XChange Latin America: 8 Tips To Jump-Start Your Cloud Journey12:00 PM EST Sat. Aug. 25, 2012
While IT spending is flat, cloud spending is expected to double in just four years, according to research firm IDC. Therefore, the time is now to think about how you are going to transition some of your business to the cloud. At XChange Latin America, two keynote speakers offered solution providers some very tactical advice on how to think about cloud offerings, how to transition to this model and how to package services to take advantage of the platform.
For those that make the transition within the first year, expect to see a 5 percent to 15 percent increase in revenue, 28 percent more customers and 40 percent to 50 percent margins derived from these services, according to research provided at the show.
Here are eight tips to help you get started on the cloud journey.
Are you a hardware reseller, do you build out infrastructures? Do you have a particular technical expertise? Are you a solution provider that offers managed services to your clients or do you develop software? Once you realistically determine your business model, you can then start to think about the best additional cloud packages to wrap around it, explained Ulises Aguilar (pictured) of MReady.
Do an assessment of your on-premise business and then figure out how to sell more advanced services around that business. And develop packages such as the "good, better, best," said Ray Mota, managing partner at ACG Research. A few services that could get a VAR started might include helping an organization catalog and map what is already being done in the cloud, said Mota.
One of the first things to consider is how quickly the market is maturing and how quickly you are going to enter the market. Once you determine the business conditions, you need to think about how quickly you want to move.
What are your strengths, and how do you differentiate your company? Even more important, you need to dig deep and be honest about what needs to change in your organization for you to successfully move to the cloud. Do you have access to the right customers, such as line of business? Do you have the operational capacity and technical knowledge to sell these services?
There are many business essentials that need to be in place, according to MReady's Aguilar. First, you need to assign an executive the responsibility to grow your cloud business. Then you must review your value proposition and core competencies and map them to what you want to do in the cloud.
You also need to complete a financial model and business plan for your cloud offering and create a prepackaged template of offerings, as well as train your resources to work with the cloud architectures so they know how to implement and how to develop on top of the cloud.
Finally, you need to market your services once you have your cloud offerings. In particular, make sure your website prominently reflects your new focus on the cloud and notify your customers or prospects about your new services.
As customers are now both line-of-business and technical buyers you need to understand your customers' business needs and solve a business problem. When presenting yourself, don't get caught in tactical. Companies still need managed routers or managed VPNs, but you need to address their business problem and why these services would make sense, said ACG Research's Mota.
You also need to understand that processes are different with the cloud. You will need to shorten your sales cycle from eight to 11 weeks to four weeks, said MReady's Aguilar.
A down economy is a great opportunity for the channel as companies focus on the economics and typically outsource more. And don't hold off on unveiling new services. Amazon unveiled EC2 during the down economy and the iPhone was rolled out during tough economic times, said Mota. Both offered something no one else had, he said.
Are you accelerating the time to revenue for that customer? Understand the customer's business and don’t lead with the technology. Ask the question, 'What are the operational requirements that are needed?' because this turns it into a service sale, explained Mota.
Many VARs make the mistake of selling to the wrong guy and positioning it as an operational cost savings. Mota said to position the offering as "effectiveness," which is revenue divided by capex plus opex. What's more, CEOs think about employee productivity rather than individual devices, so price per employee, he said.