By: Pete Engler
With the start of a new year quickly approaching, it is a great time for resellers to evaluate their success over the last year and consider any changes to their business strategy or portfolio of products. For 2016, that will likely mean offering cloud services for your customers, or expanding the cloud-based service offerings included in your portfolio.
Over the last few years cloud computing services have dominated the Information Technology market, becoming the cutting-edge solution for many different products and services. Now that cloud computing is a few years old and customers are beginning to see the many benefits of using cloud services, the shift toward those solutions is growing at a rapid pace. Many IT products have made or are making their transition into the cloud as a preferred option for customers over the deployment of traditional premises-based solutions. Because of the increasing availability of cloud services from trusted vendors, and the high demand for cloud-based solutions by SMB and enterprise customers, now is the time for you to consider using the cloud as a way to expand your reseller business and increase revenue in the coming year.
According to Forbes, the cloud computing market is increasing at a compound annual growth rate (CAGR) of 22.8 percent and the trend is not likely to slow in the next several years. In addition to the market growth rate, the number of new products being introduced into a cloud infrastructure is also accelerating. International Data Corporation (IDC) predicts the number of new cloud-based solutions will triple in the next four to five years. With adoption rates of cloud services growing at such healthy levels the drive for cloud services is not going to let up anytime soon.
Cloud computing and cloud-based services have many benefits for your customers. One benefit is that cloud offers an easier path to make changes. Many cloud services have the option of month to month contracts, making it much easier to add or drop services, or change vendors. Another key benefit is not having a large upfront capital expenditure as you do when purchasing a premises-based solution. Removing this costly barrier to entry is quite appealing to smaller organizations and new businesses that may have more cash constraints. Conversely, a key pain point for businesses adopting a cloud solution is bandwidth, which can be easily remedied with the wide choices and lower cost of internet services currently on the market.
For resellers, there are many benefits for selling cloud services. Most cloud services pay monthly recurring revenue (MRR) as long as the customer is enrolled in the service. Monthly recurring revenue that is built up over time offers revenue stability for you, instead of starting the monthly sales cycle at zero. Additionally, as resellers, you now have the option of purchasing cloud services through a simplified online process, making it much easier to buy and manage the services for your end customer. Increased competition and product options also result in better service and prices for the customer, and in faster deployment times and reduced support time. All of these benefits also work in your favor as a reseller or integrator and ultimately translates into higher margins.
The need to add cloud products and services to your portfolio of products has never been more important than now. Chances are, if you haven’t already faced a competitive situation where a cloud solution is being offered, you will soon. The start of a new year is a great time to research and select cloud-based solutions that will benefit the customers you serve, but also make you more competitive and help increase your margins.
Pete Engler is the channel marketing manager at Digium, a business communications company based in Huntsville, Ala., that delivers enterprise-class Unified Communications.