Alfred Manhart, senior director channel and SI EMEA, NetApp, elucidates the biggest challenges for partners when selling cloud solutions.
There is a widespread misconception about the cloud always being a simple, easy-to-set-up solution and that the process ends there. The truth is that using cloud is an elaborate process that involves immense planning, integration, implementation and management, maintenance, support and every other aspect you can imagine. With the increasingly diminishing focus on hardware, value-added resellers (VAR) need to evolve simultaneously by adding more and more services and products that provide business solutions to their portfolios. VARs must focus on developing business solutions that involve various platforms, products, and customer-oriented services to become consultants that help their customers succeed and keep up with the ongoing digital transformation that is redefining the way enterprises function.
There is a high revenue potential in cloud services but with a different split and segmentation. Cloud services are swiftly transforming revenue models. Therefore, resellers need to explore new ways to fit in and stay relevant in the Software-as-a-Service (SaaS) world. VARs need to explore opportunities presented by changing business and financial models along with vendors and end customers. For instance, small-to-medium-sized businesses (SMBs) look for one bill and one service provider, which in turn creates opportunities for cloud resellers to come up with innovative cloud services packages with other hardware and software purchases. VARs operating in traditional spaces may fail to attract vendors and distributors over time, leaving them with lesser opportunities in the market and prompting their transformation into cloud resellers to compensate for the lost revenues.
Cloud has emerged to be one of the most important aspects of digital transformation. Around 67 percent of all enterprise IT infrastructure and software spending will be on cloud-based solutions by 2020, according to IDC. The time is ripe for the channel to rise up to the challenge by providing comprehensive cloud computing technology certification programmes. Investing in education, certifications and specialisations must become a priority for partners in order to stay ahead of the competition. With the advent of hybrid cloud, vendor portfolios are changing drastically, and training programmes aimed at honing expertise are becoming increasingly important. Some partner firms are even adopting mandatory training requirements as part of their employee bonus programmes.
Finding and addressing the needs of new line-of-business decision makers is another key area that should not be overlooked. Education and IT channel training around business basics and enhanced communication with customers are needed to develop non-technical sales professionals. Enterprises are showing an increased interest in hybrid cloud and are seeking new approaches to IT. The market is witnessing an emerging need for a new breed of business analysts: professionals who can help customers rationalise workloads and assist them with their cloud choices. Resellers and end-users must gain a better understanding of what the cloud is as the subset of definitions within the cloud becomes stronger.
In line with the ongoing massive business model transformation, channel operators need to grow their engagement with broader and more complex ecosystems. Given that they are the final layer of the consumption model that customers want to use, the commercial constructs of channels’ engagement with their clients is becoming the basis for decision making. At the other end of the spectrum, the reseller-centric channel is becoming increasingly centred on adopting new consumption models and being cloud-ready. Generating annuity services business and software subscription revenues are new concerns.
The diversification of business services and models to include managed services and improving credentials in the services area should be among the priorities of the channel. As long as resellers understand their customers’ needs and offer the right kind of services to help them with their business priorities, positioning themselves as trusted managed services providers (MSP) is not a difficult goal to achieve. Shifting from a traditional services-provider role to a trusted, value-adding MSP starts with understanding the full responsibilities of an MSP, and then working towards meeting these requirements. Establishing a business model is the next step. Aspiring managed services providers should be proactive and consider automating some of their routine IT support services as this will help them differentiate themselves.
Restructuring your entire business model to focus on sales and delivery of cloud services is not easy as one might think, and it involves an immense amount of careful planning, preparation and research. Morphing into a cloud services delivery partner can significantly impact sales teams and their positioning of the cloud. Managing this business model transition can be challenging if you are dependent on large capital purchases from customers every quarter. In order to make this transition process less bumpy, consider beginning with cloud service sales, and gradually add the number of managed services in your portfolio. This will help in maintaining a healthy balance by preventing negative effects on your current business processes, and simultaneously paving the way for future cloud revenue.
