Riding The Cloud To Profit

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There is an old saying on Wall Street that "the trend is your friend." So if the market is trending down, play it to continue, and if it is
running up, play it as such.

The same holds true in high-tech marketing, and you need look no further than the rolling headlines on CRN.com to see the current trend surrounding cloud computing. Marketing is as much about talking the game as it is anything else. Is there a vendor that isn't talking cloud computing and the wonderful leadership they are bringing to the market?

Solution providers who have yet to do so should flip the switch on their managed services offerings and start calling them cloud solutions. For solution providers, managed services has been an actionable strategy for a number of years now, and it's often easy to position those capabilities as cloud offerings while you build out a bigger, complete cloud solution.

Just as important is leveraging the hype. As suppliers spend more money talking up the cloud, you can benefit if you have positioned yourself as a cloud computing enabler. In addition, all this hype means lots of confusion, which means plenty of opportunity to sell.

Solution providers that have experience in managed services have a true advantage here because they have already dealt with the real differences of selling an annuity-type service as a product, which brings with it a host of new requirements.

It's now time to start putting forth the experience gathered. Start calling yourself a cloud enabler. Here are a few reasons why.

Cloud-savvy SPs will be the new, most highly sought-after channel players by suppliers over the next two years. The annuity revenue stream build is going to be the preferred business model for solution providers as they increasingly move to the cloud. VARs that build renewable revenue through cloud sales will be highly sought after from a merger-and-acquisition standpoint by other channel players. If you plan at some point in the next three to five years to sell your business, the higher valuations are going to be paid for by businesses that have
built cloud positions with recurring revenue.

Cloud sales will be stickier in the long run than noncloud deployments. More importantly, the bigger they become, the more difficult it will be for customers to walk away. Starting small with a customer engagement in this model is a natural. But as time moves on, it's most likely you will add to the complexity of the cloud solution by bringing in more capability from more suppliers. This ultimately puts solution providers right where they belong -- influencing and managing the customer's technology engagement.

Every supplier on the planet is rushing to be seen as a key cloud player. It's as if every one of them is entering a new market without any brand recognition. And a cloud solution brings with it so many different questions that it's a natural sale for the channel. Whenever there is plenty of mystery, lack of standards and a new direction in high-tech, solution providers have a short-lived but unique opportunity
to obtain rich margins.

Like every other opportunity, however, it will not last forever. Being
first isn't always the best thing, but being in the first or second wave of entrants is.

Finally, don't let all the hype make you panic. In the end, this is the latest trend, not the final trend in this business. We've all seen so many trends come and go with predictions by pundits that it will be the end of computing as we know it. The cloud will be an important part of the future, but it's not going to be the only way computing power is sold and managed.

BACKTALK: Make something happen. Robert Faletra
is CEO of Everything Channel. You can contact him via e-mail at robert.faletra@ec.ubm.com.

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