In the last month, we’ve received newly released data that demonstrates the hyper-growth of the cloud industry. According to IDC, the public cloud market is expected to grow to $70 billion dollars worldwide at the conclusion of 2015. Additionally, their research predicts the number of new cloud-based solutions to triple in the next four to five years.
If you’re a reseller pondering an entrance into the cloud space, now is the time to take action. While you may still be reselling hardware and fixing client systems ad hoc, having a transition plan is not only possible, its mandatory for business success. In this post, we’ll look at three ways to help develop a solid cloud business strategy.
Strategy 1: Focus on differentiation
According to analysis by IDC, cloud ‘as-a-service’ platforms have a lower barrier to entry for those pivoting into managed services or looking to market their own intellectual property. While this may be good news, those who take the plunge will also encounter increased competition. As a result, successful solution providers must offer a unique approach to every solution that sets them apart.
One approach is an emphasis on vertical specialization. Of the $70 billion dollar pie IDC forecasts in cloud spending, 45% will occur in industries like discrete manufacturing, banking, professional services, process manufacturing, and retail. If you already serve these trades, your ability to transition and offer solutions at a premium, might be a reality sooner rather than later.
Strategy 2: Become your own best cloud story
Many times in business, customers will purchase from you because of your motivations. In cloud, being your own success story can make the difference. Since you’re participating in a technology paradigm shift, demonstrating what cloud does to your business first is valuable for your customer as they understand how it can impact theirs.
In their interviews with resellers, IDC discovered those successful in transitioning to the cloud were often applying their own learned business tactics to their customer work. For example, being able to effectively deploy file storage solutions may convince your customers to purchase the solution as well.
Strategy 3: Focus on New Metrics
In previous years, you may have been focused on a base set of key performance indicators for your business such as profit, staff utilization, and resale margins. Transitioning into cloud requires a different mindset because of how services are structured. New metrics include:
- Recurring revenue: According to IDC, this is one of the most important metrics. Ongoing offerings provide an opportunity to build a deeper business relationship while maintaining status as a trusted advisor to your clients. On the Ingram Micro Cloud Marketplace, we enable many recurring revenue opportunities through our over 200 solutions from 70 different vendors.
- Churn: This is the number of customers who do not renew their contract upon expiration. 5-10% is the usual benchmark.
- Customer Lifetime Value: In the cloud, solution providers should project the total profit gained from a customer over a lifetime versus the profit of a single project. This calculation can be summed up as the present value of all future cash flows of a customer.
Having the right mindset towards metrics is critical as you transition to the cloud. As you start serving more customers, you’ll notice greater scalability and a focus on long term contracts in contrast to the one-off projects from the past.
Ready to Get Started?
If you’re ready to make the transition, take the next step and partner with Ingram Micro and join our premier loyalty program, Cloud Elevate. Secure your future in the cloud today, and start transforming your business.