Peak 10, a Cisco-powered IaaS provider, believes that the best way to reach customers is through partners.
Peak 10 was founded in 2000 and has been invested in the channel since the partner program was launched in 2012 by the now retired former channel chief and senior vice president, Steve Harris. Having a channel-friendly approach to the market has paid dividends for the cloud service provider, who takes in about 40 percent of its revenues today through indirect sales. Peak 10 wants solution providers to know that it is actively looking to continue to grow its business through the channel.
"We want to get the word out that we are open for business and committed to the channel. Partners, we want to help you learn about cloud," Dave Sroka, vice president of channel sales for Charlotte, N.C.-based Peak 10, told CRN .
About 40 percent of Peak 10's new customers today come from its channel partners, Sroka said. The reason why he believes solution providers are a force to be reckoned in the cloud market today is because the IT market is changing, and with that, so are margins on hardware and connectivity services. Impacted partners are starting to leave their comfort zones in search of higher-value services and solutions that they can offer their end customers.
"Ten years ago, IP was $20 a [megabit], and now it's 30 cents. Customers are also price-shopping a lot more. Those are real changes that are impacting partners," Sroka said.
As margins pinch on circuits, solution providers are turning their attention to more lucrative and long-term sales opportunities, such as cloud services, he said.
Cloud-based services provide a recurring and potentially long-term revenue stream for partners because many customers renew subscriptions on these services, he said, so the cloud market is a great opportunity for the channel. Unlike the predictable routine of customers switching to a cheaper carrier for connectivity needs, the competitive pressure that providers feel as a result of their customers switching to a lower-cost cloud provider is "nonexistent," Sroka said.
"The big thing about co-location and cloud is the churn is so low. When [partners] bring a customer in and take good care of that customer, they tend not to leave," Sroka explained. "It's not worth the aggravation and potential risks because you are talking about critical compute layers you'd have to move as opposed to an IP circuit that is really easy to flip."
But selling cloud is a lot different than selling a circuit.
"Partners are wondering how to get into it and who to partner with because there are so many options, and cloud providers are all different," he acknowledged.