Will You Stay Relevant in the Cloud Marketplace?

As companies move to the cloud and step into the digital transformation wave, carving out your place as a cloud player and hanging onto it is about the long game–especially with all the services opportunities that cloud offers. For the majority of channel partners, it means thinking like a “born in the cloud” provider—meaning, you’re so good at delivering unique cloud services, it’s hard to believe there was ever a different business model in your DNA.

That doesn’t mean reselling is dead. Far from it. Every cloud vendor, including SAP, is betting on its loyal partners to identify and cultivate business, and sell cloud licenses. Licensing is still a critical entry point to obtaining net-new customers, or a transition point for current on-premise customers to move some or all their operations to the cloud.

But beyond the immediate gratification of the license sale, the cloud service opportunity–while it might take some time to realize–is undeniable.

Playing the Long Game
Future cloud growth looks to be unstoppable. Forbes recently shared that industry analysts predict that in five years’ time, cloud spending is projected to increase from where it was in 2015–$67 billion—to $162 billion in 2020. That’s a compound annual growth rate (CAGR) of 19%.

With that growth, cloud platforms are creating a brave new world of complex business models and allowing for more connected global networks for enterprise companies–while also creating a world of new opportunity for small and midsize businesses (SMBs).

That’s why the future of the “born in the cloud” kind of partner is so bright. SMBs are seeking to save on costs, stretch their IT budgets, and use technology in ways that were once unfathomable to compete within the marketplace and level the playing field with larger competitors. They are looking to channel partners to help them weigh the options of hybrid cloud, multi-cloud or private cloud, and provide a host of vanilla and unique cloud services to deliver their business outcomes.

Agile and Adaptive
How do classic channel partners get in the cloud game, manage cash flow and successfully stay in it for the long run? Be creative, adaptive and agile. Think and act like their “born in the cloud” counterparts. This includes the ability to:

Two final points:

Several SAP partners have created new, successful business models and revenue streams through cloud add-ons and applications. The opportunity is there; partners just need to seize it.

Cloud Choice for Partners
To help our channel partners who may be caught between the cloud and a hard place when transitioning their business model to focus on cloud, SAP has rolled out a cloud go-to-market model called SAP PartnerEdge Cloud Choice, profit option. The concept works because there’s a clear division of responsibilities between SAP and the partner. The program also helps reduce risk and cost for the partner, and makes profit margins stable and predictable.

It works like this: The partner manages the customer adoption, marketing, implementation and services. SAP manages the collections, billing and renewals. The partner receives a 20% commission on the annual contract value of the deal.

It’s a great way to help partners who are starting out fresh or transitioning to the cloud business without the worry over on-time customer payments or the costs of a business model makeover.

Will all channel partners move to the cloud? Probably not, but if you want to stay relevant and ensure your future, your best chances are to adopt the mindset and business practices of “born in the cloud” players and work with vendors like SAP that have the solutions, resources and programs that help you win the long game.

Ira Simon (follow me on Twitter – @IraASimon) is global vice president, Partner & SME Marketing at SAP. Learn more about partnership opportunities at: http://go.sap.com/partner.html

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