Cloud Transition: Key Benefits for Solution Providers


Aug, 15

Cloud Transition: Key Benefits for Solution Providers

As a solution provider, you’ve heard the narrative of how cloud will transform the way business is done. Numerous articles champion the benefits of the cloud, from increased agility to monthly recurring revenues.

According to new findings from research firm IDC, the advantages of switching to cloud are better than ever. While adding cloud to your practice may require new sales and business strategies to meet customer needs, the transition has proven to be extremely beneficial, opening new doors to business growth and expanding customer reach.  We’ve summarized IDC’s observations into the following strategic benefits that we believe reinforce the significance of cloud.

Benefit #1: Customers will be asking for cloud

Customers are beginning to demonstrate increased interest in moving to the cloud IDC research indicates an industry transition where customer interest in cloud is on par with growth expectations, while traditional projects like server implementations are expected to see no growth at all.

Additionally, IDC also found that 28% of customers are looking to adopt a cloud-first strategy, and 60% consider cloud as part of the equation when purchasing new IT solutions. Therefore, it’s fair to assume that the next customer who calls you will be asking how your cloud offerings can serve them.

Benefit #2: It pays to transition to cloud

Solution providers who add cloud to their services observe a significant jump in their gross profit. In two extensive studies conducted since 2013, IDC discovered solution providers earning more than 20% of their revenue from cloud exhibited nearly double the amount of revenue growth. Increased growth was attributed to monthly recurring revenues resulting from the implementation of new cloud solutions.

The story gets even better for solution providers earning 50% or more of their revenue from cloud. In these situations, IDC discovered solution providers reported nearly twice the gross profit and acquired new customers 1.5 times faster than those who earned less than 10% from cloud. While many of these solution providers had been selling cloud for some time, the data (and the image) shows a correlation between the amount of cloud solutions offered and revenue growth.

Benefit #3: Companies who adopt cloud increase their future value

Finally, adopting cloud is a positive attribute for company valuation and future prospects of growth and demand. Despite potential challenges, IDC confirms the transition to cloud is a smart move given the predictable income stream, industry momentum, and enhanced opportunities for leveraging intellectual property that cloud provides. Since a strong balance sheet is critical to the long-term success of any organization, the addition of new cloud solutions also increases a company’s future value while driving the industry forward.

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