Adjusting Your Channel Operations for Cloud Resale

Written by David Neely on Thursday, September 13th 2018 — Categories: Cloud Hosting, IT Channel

David Neely is the VP of Channel for Green House Data. Connect with David on LinkedIn or Twitter.

The IT channel is taking ever bigger bites out of the cloud computing market. Only 39% of companies report sourcing their cloud services directly from Cloud Service Providers, leaving the remaining 61% to a mix of CSPs and third parties, with 10% coming primarily from third parties alone, according to a CompTIA survey. Meanwhile, IaaS, Security as a Service (SECaaS), and SaaS all offer higher average MMR than Contact Center as a Service, Data Networks, and Voice Network services, according to Avant.

If you’re looking to shift some of your clients and sales towards the cloud, you need to adjust your operations accordingly or risk losing customers to direct sales or competitors.

Here are the biggest changes you’ll need to make to your channel sales and IT operations in order to maximize on your cloud resale strategy.
 

Find Partners Who Can Fill All Cloud Niches

You need hosting providers and/or managed service providers who offer a complete cloud stable of IaaS, PaaS, and SaaS platforms to meet your customer needs.

That might mean a combination of managed cloud service providers who can operate hyperscale cloud IaaS and PaaS like Azure and AWS; it might mean you hire IT staff who can manage those environments in-house for your channel org while your partner directly manages those hyperscale players; or it might be a mix of niche cloud players, MSPs, and hyperscale providers.

This last option is usually the best way to go, but regardless you’ll want full geographic coverage, SaaS like Office 365 or Google apps, database options like MongoDB, and support for containers, microservice architecture, and other cloud-native technologies.

 

Establish Your SLAs

With a mix of Cloud Service Providers (CSPs), you’ll have varying degrees of Service Level Agreements to juggle. Create a spreadsheet that compares their coverage and use it as a baseline for your customer contracts. You’ll want to create your own SLA that doesn’t exceed the provider’s ability; you also want to build in some lead time if you are the first line of support and troubleshooting should an outage or other service issue occur.

 

Structure Your Contract Terms

You may be used to a per-project contract or longer contract terms of several years for support or ongoing services. In the world of the cloud, month-to-month or even minute-to-minute contracts are common. You can still base your contracts on an annual or longer basis, but be aware that the on-demand infrastructure offered by the cloud comes with a new billing model.

As a broker you’ll want a longer contract term, but month-to-month is something you’ll have to consider for some customers. Keep close track of the length of your service provider contracts. If your customer base can not support the full duration, you could run into cash flow problems.

Because cloud services are scalable, you can also keep track of end user consumption and bill your customers within their contract terms based on their actual usage. Billing itself can come directly from the service provider to the end user, or you can be an intermediary. If you are using a variety of service providers for a single client, it is probably simplest to bill them yourself with an aggregated invoice.

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Who Supports What?

Similar to the nature of cloud security, different components of the cloud stack may be supported and managed by different entities, especially in a resale situation. As mentioned above, you want to structure your SLA so you can respond to your customer and communicate with the service provider based on the CSP’s own guaranteed response times. If you are the primary support provider, this becomes even more critical.

Beyond support, you need to set clear expectations with the client and with your CSPs for who provisions the cloud infrastructure, who installs and maintains applications, and who maintains QA and upholds the SLA. Some cloud deployments may require custom hardware or special network configurations.

Other cloud configuration and support considerations include:

The processes behind your operational structure may change between customers depending on what they need to put in the cloud, so you need to carefully document and clearly explain all stakeholders (unless you white label a solution, in which case just be sure to cover your bases on your SLAs and service and support information).

 

Be sure to also periodically review your overall cloud spend and infrastructure, both within your organization and with your CSPs, to minimize sprawl and look for efficiency gains, security holes, or performance problems. You also want to monitor your KPIs to make sure you remain profitable.

Adding cloud services to your portfolio may even enhance your ability to sell more traditional voice and data services. The Avant survey linked above also found that while only 29% of respondents sold cloud-centric services like IaaS, SECaaS, Office/Productivity apps, and connectivity, that 29% was responsible for 42% of new Voice MRR and 51% of new Data Network MRR sold.

The cloud is without a doubt a major piece of the present and future of IT channel sales, and you’d be wise to capitalize on it. But it doesn’t come without some real work on your overall processes, as it represents a new paradigm in how services are provisioned, supported, delivered, and administrated.

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