HOW TO SELL CLOUD SERVICES. A channel guide

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1 HOW TO SELL CLOUD SERVICES A channel guide

2 CONTENTS Step One: Dispelling Misconceptions Around Public Cloud 3 Step Two: Explaining the Benefits of Public Cloud 5 What Makes a Great Cloud Service Provider 6 About Us 7 02 HOW TO SELL CLOUD SERVICES

3 To truly succeed in today s dynamic IT channel, resellers need to look beyond pure product sales and support. Managed services, and in particular hosted cloud services, can provide resellers with regular, margin-rich revenue streams and the opportunity to build long-term, profitable relationships with clients. However, the adoption of private cloud by larger enterprises and organisations could threaten this opportunity, particularly if IT providers do not tackle the misconceptions held by organisations around the advantages and disadvantages of private and public cloud. This paper highlights why enterprises should be choosing public over private cloud as well as the benefits that the right cloud service provider can offer. STEP ONE: DISPELLING MISCONCEPTIONS AROUND PUBLIC CLOUD There s a common misconception amongst CIOs that public cloud is a threat to the IT empire and that therefore it has to be protected at all cost. CIO s may suggest that the private cloud presents cost savings for the enterprise. These might include reducing transaction costs, decreasing inventory costs or making use of cloud software techniques, such as taking advantage of scalable database technologies, to cut costs. However, these arguments have to be balanced against the costs to the enterprise of implementing the private cloud, such as a hardware refresh, training IT staff, orchestration software and the management and hardware overhead of operating an in-house cloud solution. There are five common objections CIOs will present against a public cloud. Each are easily dispelled. 1. Public cloud has inadequate SLAs There are some high volume public cloud services that have inadequate service levels for enterprise applications. But that does not mean that no service provider can ever provide an adequate SLA. SLAs are as much about setting the terms of and expectations from the relationship between the enterprise and its service provider; as they are about providing a mechanism of obtaining financial compensation in the event of inadequate service. Resellers and service providers seeking to provide cloud solutions to critical functions need to be prepared to offer meaningful SLAs; not only in terms of financial compensation, but also in terms of setting expectations for the relationship. The SLA, for instance, should outline how service reviews will be performed and faults handled. 2. Public cloud has insufficient security Most security problems are not down to technical failings, but are instead due to poor organisational practice. Whilst a public cloud may present security challenges, many of these are also common to private clouds. The difference is that service providers have in-house cloud-focused security expertise, whereas enterprises in general do not. 3. Regulatory reasons prohibit public cloud Regulatory restrictions do not in general prohibit use of public cloud. Rather, they restrict or mandate specific behaviour, and these restrictions are not in general technology dependent. It is necessary for service providers to get a deep understanding of what the regulatory restrictions actually are, rather than accept the statement that regulation bans them at face value. 03 HOW TO SELL CLOUD SERVICES

4 4. Applications are required to be in-house for technical reasons Technical reasons not to use external public clouds tend to fall into two categories: migration and technical properties. Migration costs do indeed exist. However if a private cloud truly is a cloud, migration costs will be much the same. Service providers can address this objection by providing a combination of cloud and noncloud services, or simply agreeing that some legacy IT is unlikely to be outsourced until the next technology refresh. Technical properties such as high frequency trading are often inherently unsuitable for any form of cloud technology regardless of whether it is public or private. 5. Public cloud is just hype The CIO that states we can t put our whole IT function on Amazon Web Services may have a fair point. However, many of the objections to utilising public cloud technology represent examples of the principal agent/principle problem: the buyer may have a personal incentive at odds with that of the enterprise as a whole. The rational service provider will thus seek to ensure its arguments are made to the widest possible audience within the organisation; the CEO or CFO may be a more receptive audience than the CTO. This underlines the importance of building a deep relationship with the customer and gaining a comprehensive understanding of their business, rather than focusing on cost per CPU cycle. 04 HOW TO SELL CLOUD SERVICES

