According to analyst firm Gartner, migration to the cloud is set to continue strongly in 2019. As enterprises seek out ways of reducing costs, Stuart Day, Director of Channel for cloud services provider iland, says channel businesses can unlock the full cloud opportunity and build robust revenues for the future. As you might expect, Day has some ideas how this can be achieved.
Enterprises want to reduce costs, increase efficiency and reap the flexibility benefits that cloud offers and with Gartner predicting growth of nearly 20% this year this demand should be music to the ears of the channel.
Comms Business Magazine (CBM): Building healthy, profitable channel/CSP relationships is going to be as important as ever for both parties this year. Where do you start?
Stuart Day (SD): It sounds obvious but understanding each other’s goals for the relationship is essential.
Channel partners need a CSP that understands their customer’s priorities and supports their business ambitions – ideally offering specialist expertise in the sectors that they are targeting. CSPs are seeking partners that will commit to engaging closely with their service, investing in the relationship to effectively take it to market.
Defining the structure of the relationship early on is vital. Our experience shows partners have differing requirements and preferred levels of investment when launching a cloud services strategy. For some, it is about earning recurring commissions with minimal involvement in end-to-end sales and support. Conversely, resellers often want to retain billing relationships but have assistance with the sales and support process from the cloud provider.
Managed Service Providers (MSPs) want full responsibility for the end customer relationship, which includes billing, account management and support, and they want to profit from adding their own managed services offerings around the cloud service.
CBM: How can you work out if the supplier strategies match what you, as a reseller, is trying to achieve?
SD: Ask probing questions around the CSP’s go-to-market strategy and its commitment to joint activity that will help you win new business. How will they improve your service capacity technically and commercially to put you ahead of the competition? What can they add that will enable you to go after bigger opportunities with confidence?
When customers opt for a cloud solution, speed and simplicity of onboarding is crucial. Find out how your potential CSP will assist your teams in scoping out customer requirements. Cloud environments can be notoriously difficult to right-size, yet only paying for what you need is a core part of the customer value proposition.
CBM: In some markets it’s difficult to build profitable services with transparent pricing. What would you advise?
SD: Clear pricing with no hidden costs is a priority for customers. The waters have become muddied in the hyperscale space, where an estimated 500,000 line items make it hard for customers to optimise their deployment and understand what they’re paying for and why. Leading to frustration for many.
It’s not just customers getting frustrated, either. I regularly hear that pricing is one of the most difficult things for MSPs to get right, but it really needn‘t be. CSPs should be offering partners full visibility of historical billing and accurate predictive billing so there are no nasty shocks in store and customers can confidently budget for their future needs.
With guidance from their CSP, devising a profitable cloud business model ought to be straightforward.
CBM: Today, it is more important than ever to be able to differentiate your offerings so what can a supplier do to help?
SD: You need to be able to leverage the CSP’s specialist expertise as your differentiator.
If you are offering cloud services, you’re going to encounter the complexities of compliance. Your customers will be wrestling with data privacy and security and need reassurance that their cloud solution investment meets the industry’s compliance requirements. This is particularly important for heavily regulated sectors such as finance and healthcare. The truth is that it takes years of experience and continuous focus to keep up to date with the regulatory environment and it’s not something channel partners have the capacity to do.
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