Welcome to the third week of our Cloud Champion campaign. This 12-week step-by-step course is designed to get you cloud competent and cloud confident. If you haven’t signed up yet, please visit www.microsoft.com.au/cloudchampion.
Last week covered all the training in market to help provide the skills you need to successfully sell and deploy Cloud solutions. This week will include what an ideal cloud partner looks like. We will share some examples of successful partners making money by selling cloud solutions and insights to what they have done to succeed.
The slides and recording from the webinar will also be included in this post.
The Cloud Opportunity Transforming your business to include a cloud strategy is no longer a question of “if," but “when."
“Office 365 is the fastest growing business in Microsoft’s history and Azure is adding a 1,000 customers a day” writes Josh Waldo (Microsoft’s Senior Director of Cloud Partner Strategy) in his blog post. “According to this IDC study, worldwide public IT cloud services revenue is expected to reach 100 billion dollars in 2016 which is five times the growth of the IT industry. 45 percent of IT budgets are expected to be devoted to cloud IT initiatives by then as well. Ask yourself how many customers you’ve talked to in the past year and the term cloud has come up in some way. If you don’t have an answer for them, your competition will.
This is the reality, and, although the reality is highly disruptive, it comes with a huge opportunity. According to the same IDC research study, cloud-oriented partners have experienced on average 1.6 times the gross profit and 2.4 times faster growth than other partners. Cloud-oriented partners are winning deals from other partners, selling into white space, and driving hybrid solutions.”
How are these partners able to experience such profitability? Successful Partners have accelerated their revenue streams and customer targeting into new and evolving directions, as the Cloud has opened up new opportunities across multiple business models. These partners have used this as the foundation to increase margins and establish annuity combined with aggressive growth through new customer acquisition in the whitespace, and have done so much faster than their non-Cloud competitors.
Despite what others will tell you, there are truly only two types of partners out there - partners that resell other’s solutions and those that sell their own solutions. Sustainable profitability is coming from the unique value and differentiated offerings that partners deliver with online services. In many cases this includes reselling, but pivots on the value add from our partners. And while Cloud solutions are transforming vendor-to-customer relationships to always-on, customer expectations of our partners are for continuous engagement.
Different Cloud Models This dynamic has implications on traditional partner business models and opportunities, the first of which is on project based services, a business model that experiences volatile peaks and valleys of billable utilization dependent on the lifecycle of big projects. Utilization is not constant. It spikes and it lulls in a cyclical pattern which can prove both hard to manage and predict. There is still money to be made in the Cloud with this model, especially now, but it takes more of these projects to match the on premises deals of the past. This means partners need to optimize their delivery model and up level their consulting engagements focusing on the business problems, first and foremost, versus the IT challenges.
The continuous engagement model is loosely referred to as managed services. Managed services promises a steadier stream of revenue where the focus is the value of the customer lifecycle over time instead of the upfront value of the project. This model typically involves a longer ramp to profitability, but it creates annuity where it didn’t exist before.
The last model is centred around IP creation. Development of IP in the Cloud is much easier to do now than in the past and the barriers to entry are much lower. A partner’s unique IP enables it to create valuation, which, combined with both project based and managed services, offers a potentially powerful combination.
We see partners around the world honing in on the right combination of services that combine our platform, our Cloud services, and hybrid solutions to win deals with a new conversation and drive the future models of profitability, ahead of their competition.
First Mover Advantage The benefits are being realized by the first movers, and your move needs to make sense for you. Finding the right combination of business model mix is essential for long-term profitability. One thing is very clear - Cloud computing is here now and you should not wait to start investing in your future.
Cloud Partner Stories