5 STEP TWO: EXPLAINING THE BENEFITS OF PUBLIC CLOUD So why public cloud? The benefits of a public cloud are business-wide. It is the finance department that requires more number crunching capacity at the end of quarter; the HR department that needs increased resources for a recruitment drive and the marketing department that has to scale to meet an influx in web interest. For these reasons, it is down to IT partners and cloud service providers to provide the evidence and convince the business decision makers of the benefits a public cloud solution can deliver. For resellers and service providers, the benefits they can deliver to the business through a public cloud are widespread. These include: 1. Enterprises can scale when required The service provider can offer the enterprise elasticity for the ability to scale service up and down as rapidly as necessary. 2. Organisations only pay for what they use A service provider can offer utility pricing for enterprises to buy as much or as little as required, offering pay-asyou-go billing, backed by appropriate metering and rating. 3. Organisations do not need to cope with software failure Investing in expensive hardware is the way most organisations with their own private cloud offer a consistent software performance. The organisation then relies on a low hardware failure rate. For the public cloud service provider, this is unnecessary. Rather than attempt to build hardware that never fails, cloud architecture accepts that hardware components will fail, and ensures that the software and applications running on it can handle this. The service provider can therefore deliver reliability in a more cost-effective manner. 4. Public cloud supports demand peaks and troughs A public cloud can offer organisations the resource to handle peaks and troughs on demand. For all but the largest 1 of IT departments, this is an unrealistic prospect for private clouds. IT departments of more normal size with a private cloud infrastructure must over-provision, or more accurately cannot underprovision if they still want to offer elasticity and utility in the same way that public cloud providers do. 5. Public cloud offers economies of scale True multitenancy requires more than one customer. Whilst private clouds may have more than one internal customer, the number of customers is smaller than generally required to achieve the economic benefits of a public cloud. As a result, no private clouds, except for the very largest, are likely to offer the same economic benefits as a public cloud. 6. Public cloud offers resource savings For an organisation to implement a private cloud infrastructure, multiple resources are required. These include hardware refresh, training IT staff, orchestration software and the management and hardware overhead of operating an in-house cloud solution. In a service provider environment these costs are spread over a far wider customer base so the organisation is not paying directly for this resource. Private cloud is in essence an attempt to use cloud technology without gaining any of the efficiencies. It is down to IT partners and service providers to educate business users of the benefits. 1. Large is an organisation with sufficient scale that they could operate as their own service provider, perhaps the IT departments of S&P 500 companies for example. 05 HOW TO SELL CLOUD SERVICES

6 WHAT MAKES A GREAT CLOUD SERVICE PROVIDER This paper has outlined some of the misconceptions around public cloud and explains the key benefits of adopting a public cloud approach for business. When it comes to providing public cloud services to enterprises, IT resellers and services companies have a choice; either develop their own infrastructure or partner with an established provider and deliver cloud services under their own (or the established provider s) brand. If they choose to develop their own service, resellers face a host of technical, organisational and financial challenges. However, by partnering with an established provider such as ALVEA Services and offering a cloud infrastructure based on best of breed cloud orchestration software, they can be assured of delivering a flexible, robust and cost-effective solution for their clients. ALVEA Services have been created exclusively for channel partners. They allow resellers to offer enterprise-class cloud services to their clients without the need to invest time or finances in developing or supporting a complex virtual infrastructure themselves. ALVEA Services enables the channel to offer the new products and services that their existing and prospective customers want, while building a recurring revenue base, with the option to white label. The benefits of partnering with ALVEA Services include: The ability to sell enterprise-class cloud services to customers and generate monthly fees which grow as customers demands increase The knowledge that ALVEA s datacentre allows total control over the service delivered to resellers as well as their customers, along with a 100% SLA Access to a data seeding service to quickly and securely deploy large quantities of data into the cloud service Confidence that the100% channel service means customers cannot buy ALVEA direct, giving resellers total control of their value-add and margin Just-in-time delivery of virtual servers removes the need to hold physical stock for deployment, maintenance or replacement. Servers are deployed instantly when resellers or their customer need them, so they never need to be purchased in advance A reseller portal that allows new accounts to be provisioned quickly and tailored to each customer s needs Simple online provisioning of all services no need to requests or find out progress via the phone, the whole process can be executed online Customers can manage their services online, cutting the amount of direct support resellers need to provide Private labeling of ALVEA services with no set-up fees that allows resellers to deliver cloud services under their own brand Sticky client relationships for resellers; as hosted services increase client retention because they are critical to business, they create recurring revenue and offer the channel opportunities for consulting fees With ALVEA Services, the virtual infrastructure is managed, maintained and supported, allowing resellers to concentrate on their clients and core business. ALVEA Services is fully certified against the Cloud Industry Forum s (CIF) Code of Practice. The certification demonstrates the company s commitment to best practice in the transparency, accountability and capability of its cloud services and provides channel partners and their customers with the confidence that ALVEA Services is a trusted and fully accredited Cloud Service Provider. 06 HOW TO SELL CLOUD SERVICES

