The Doyle Report: How to Make Money Selling the Cloud

GreenPages, the Kittery, Maine, digital solutions company, is 25-years old this April. If ever there were an organization that embodies staying power amid wave after wave of digital disruption, GreenPages is it.

In letter to the industry, CEO Ron Dupler describes his company’s evolution. “We have moved from a supply chain organization that offered a faster, better and cheaper method for procuring IT goods, to an industry leader in cloud computing, offering strategic consulting, architecture, systems integration and systems management for the hybrid cloud computing models fueling the digital era,” Dupler writes.

^{Ron Dupler, CEO, GreenPages}

Which brings me to you: are benefitting from the cloud, or still operating with a wariness towards it? A surprisingly number of partners have adopted the latter stance. Don’t just take my word for it. Consider the findings from the CompTIA 2016 State of the Channel Study, which found eroding enthusiasm for cloud computing among digital services providers.

“While 4 in 10 channel firms cite ‘cloud’ as the No. 1 reason to be optimistic about the channel’s future, another third identifies it as one of the main reasons to think negatively about the years ahead,” CompTIA concluded. “Channel respondents describing the cloud’s impact on the channel in the last five years as ‘extremely positive’ has gone from 63 percent to 37 percent in the last two years.”

Experts and practitioners who have embraced the cloud say there’s no reason not to dive in. This includes John Scola, global vice president of cloud channels & transformation at SAP. He’s responsible for SAP cloud partner revenue globally and has outlined several ways partners can make money in a new LinkedIn blog. Here are some highlights:

1) Take Note of the Customer Journey
“…Take a look at the entire customer journey, which includes but is not limited to the job design, build, test, deploy and support cycles,” Scola says. “Take note of the questions you’re asked regularly, the special notes your consultants receive from clients and the gaps you see in the customer’s processes. If you’re not aware of what’s happening at each stage you are likely not serving the client to your fullest capacity and missing opportunities for growth within that account.”

2) Commit Yourself to Package Your IP
“Our experience shows that if you can identify IP within your business offering and package it for marketing and delivery that it will first attract more customers and also increase the profitability of your business,” he adds.

3) Finally, Connect with a Program That Rewards the Value You Provide
SAP’s Cloud Choice program rewards partners for doing different things. For example, it provides referral fees to partners who send business SAP’s way. It also provides incentives and support to those who build an app for the SAP marketplace. Other vendors have similar programs. The point is there are options for almost any kind of business value you provide.

^{John Scola, global vice president of cloud channels & transformation, SAP}

Then there’s Ingram Micro. In advance of the upcoming Ingram Micro 2017 Cloud Summit for partners, Ingram Micro recently published a list of eight practical tips for developing best practices that “can improve cloud sales, marketing, profitability, and business growth for VARs and MSPs.”

The list suggests partners do the following:

1) Build a solution

2) Choose vendor partners

3) Develop a pricing model

4) Establish KPIs as lead indicators

5) Conduct financial planning and analysis

6) Build operational processes

7) Develop a marketing strategy

8) Enable the sales team

Complete details can be found here. Be sure to check out the advice for Step 3, “Developing a Pricing Model,” which is one of the most difficult challenges when it comes to building a successful cloud business.

“One of the biggest mistakes a partner can make is building a solution that is not scalable for future growth and change,” Ingram advises. “Not automating certain operational processes is another red flag. Often a partner will price their solution without realizing all of the operational ‘touch costs’ that can escalate and eat up profits.”

Another point worth noting: building a cloud business takes time. Consider what Green Cloud Technologies, a cloud services provider of IaaS, DRaaS, and DaaS solutions, discovered while building its business.

“Green Cloud has been around for almost 6 years. When we launched, the plan was to get telecom agents to sell cloud and disaster recovery,” says Charles House, executive vice president of sales and marketing at Green Cloud. “In 2012, the agent community wasn’t ready to ‘cloud’ yet. There was no pain; they still made good money selling a commodity product with a short sales cycle that paid good residuals. Fast forward to 2017 [and] I am finally seeing the agent channel move into the cloud. We are seeing wins. The agents are selling an ‘IT’ product even though they aren’t really sure how it works. I am glad to see them finally come around.”

Isn’t it time you did, too?