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Customers are embracing recurring revenue cloud computing services at a breakneck pace.
That was the word from hundreds of partners and vendor executives attending the three-day XChange 2012 conference billed as “Channel Without Limits” at the Gaylord Texan this week in Dallas, Texas.
[Related: CRN's Exclusive Coverage Of XChange 2012]
“Cloud services’ demand is exploding,” said Andrew Pryfogle, senior vice president and general manager of cloud services for Intelisys, a master agency distributor of cloud and telecom services working with solution providers. “Customers are sick of writing checks and continuing to invest in on-premise boxes and professional services under the old IT [information technology] model.”
Intelisys’ solution providers are seeing as many as five deals a day driven by customers frustrated with the high cost and complexity of antiquated on-premise IT solutions, said Pryfogle.
One example, said Pryfogle, is SolutionSet, a digital consultancy in San Francisco with 1,500 users at 17 locations, that moved from an on-premise call manager product to a cloud-hosted VoIP solution from iCore at a big cost savings for the customer and a robust recurring revenue stream for Intelisys partner FusionStorm, a national solution provider headquartered in San Francisco, Calif.
“The economics of the old solution didn’t make sense anymore,” said Pryfogle. “They were growing too fast, and it was too difficult to maintain the on-premise solution. They wanted to do it in the cloud.”
Axciss Solutions, a Groveland, Fla., solution provider, has in the last year driven its recurring revenue cloud computing services business from 20 percent of sales to 85 percent of sales with about 1,500 customer seats now operating completely in the cloud, said Axciss CEO Michael Coburn.