By now, you’ve likely heard that cloud spending is expected to exceed $500 billion by 2020.
But the reality is that many partners still aren’t ready to take full advantage of the customer demand, and selling the cloud alone won’t be enough to unlock the type of growth we often talk about.
Business models like managed services and IP development are likely to bring in the majority of revenue. But, how do you get there? Luckily, there are several ways you can start working toward those higher profit business models right now.
One option I often recommend is the Cloud Solution Provider program (CSP), which helps you build your managed services model. Ultimately, it’s a licensing model, but there are three key opportunities that set it apart from others you might be more familiar with.
Opportunity 1. More frequent touchpoints
When you look at the differences between CSP and other licensing models, one thing stands out: the monthly billing cycle requires more frequent touchpoints with your customers. Why is that a good thing? It allows you to stay closer to your customers, build stronger relationships with them, and position yourself as a trusted advisor. That means more opportunities to move beyond a traditional resale or project services business model into a more profitable managed services model.
Opportunity 2. Support = Insights to evolving customer needs
When you provide always-on support (either directly, or by partnering with an indirect provider) services, you become an indispensable resource for your customers. By managing workloads and stepping in when outages or breaches occur, you’ll quickly become a key ally in your customers’ daily business. This level of service also gives you the chance to identify pain points your customers may be experiencing, which means more opportunities to offer value-added services on top of the licensing you provide through CSP.
Opportunity 3. Recurring revenue
When you start billing monthly, you’re not only helping your customers stay on budget with predictable IT costs, but also generating recurring revenues for your own business. When you combine that with value-added services like data backup, security, or assessments, that’s where you start to tap into that $500 billion cloud opportunity.
Additionally, for partners who want to build a cloud business model with higher profit margin, leveraging CSP allows you to package your own managed services on top of your subscription, and fully manage the customer experience. Adding these monthly recurring charges for the managed services that you offer not only increases your share of customer wallet by selling licenses, it also adds a new recurring revenue stream for the duration of the customer’s subscription.
Overall, Microsoft’s Cloud Solution Provider Program provides you with the resources you need to start providing managed services, which can significantly boost your margins.
Want to learn more? Check out the Cloud Solution Provider Program and see how you can go beyond selling licenses to developing more rewarding relationships with customers — all on the way to building a more profitable cloud practice.
How has the Cloud Solution Provider Program helped your cloud practice become more profitable? Share your thoughts in the comments below.