7 ABOUT US This white paper is brought to you by ALVEA Services and Flexiant. ALVEA Services selected Flexiant s cloud orchestration software for its ALVEA Infrastructure Service. Flexiant provides ALVEA Infrastructure with an on-demand, fully automated cloud services provisioning solution which includes comprehensive billing, white-labelling and a single pane of glass infrastructure control. ALVEA Services ALVEA Services offers a suite of cloud and managed solutions across security, infrastructure and resilience. Available exclusively via the channel and delivered through one easy-to-use platform, the ALVEA range offers its partners a one-stop shop for a multitude of services. ALVEA Security, ALVEA Infrastructure and ALVEA Resilience & Continuity currently offer eight distinct services across the portfolio: Managed Network Security, Cloud Based Infrastructure, Managed Content & Application Delivery, Cloud Attached Storage, Satellite Broadband, DNS, Authentication & Anti-Virus. The ALVEA brand is an independent services offering for the channel backed,managed, and supported by technical expertise and infrastructure from COMPUTERLINKS. The suite will continue to be developed by COMPUTERLINKS to enable its partners to provide expertly delivered services to their customers. ALVEA Infrastructure ALVEA Infrastructure offers virtualised on-demand servers, designed to behave just like physical servers. Via the easy-to-use web control panel, enterprise class cloud infrastructure can be deployed in minutes - including the ability to provision cloud system, servers, and networks and then to only pay for what is used, whilst at the same time being assured that data is secure and always accessible. Designed to bring the full benefits of secure IT on demand to organisations of any size, ALVEA s cloud architecture gives access to IT infrastructure resource when it s needed, without all the expense and fuss associated with traditional solutions. Once finished, it s simply turned off until the next time it s needed. Flexiant Flexiant is a leading international provider of cloud orchestration software for on-demand, fully automated provisioning of cloud services. Headquartered in Europe, Flexiant s software gives cloud service providers business agility, freedom and flexibility to scale, deploy and configure cloud services, simply and cost-effectively. Vendor agnostic and supporting multiple hypervisors, Flexiant Cloud Orchestrator is a software suite that is service provider ready, enabling cloud service provisioning through to granular metering, billing and reseller management. Used by over one hundred organisations worldwide, from small hosters to large Managed Service Providers (MSPs) and Enterprises, Flexiant Cloud Orchestrator is simple to understand, simple to deploy and simple to use. Flexiant customers include Cartika, FP7 Consortium, IS Group, ITEX, and NetGroup HOW TO SELL CLOUD SERVICES

8 THIS WHITE PAPER IS FOR INFORMATIONAL PURPOSES ONLY AND MAY CONTAIN TYPOGRAPHICAL ERRORS AND TECHNICAL INACCURACIES. THE CONTENT IS PROVIDED AS IS, WITHOUT EXPRESS OR IMPLIED WARRANTIES OF ANY KIND. COMPUTERLINKS UK LTD Contact ALVEA w: e: t: +44 (0)

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