Cloud computing services have rapidly increased in popularity over recent years – and so has the number of cloud-based products and services on the market. Providers such as Amazon Web Services (AWS) offer innovative, flexible, scalable and powerful cloud platforms. Here are some lessons that are relevant to any channel partner looking to capitalise on cloud demand.
New computing paradigm
A key benefit of cloud computing is the ability for organisations and consumers to ‘self-serve’. This is exceptionally powerful because it provides users with direct access and control to functionality in services such as AWS. The complexity is still there, however, so self-service can just mean it’s easier to make mistakes. Cloud surveys such as CloudCheckr’s show that many organisations are not managing their cloud environments correctly to ensure security, performance and availability. A lack of skills, experience and understanding is to blame.
Many organisations looking to adopt or resell cloud do not fully appreciate that it is a new computing paradigm. Cloud requires new strategies, expertise and successful partnerships. This in turn can provide a huge windfall for channel partners. Investing in cloud architect, support and consulting skills, either directly or in partnership, will allow you to support customers through this transition.
Cost and flexibility first attracted customers to cloud. These customers were typically looking to host testing, development and web-facing environments more effectively. Now customers are thinking about how the cloud can support innovation within their businesses. Cloud offers infinite computing power on demand, enabling organisations to be more agile and innovative. We are seeing more organisations using cloud to scale websites for critical digital campaigns. These sites typically have defined start and end times with extreme peaks and troughs in load. They need geographic high availability to support 100 percent uptime targets. Organisations are using campaign hosting to provide auto-scaling and high availability, backed up by a dedicated support team to ensure the campaign runs seamlessly. The key benefit is that once the peak load passes, IT costs scale down.
Rapid change, cost reduction
Competition is fierce in cloud computing. Technology is moving faster and faster and software is increasingly taking over from traditional hardware, with abstraction layers and automation accelerating technology development. At the same time, major providers are getting ever-increasing efficiencies through scale.
In January this year, AWS announced its 41st proactive price cut, passing these efficiency gains onto customers. Rival providers, such as Microsoft with its Azure platform, followed suit.
With such downward pressure on unit computing costs, it is critical that you can demonstrate why customers should increase their use of cloud-based services, because standing still means revenue erosion.
Changing the sales process
Because customers can self-serve, the traditional channel sales model of selling to the IT team is quickly fading. You have to build new relationships with functional leaders within client organisations.
While IT buyers are focused on features, costs, SLAs and migration plans, the head of marketing may be more concerned with deployment times, user experience, reliability and performance. The CEO and business leaders will have a vested interest in data recovery and agility, while the legal teams will be looking regulatory requirements.
The self-service model means customers can add, remove, update or cease their use of the services at any time. So you need to be constantly engaged and understand your customers’ changing requirements. Strong technical and strategic account management is needed to ensure customers stay and grow with your business.
Evolution of revenue model
Cloud offers pay-as-you-go, pay-on-demand or pay by subscription. If you’re a cloud provider and you’re currently generating upfront hardware, software, and project revenues, the subscription model can negatively impact short-term revenues. If you are a consumer, unplanned spikes in consumption or business growth may push budgets out before you’ve realised it.
Revenues and costs can be harder to forecast. Fluctuating usage, different adoption cycles, vendor price cuts and even the number of days in a month will cause volatility in cloud revenues. To manage the transition, a thorough understanding of cloud revenue cycles is critical. For client organisations, planning your cloud journey one workload at a time with your service provider can reduce risks.
Mark Randall is chief customer officer of Bulletproof