Cloud Computing Gives VARs New Stickiness

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Solution providers are being beaten over the head with the benefits of cloud computing: it's cheap, it's easy to sell and it's simpler to manage. But one of the big draws of cloud computing to the channel is its stickiness.

Solution providers say that they're experiencing microscopic amounts of customer churn, if any, and that's mostly due to the stickiness created by cloud computing.

Mike Martin, director of cloud computing for U.K.-based international solution provider Logicalis, said the cloud puts VARs in the driver's seat and lets them build a strong partnership with the customer, manage that partnership and create a lasting relationship. Logicalis is seeing its cloud computing offerings grow at an exponential rate.

"It makes us sticky," he said. "It gives us differentiation."

To create that stickiness, Martin said, solution providers must transition their business from being simply a traditional reseller or integrator and move away from the product sale. Cloud computing creates a paradigm through which solution providers must become not only the technology provider, but a services arm and consulting firm all in one. VARs become the true trusted advisor that many have talked about for years.

"Cloud computing is not a product you buy," Martin said. "It's not a SKU. It's not a technology. It's an IT delivery model. And our goal is to be a trusted cloud provider for our clients."

Cloud Sherpas, Atlanta, has seen incredible stickiness with its cloud computing offerings around the Google Apps platform. According to Cloud Sherpas, the company has seen zero percent customer churn since the company launched just over two years ago. Cloud Sherpas did this while moving more than 600,000 enterprise users to the Google Apps platform and putting its software to use within more than 8,000 companies representing more than 1.5 million Google Apps users.

Cloud Sherpas CEO Jon Hallett credits the stickiness to "the recurring snowball nature of the business." Hallett added that Cloud Sherpas pro-services approach only boosts the already sticky nature of Google Apps and the cloud.

Jeff Ragusa, Google Apps SMB channel lead, said what is giving VARs stickiness in the cloud, especially when it comes to Google, is that some cloud providers let their partners take the reins and control the customer relationship. When a partner handles the ordering, provisioning, support and billing, it makes them the one-stop cloud shop for the customer and boosts their relationship.

"We try to provide a framework for that trusted advisor-type relationship," Ragusa said, adding that most of Google's 2,000 reseller partners are seeing very little churn.


Next: What Is Negative Churn?

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