How to Integrate Cloud Revenue Into Your Business

By Rob Carter, Windstream, for, CRN July 06, 2012

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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.