ROAD MAP. How to Successfully Add Cloud Services as a Revenue Stream Using a Partnership Model

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1 ROAD MAP How to Successfully Add Cloud Services as a Revenue Stream Using a Partnership Model

2 Table of Contents Introduction Is This ebook for You? 03 Part One: Following the Signs How Companies Purchase IT is Changing 05 Part Two: Finding Your On-Ramp Starting Your Cloud Strategy 08 Part Three: The Two-Way Street Picking a Cloud Partner 16 Appendix: Hostway s Partnership Hosting Program 22 Webinar / Additional Resources 26

3 Is This ebook For You? Knowledge Level: Moderate Cloud Opportunities Are Huge Are you interested in reselling cloud services? What about selling cloud-based applications? If so, you re in good company. Cloud services are expected to increase dramatically in the next five years, and companies in the IT space are wisely seeing the opportunity to cash in on this growing demand. But despite the overwhelming market opportunity, a large percentage of companies going to market with cloud services will fail. The reason? The most successful cloud strategies employ collaboration across multiple organizations, and establishing these partnerships can be complicated and confusing for those new to the cloud space. This ebook will teach you how to navigate the tricky landscape of cloud services to create partnerships that will successfully add this new revenue stream to your company. Who will benefit from this ebook? VARs with Integrated IT Solutions Hosting Resellers Companies with Multiple Data Centers Application Developers Managed Services Companies Gaming Services SaaS Integrators and Developers Utility and Grid Solutions Providers What will we cover? Finding a partner that: Provides revenue opportunities back to you, so you can sustain your growth Provides technical resources for both tactical and strategic guidance Provides service offerings that complement yours

4 04 PART ONE - FOLLOWING THE SIGNS Life is one big road with lots of signs Bob Marley PART ONE - FOLLOWING THE SIGNS How Companies Purchase IT is Changing

5 05 PART ONE - FOLLOWING THE SIGNS How Companies Purchase IT is Changing The tides are shifting in the world of buying traditional information technology, and the new wave revolves around cloud deployment. As cloud becomes more common in consumer life, priorities are being set by groups outside of IT, and companies are moving pieces of their business to the cloud at a rapid pace. Among the reasons why customers are adopting cloud: 2012 Cloud vs. Non-Cloud SMB Spend North America SMB Cloud SPend*($M) % 14% $27,466 $31,755 $36,565 $41, Cloud Allows SMB to Better Meet Strategic ICT Needs It Solution Importance Enterprise-level Mgmt. Server Virtualization Integrated Conferencing Moving Apps to Cloud 33% 26% 24% 18% Source: TAM Market Analysis by AMI

6 06 PART ONE - FOLLOWING THE SIGNS How Companies Purchase IT is Changing Your Customers Want Cloud They are Increasingly Moving to the Cloud The number of very small companies (2-10 employees) using paid cloud services will triple in the next three years. They Plan to Use More Cloud Services Current cloud users report purchasing an average of 4 services in the cloud now and expect to use 6 in the future. They are Growing More Cofortable with Cloud Services 65% expect to be using cloud services in the next 2-3 years. They Think the Cloud is Important 50% agreed that cloud computing is going to become more important for business such as theirs. Soure: Edge Strategy Survey by Microsoft

7 07 PART TWO - FINDING YOUR ON-RAMP If you don t know where you re going, any road will get you there. Lewis Carroll PART TWO - FINDING YOUR ON-RAMP Starting Your Cloud Strategy

8 08 PART TWO - FINDING YOUR ON-RAMP Starting Your Cloud Strategy There are four questions to ask in order to begin creating your cloud strategy: 1. Should I Be a Sales or Referral Source? 2. Build vs. Buy Which Makes Sense for Me? 3. Which Services Am I Going to Offer? 4. Will My Customers Sign Up?

9 09 08 PART TWO - FINDING YOUR ON-RAMP Should I Be a Sales or Referral Source? Providing cloud services isn t the only way to cash in on the growing demand for cloud. You can also make money by referring customers to cloud providers. The distinctions between reseller and referral relationships can be confusing. It boils down to who owns the customer relationship. Referral the end customer, a direct payment to you, or if you re also reselling a service through that provider it could be a discount back to your bill Hosting companies focus on finding referral partners as agents of lead generation, as opposed to looking at them as partners to go to market with. Reseller of discount structure in place so you can add your margin on top Private and White-label resellers: More advanced products can be resold with a discount coming in the door and a markup from the reseller side. In such a relationship, the reseller will offer first or second-level support on the product for the partner and all communications will be handled through the partner to the end hosting provider.

10 10 08 PART TWO - FINDING YOUR ON-RAMP Should I Be a Sales or Referral Source? Which revenue stream will be a better fit for you? Refer Customers PROS on extra responsibility yourself Sell/Resell Cloud Services PROS CONS CONS communication, etc. Choosing this option? Skip to Part 3 Choosing this option? Continue to next page

11 11 08 PART TWO - FINDING YOUR ON-RAMP Build vs. Buy - Which Makes Sense for Me? If you ve decided to sell/resell cloud services instead of refer, the next question you ll typically face is this: Should I build my own infrastructure or buy resources from a hosting provider? Let s look at the pros and cons of each: Build Your Own Infrastructure PROS CONS customer education Buy (Partner w/ Hosting Provider) PROS CONS problems in the event of an outage In the end, most companies find it much easier and more cost-effective to provide cloud services through a partnership arrangement with a hosting provider. servers and the salaries of the three system engineers we had to manage those servers, the cost difference is extremely significant to our bottom line. - Cloudkey Founder Scott Montgomery

