How Do Partners Make Money in this New Cloud World
As the world has moved to a cloud-based IT model, the rules of the game have changed. This has led to a different way of thinking for CIOs and IT managers. Let’s face it, an IT manager doesn’t wake up and say, “I have to buy some virtualization today,” or “I have to buy a Disaster Recovery as a Service offering.” Rather there is a comprehensive adoption lifecycle that IT managers must go through as they determine what services they need and how to migrate these services to cloud. Within certain phases of the lifecycle, partners have sizable revenue opportunities, especially before and after the service selection phase.
Phase One: Business Model Evaluation
It starts with business drivers. Prospective cloud customers must determine what business model changes are required, the lines of business requirements that need to be considered, and what organizational changes may be necessary. Evaluating these business and financial aspects are key to consider in their cloud migration plan. Partners must help the customer determine what is most important in making their journey to cloud and how to build a practice around that initial phase of the cloud adoption lifecycle. Partners’ consulting services should focus on a cloud business case justification that helps their customer understand the project plan and investment, with a 3-5 year plan and the ROI/business benefits of moving to cloud.
After going through a business case evaluation of cloud, customers must also consider their infrastructure requirements. The infrastructure assessment should answer questions such as: how will cloud impact fixed facilities? What will it do to mobile users? What is the knowledge level of the business stakeholders on the applications that move across the organization? What applications need to be enabled on the network?
In order to recognize the total cost of ownership (TCO) benefits of cloud, customers must rationalize and understand the type of workloads that need to move to public, private , or hybrid clouds, and what the network needs to look like to support those applications. This is a ripe area for partners to generate revenues through formal cloud infrastructure assessments.
Phase Two and Three: Application Readiness and Service Selection
The next phase of adoption is around application readiness and this is another area where partners can have a consulting role. Partners can help customers do a sweep of all the applications being consumed and determine whether they are high value or commodity workloads, and how each should be treated in the cloud world. The application assessment will determine the security requirements and policies for those workloads, and provide a migration plan to move applications to a new environment.
It’s only after the customer goes through the business drivers, and infrastructure and application assessments, that the service selection phase takes place. When deciding what partners’ service to choose, customers must ensure the service meets their reliability and compliance needs, such as PCI and HIPAA, as well as consider security, global and local regulations.
Phase Four: Service Optimization
Once the service selection has taken place, partners can help customers optimize their cloud service and help with the adoption and education of the users on how to consume cloud. Partners might help customers gauge the user experience with a pilot release of the service to a limited number of users, and then move other users on as the service is refined. This requires an evaluation of the overall ROI of the service to determine if they are realizing the savings, and then governance to ensure the investment met key performance indicators (KPIs) that were established at the onset. Similar to post-sales support, this is the final opportunity in the cloud lifecycle for partners to provide cloud optimization services.
The Revenue Opportunity for Partners
Each one of these cloud lifecycle adoption phases represents a revenue opportunity for partners, where they can build consulting or services practices around each one. That’s where the dollars are. Many partners think going to the service selection phase first provides an immediate revenue generating opportunity, however that is the phase where partners will make the least amount of money. It’s all about the evaluating the business drivers, infrastructure and applications before the actual service sale that provides partners a way to drive revenues.
If you map the partner opportunity to each phase of the cloud adoption lifecycle, it becomes clear that partners must first help customers develop a comprehensive business plan that justifies how they move to public private or hybrid cloud solutions. Just by helping assess the customer cloud readiness, partners can get in front of shaping RFPs, creating business cases, and positioning themselves to win further deals for consulting and “as a service” offerings.
I’m interested in hearing your perspectives on this view of the cloud adoption lifecycle and if your practice is capitalizing on these opportunities today, so please leave your comments below.