How to Become a Cloud Service Provider
If you’re an information technology (IT) services provider, or plan to become one, then there’s no better time to invest in the cloud. According to IDC, public cloud services spending will reach $128 billion in 2017, an increase of 25.4 percent over 2016 and growth is predicted to continue for at least the next five years.
“On top of the expanding market opportunity, offering cloud services is a great way to grow revenue and gain access to new customer markets,” says Chaitra Vedullapalli, cloud architect and CMO of Meylah.
Due to the way cloud licensing works, recurring revenue goes hand-in-hand with offering cloud services. From regular subscription fees to pay-as-you-go billing, providing cloud services enables you to create a steady stream of income. Add support payments to the mix and the cash flow scenario becomes even rosier.
On the customer markets side, IDC projects that the fastest growth in public cloud services spending will occur in professional services, media, retail and telecom. Each of those industries has a compound annual growth rate (CAGR) of over 20 percent, meaning that there’s plenty of room for new players to provide cloud services to these businesses.
If you’d like to get a piece of this action, then here’s some advice for your journey to become a cloud services provider.
Becoming a Cloud Services Provider
While both more revenue and a wider customer base are appealing, there are many challenges to face on your journey to become a cloud services provider.
To become a cloud services provider, you must have the right people in place to support both your customers and your own business. To build the right team, you will likely need to shuffle your existing team around and hire new employees to fill any gaps.
“Customers expect cloud providers to be able to transfer their data and applications to a cloud platform and then keep that platform available at all times with the right sizing, scaling and management,” says Vedullapalli. To meet these expectations, you will need employees who can perform the necessary tasks.
Click here to learn how to build your cloud services dream team.
As you begin your journey, it will be difficult to estimate your total cloud opportunity. And, until you figure out the opportunities, it can be hard to calculate your monthly recurring revenue (MRR) opportunity with cloud solutions. In addition, estimating the computing power needed for differently-sized customers and applications is difficult.
“Building a repeatable and sustainable cloud business model requires you to do experiments and make iterations until you determine the right approach for your business,” says Vedullapalli.
Click here to learn four ways to make money from the cloud.
The Customer Journey
Other hard to grasp concepts include cloud licensing, billing, provisioning and reporting, all touch points along your cloud services customer’s journey with you.
“Until you understand your customer’s end-to-end journey, it’s hard to understand what you need to provide to them each step of the way,” says Vedullapalli. Discovering what that journey looks like is a challenging, yet critical, step in the process of becoming a cloud services provider.
Click here to learn how cloud licensing works.
Compliance and Legal Issues
Depending on your clients, you might have to meet certain regulatory and compliance requirements. For example, healthcare businesses may need your systems to be HIPAA compliant while businesses that accept credit cards will need you to be PCI compliant.
In addition, you will need to establish service level agreements (SLAs) that will include penalties for your own business if you fail to meet the promises, such as uptime and response-time, detailed within.
Cloud Transformation Journey
In her free ebook, “How To Build A Million Dollar Business With Microsoft Cloud”, Vedullapalli provides a map that details the journey to offering cloud services.
If you take the journey to cloud services provider without a map, whether the one shown above or one of your own devising, your business will struggle to attract the right talent, investments and customers.
“Becoming a cloud services provider requires investments in changing your business model, business operations and customer acquisition techniques,” says Vedullapalli, “Following a map will assure thoughtfulness at each step, a habit that can help you avoid time-consuming and expensive mis-steps.”
Click here for an overview of the steps along this journey.
Wrapping it Up
While there are challenges to becoming a cloud services provider, the opportunities more than outweigh the risks. With careful planning and attention to the issues mentioned above, your journey to cloud provider should be, if not completely smooth, at least a less bumpy one. You can checkout special offers that are available to help your company to embark on a journey with Microsoft.
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This article, “How to Become a Cloud Service Provider” was first published on Small Business Trends