12 12 08 PART TWO - FINDING YOUR ON-RAMP What Services Am I Going to Offer? The driving factor in deciding which services to offer should be your customers demand. What are they asking for? What gaps exist in your current offering? Let s look at a few commonly resold offerings:

13 13 08 PART TWO - FINDING YOUR ON-RAMP What Services Am I Going to Offer? This is a high-level glance at common types of applications and their suitability and revenue opportunities within a cloud environment. When you begin engaging with a hosting provider, they should be able to walk you through your options in more depth, however this is a good starting point. Application & Example Consumer Comfort w/ Ease of Selling Ease of Reselling Sales Effort Revenue Opp Product in Cloud (Does it sell itself?) (Is it seamless?) (Required Knowledge) High Extreme Extreme Moderate Medium Exchange 2010 Collaboration: Medium Moderate Extreme High High SharePoint Business Growth: High Extreme Moderate Low Low Marketing, CRM Web: High Extreme Extreme Moderate Medium ecommerce, Portals, etc Database : Low Difficult Extreme High High Enterprise Resource Planning Legacy/Mission Critical: Low Difficult Extreme High High Billing Systems

14 14 08 PART TWO - FINDING YOUR ON-RAMP Will My Customers Sign Up? Your Advantage: Existing Relationships One common concern for resellers considering the cloud market is that they ll be at a disadvantage compared to large, established cloud hosting providers. This is simply not the case for two reasons: hosting company and can be reluctant to trust their technology to an unknown provider. to provide and emphasize. You know what your customers are asking for, giving you the ability to provide highly targeted services and make sales from day one. Your Relationships + Hosting Provider s infrastructure = Mutually Beneficial Partnership Hostway would prefer that customers go to our partners first. You know your customers, we know hosting. The opportunity for mutual success and growth increases infinitely through our partnerships. Russell Griffin, Hostway Director of Channel Programs

15 15 08 PART THREE - THE TWO WAY STREET Understanding is a two-way street. Eleanor Roosevelt PART THREE - THE TWO WAY STREET Picking a Cloud Partner

16 16 08 PART THREE - THE TWO WAY STREET Picking a Cloud Partner A partnership should never be one-sided. There are a few key things you should look for in a cloud hosting provider, without compromise: Complementary Skills/Offerings A Solid Reputation Network of Contacts to Leverage Agreement on Who Owns the Client

17 17 08 PART THREE - THE TWO WAY STREET Complementary Skills / Offering We re putting this one first, because it s arguably the most important. You need to choose a provider that offers complementary skills and products to yours. Partner Checklist Offers Guidance Your partner should listen to your needs and concerns and help you come up with a plan to bring your cloud services to market. Supports You Technically They provide the hosting expertise, and are willing to get on the phone with your customers, providing high-quality service and support so you can focus on your business. Doesn t Have Many Products/Services that Overlap Yours You don t want to partner with a competitor, especially if they re much larger than you. Their business may start to cannibalize yours. Offers Products/Services that Enhance Yours or FIll a Gap in Your Product Offering You want to choose a partner with an offering that is easy to package with your own and/or meets a need that has prevented you from closing sales in the past.

18 18 08 PART THREE - THE TWO WAY STREET Confirm Their Reputation This may be obvious, but it s important to be extremely selective in choosing who to link to your company name. Partner Checklist Ask for customer references Research online Examine SLAs Will you be compensated for downtime? Is the company s data center(s) SSAE 16 certified? Is the cloud highly available and highly redundant? Ask for a trial period

19 19 08 PART THREE - THE TWO WAY STREET Networking / Marketing Support One of the benefits of utilizing someone else s cloud is that they ve already done a certain amount of legwork so you don t have to. This is true of establishing the infrastructure, certainly, but what do they provide you beyond their technology? Partner Checklist Will they refer business to you when it makes sense? Do they actively promote your business to their other customers and partners? Do they provide marketing support, such as: Will they make it a priority to make you money?

20 20 08 PART THREE - THE TWO WAY STREET Agreement on Who Owns the Client You may think since you re the one bringing in the customers, you re automatically the one who owns them. This is not always the case. Speak with the provider in explicit terms about their rules regarding client ownership. Partner Checklist The partner should let you own the client if you want They should be willing to share the client if that s your preference (you handle the day-to-day relationship, while they handle support calls directly) They should be willing to own the client if you do not want the day-to-day responsibility of service The arrangement should be flexible, on a per-client basis if desired You should not be penalized regardless of the arrangement you select

21 21 08 APPENDIX APPENDIX Information About Hostway Partner Programs

22 22 08 APPENDIX Information About Hostway Partner Program Hostway s Partner Program was the only channel program to be awarded 5 stars by CRN Magazine in The 5-star award is reserved for vendors that understand that a successful partnership does not rely solely on the technology. By offering their partners tools, education and regular updates, vendors on this list go above and beyond traditional support to ensure a mutually beneficial partnership. - Kelley Damore, VP and Editorial Director for CRN

23 23 08 APPENDIX What Sets Us Apart? Industry-leading discounts & payments Education/Thought Leadership for Customers Assigned Channel Manager support to help you grow your customer base. An API Surface Sizes from AddThis.com. Fully-Integrated Partner Portal Onsite Sales Training from a Channel Manager No specific revenue targets or up-front contracts Sales Consultation and Custom Solution Design 40% of Fortune 500 service providers resell our cloud services - Aaron Hollobaugh, VP of Marketing & Communications

24 25 08 APPENDIX Contact Us Get started with a free cloud consultation. Call: Visit:

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