Virtual Trade Show: 10 Best Practices For Cloud Computing

With cloud computing dominating the headlines of technology publications these days, solution providers are increasingly trying to educate themselves on how they can implement these new solutions for profitably and efficiency. Andrew Hickey, senior editor at CRN, moderated a discussion on 10 Best Practices For Cloud Computing, during today's "Cloud Computing's All the Rage," a virtual trade show sponsored by Everything Channel.

Participating were Jeremy DeSpain, COO and founder of Explore Consulting and Mo Aminian, president of Aminian Business Services. Hickey's panel will is available for viewing here.

From re-educating your employees as well as your customers, to being able to answer questions about security, here are 10 tips to help solution providers adapt to the new business model presented by cloud computing.

Best Practice #1: Prepare Yourself For A Services Play

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This isn’t the hardware and software sales of yore; this is a whole new ball game and it’s focused on services. If you don’t have services offering, you can’t tackle the cloud so don’t even try.

That's precisely the reason some solution providers were attracted to the technology in the first place. "One of the reasons we signed on with Netsweep and the cloud environment was that we didn't want to be sellers of hardware," said Aminian. "We wanted to focus on services."

Solution providers in the cloud are focused on services implementation, support and enhancements around that. A challenge is deciphering the ebb and flow of demand, which takes additional in-house planning.

Best Practice #2: Along With Services Offerings Comes A Recurring Revenue Model

Cloud computing sales usually result in monthly payments, not the big lump sum of a sale. That can be a blessing and a curse, because while integrators do not need to worry about putting money upfront, there likewise is no large payment at the close of a deal.

Still, both Aminian and DeSpain said the model was very attractive.

"Because of the lower cost entry-point, and the elimination of a lump sum payment up front, our sales have increased dramatically. " At same time, if don't stay with customer, they can disappear.

Best Practice #3: Be Ready For Security Questions

Customers are going to want to be sure their data is secure, and to know where their data is.

When DeSpain founded Explore in 2004, those were some of the first questions he was asked. Today, he says, they are among the last. "People's lives today are around the Internet. No one even walks into a bank anymore," he said "Customers have gotten more comfortable with doing complex transactions electronically."

Aminian agrees. Back in 2001, when his company started up, customers were concerned about exactly where their data would be located. "They thought, if the data was on their servers, it'd be more secure," he explained. "But that's not always true." In fact, he said, the objection not only has gone away, but it also has become a selling point. For example, in the event of a natural disaster or fire, having data offsite offers uninterrupted access to it, from anywhere.

Best Practice #4: It's A Whole New Licensing Model

Cloud licensing models are different than on-premise. VARs must be sure they can deal with that change in licensing and shift resources accordingly.

"With the traditional, on-premises model, a vendor would sell you a million-dollar piece of software, hand the disk to you and then it's the customer's burden to get it up and running," DeSpain said. "In the cloud model, they expect service to be up and running and ready to go. We have to stick with the customer for the lifetime of the software. We've got to stay with them for the long term."

Best Practice #5: Cloud Computing Isn't 'Set It And Forget It'

Getting new customers is one of the challenges cloud computing presents, but it’s not the only one. Renewals can be difficult too -- sometimes it's just as hard to get a customer to re-up as it is to get them in the first place.

A solution is to commit to regular communications with customers. Planning renewals makes the process easier. That way, even if management has changed from the time of your initial deal, your team is not only aware of that, but has already opened up a dialog with the new executives. Position your company as constantly in touch and in-the-know about their clients to avoid re-educating the customer about the benefits of the cloud at the last moment.

Next: Best Practices 6-10

Best Practice #6: Virtualize Yourself

With technologies like GoToMeeting, DimDim and WebEx conferencing, the days of in-person meetings are over. That can be a startling adjustment for the sales force. Solution providers can now have customers for years and never meet face to face. It's a different sales model, and it requires some getting used to not only by the solution provider but also on the part of the customer, who may be used be being wined and dined -- or at the very least, is used to having an occasional visit or two.

The big advantage is the cost savings, a benefit that can be passed straight through to the client.

"Our travel costs are down 75 to 80 percent. It's not like we don’t want to meet with them," Aminian said. "And we do have an initial meeting face to face to establish rapport. " However, Aminian and DeSpain said their face-to-face meetings have decreased dramatically.

Best Practice #7: Be open to other cost savings as well

If you embrace the cloud model, travel and truck roll costs will plummet. Be willing to let go of the old guard to make it a success. VARs are not needed to be onsite configuring equipment and touching hardware. That can ease a burden on the solution provider side but raise eyebrows from customers.

"It's an interesting phenomenon, because you tell customers, it's not required [to be on-site]," Aminian said. "Once they see the benefits, they are fine with it."

Best Practice #8: Hardware Sales Diminish In Value

VARs have to come to terms with, and sometimes relish, the fact that they no longer have to sell and configure hardware, precisely because there’s no hardware to install or configure.

The benefits are reduced costs for the solution provider as well as the customer. "We simplified our business by removing all the hardware technology and expertise, and network infrastructure. These folks have hopefully gone to work for large data centers," DeSpain explained. "When we need those services, we pay for them."

Best Practice #9: Pay Attention To Vendors

Be discerning when evaluating vendors. Look for vendors who can help you to provide services customers want, strong leadership, the ability to execute, and solid finances.

"The company has to be well funded" Aminian said, adding that VARs should do their research. "Who are the owners? Where is the financing coming from? Financial stability, especially with a startup is vital. In addition, know how long the company has been out there, how many customers does it have."

Best Practice #10: Make It Your Own

There’s some real money to be made with add-on solutions and customization in the cloud to deliver extra functionality. It’s also a key differentiator. For example, creating an add-on to an existing software package can build you a solid customer base in a specific area.