The keys to reselling cloud services

Wasn’t the cloud supposed to simplify things? Wasn’t it supposed to help build a new, profitable, sustainable revenue stream? Are you confused on how to take the next step?

You aren’t alone. Vendors, distributors and channel partners alike have been struggling with how best to capitalise on the cloud. Some cloud providers have a clearly defined objective and others seem to have invested more time into marketing a so-called cloud solution rather than actually building one.

The most important consideration when you are reselling a cloud service is you must be confident whoever you have partnered with won’t reflect badly on you or erode your trusted adviser status with your client.

Here are six key considerations:

Guarantees

A touchy subject for some providers, but these are questions you must ask of them and yourself. Are you partnering with a trusted and reliable cloud provider? Ask for client references (quite often this will be under NDA). Inspect their history. Have they had reliability issues in the past? What impact did this have on their customers? Do you know the physical makeup of their network, data centres and infrastructure and is it all fully redundant?

Will they guarantee reliability and if so to what extent? A 99.9 percent guarantee sounds okay but in reality could your customer afford to be off the air for almost 45 minutes per month with no recourse? (Note: 99.999 percent equates to 26 seconds per month.)  Finally, will the cloud provider put its money where its mouth is and guarantee uptime with a rebate structure?  

Security and compliance

This is a primary reason for outsourcing so it’s vital to get right. Does the cloud provider have security certifications in place? If so, are they of the standard your customers need?  What are the controls around security procedure and IT policy?  Are these audited to ensure compliance?  Many government and finance organisations require ISO27001 and ASIO T4 certifications to be in place and in some cases not just on the data centres but on the support teams themselves.

Where will your customers’ data be stored? Data sovereignty is a very real issue for many Australian companies and prevents a vast number of them from moving to public cloud services. In short, will your customers find it acceptable that by using the Patriot Act, US authorities can access their data?

Support

It’s sometimes a difficult one to ascertain up front but this is what will make for a harmonious relationship in coming years. Will the cloud provider assist with the migration of data or applications to the new environment?  When something goes wrong (and no company can completely guarantee it won’t) who do you turn to and how will your customers be supported? And what role in this process are you, the reseller, expected to fulfil?

One suspects that telling end users to access forums or online chat support won’t suffice so it is important to remember: you usually get what you pay for!  

Go-to-market strategy

What do you actually want to take to market? Public? Private? Disaster recovery? What type of customers do you currently have and does this differ from who you will target? Can you bundle cloud services with existing products and solutions?

Are you able to (or do you even want to) white-label the cloud service, or are you restricted to sell under the cloud provider’s brand? Does the cloud provider offer marketing, pre-sales and training support? Can your sales staff effectively articulate the benefits of a cloud solution?

If they can, how will you incentivise your staff to sell a subscription-based revenue stream versus a one-off product sale that will generate revenue and gross profit instantly?

Cloud provider relationship

Does the cloud provider sell to end users and to the channel? Is it a problem for you if they do and what is the compelling reason an end user would go to you vs direct to the cloud provider? Is there an ongoing revenue stream, or does the cloud provider offer rebates on the original sale, or a combination of both?

Client relationship

How do your customers pay for the cloud service? Are they billed directly by the cloud provider or do you still “own” the relationship? Do your systems have the ability to invoice in an annuity or PAYG environment? Are end user inquiries routed through you or do they go direct to the cloud provider?

More questions than answers?

At the end of the day “the cloud” is a virtualised environment made up of physical components that has a support and delivery layer wrapped around it. Therefore, it is important that you be comfortable with all elements of your new proposed cloud service. While there are a lot of considerations here, most should be relatively straight forward for a cloud provider to answer.

However some (such as your direction, customer engagement level, etc.) are questions you will need to work out for yourself. The most important thing of all is to make a start on building this high-margin, ongoing revenue stream. Your choice of cloud provider will dictate just how easy or daunting this will be.

Adam Chicktong is the GIS and services director for Avnet A/NZ.