cloud or hosted offerings that utilize their hardware, rather than a large, one-time sale to the enterprise. You need to take the evolutionary approach and adapt your business or be at risk of hanging onto declining revenue streams.
It is very important to understand how to position cloud solutions against client requirements so you understand what technology partners to bring in, and what role you will play as an integrator of the required solutions. Be abreast of cloud service provider infrastructures and look to customer needs. Since this is new and dynamic territory, often customers lack the technology, skills, and/or time to make the change themselves.
Next page: How to find cloud computing customers
When prospecting for cloud services customers, make sure to understand: • The type of information being stored, the performance requirements, and how the applications are being accessed? Is a public cloud (multi-tenant) sufficient or will hybrid or private environments be needed?
• Customer needs. For example, is customization required or can you use a more “out-of-the-box” approach?
• The types of SLAs required for customers to run their business and the ones that their customers require?
• The features that customers are looking to use now, and more importantly as they scale?
As a new breed of IT service provider, you must serve as the liaison between the providers of cloud services and the companies that need them, understanding the differences between a marketing or meaningful SLA. There are many providers that are happy to pay a credit and move on when issues arise. Many customers can accept this model, others cannot.
In this role, you need to understand the differences between offerings and ensure the client understands what he or she is paying for. If the client requires maximum uptime, then look to providers that offer enterprise clouds and SLAs that are meaningful, typically using the name brand providers (e.g., VMware, Cisco, EMC, and NetApp), resulting in a higher price tag due to measurable high-availability features and performance.
If the client has lower tiers of applications, higher risk tolerance, or a budget that will not support enterprise cloud, then look to open-source or smaller providers to meet this need. Criteria for this type of evaluation will include Key Performance Indicators tied to performance, scalability, quality, and cost.
Starting the Cloud Conversation
According to a 2011 Forrester Research survey of data center decision makers, about two-thirds of those surveyed said they “considered Disaster Recovery to be of high or critical importance in the decision to adopt cloud services.”
Disaster Recovery as a Service (DRaaS)—or DR in the cloud—helps companies surmount the significant roadblocks to “do it yourself” implementation, including high CAPEX costs, limited personnel for adequate service management, and concerns about security.
Many companies don’t have comprehensive and tested disaster recovery plans; however, the need is both present and urgent in our “always on” era. The truth is that disaster recovery was just too expensive to justify for many companies due to the true cost to actually meet the recovery time and point objectives (RTO/RPO). Many check the box and fragmented solutions exist within client budgets today.
As a service provider, you have an opportunity to engage your customers in conversation about disaster recovery and business continuity, bringing these points to the forefront to help them solve a business challenge, as well as solidify your position as a trusted cloud advisor. You will often find that clients will open up more when discussing disaster recovery because they need the help in this area, and through these conversations, you’ll learn more about their business as a whole.
Businesses of all sizes today report an increased need for enhanced disaster recovery plans that offer swift and proven recovery when a disaster strikes. Another survey by the Aberdeen Group about IT Disaster Recovery trends compared cloud users and non-cloud users and revealed that mid-sized companies ($50 million to $1 billion of yearly revenue) were the largest group to adopt the cloud for data storage, accounting for 48 percent of the cloud users surveyed. Small companies followed at 38 percent and large companies at 26 percent.
To meet the demand for cost-effective, scalable DR solutions, technology providers are beginning to offer DRaaS solutions that combine the best of replication and cloud technologies, and offering a fully hosted and managed disaster recovery solution that:
• Fully manages cloud-based recovery service • Helps companies continue operations during disasters • Is a fraction of the cost of self-management • Speeds recovery time after disasters
A managed disaster recovery solution in the cloud can deliver protection that is better, cheaper, and faster than internal solutions. A DRaaS solution also reduces the burden of infrastructure tasks and expertise during the testing or real-world enactment of disaster recovery plans on businesses. With access to these types of solutions, paired with your solutions overlays, you can help foster better business continuity for your customers.
The question, “What is the role for the channel in the cloud?” has never been more relevant. As technology solutions providers, you have access to resources—people and technology—that can help lead customers through the cloud-adoption process. You will be successful in this new era as a cloud liaison if you align yourself early with technology partners with the strongest product sets and who can support you with seasoned bench strength along the way.