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MAKING THE BIG INVESTMENT
For its part, GreenPages -- No. 153 on CRN's Solution Provider 500 with $110 million in annual sales -- was shifting to the cloud model when many colleagues and even customers were skeptical. In fact, the Kittery, Maine-based company began advocating that customers move aggressively to a cloud infrastructure back in 2008 and has invested millions of dollars of its own capital on developing its own unique intellectual property -- GreenPages Cloud Management as a Service (CMaaS).
That intellectual property and the ability to innovate with software and services offerings -- better yet Software-as-a-Service -- is the most critical factor in the success or failure in the cloud computing era, experts say. What's more, that unique solution provider intellectual property is absolutely the No. 1 factor in driving a high valuation. The cloud computing era has hit solution provider valuations hard; once-highly-valued solution provider businesses are now selling for about 20 percent of sales (see related story).
Dupler has made the GreenPages CMaaS product the centerpiece of an ambitious five-year plan to build a $300 million business. He forecasts CMaaS will grow at an astronomical 857 percent rate over the next five years. That is expected to drive GreenPages annuity-based services from just $7 million today to $60 million in 2018.
"Our professional services are growing significantly over that time as well because what we see is tremendous appetite for customers that need planning and integration services to create private and hybrid cloud platforms," said Dupler. "Our product sales we are actually keeping relatively flat through that period of time. There is product that is part of this transformation but, by and large, on a long-term basis, we believe product sales are going to start tailing off for people in the solution provider community."
The thought of on-premise product sales tailing off would be heresy for solution providers that rode the reseller revolution in the latter half of the 20th century with PCs, local area networks and client/server computing and then the Internet revolution, which initially resulted in a huge on-premise infrastructure build-out. Dupler said he doesn't see product sales ever going away, but make no mistake about it: The future for GreenPages and other partners is a services-led business. "We are not looking to get out of the product business," said Dupler. "But we have to be and want to be a thriving, profitable business with zero product sales."
For GreenPages, the future lies not in any vendor product offering but in its own unique CMaaS concept of planning, building, running and governing IT in a cloud world "The solution provider channel for many years has made its money off of the fact that infrastructure fundamentally doesn't work very well," added Dupler. "It used to be all about architecting and integrating physical technologies and software platforms to support the apps and data that add value to the business. In the cloud world, it is about integrating service platforms as opposed to physical technologies."
Dupler said far too many of his colleagues are hanging on to the past. Worse, he said, they are selling solutions to customers that put profits in their own pockets at the customers' expense. "The biggest mistake I see right now is people continuing to evangelize solutions to customers that aren't necessarily right by the customer, but conform to what partners know and drive the most profit for their organizations," he said.
"Short-term gain isn't going to drive long-term customer value," Dupler added. "We need to lead the customers forward through this transformation as opposed to perpetuating the past."