​As I speak with partners around the world, I receive a lot of questions about what key changes businesses need to make to become more profitable selling cloud solutions. One consideration I always talk about is around evolving the delivery model, based on partners I have had the opportunity to speak with who have been there and done that. There will be plenty of opportunities to learn more about this in depth at WPC, but the basics are that the cloud offers an opportunity to move from a pure project-based delivery model to a mix of project-based and managed services. This allows our partners to successfully execute a project up front while mixing and optimizing resources for the long-term customer relationship

​We know it can be done and we’re seeing a lot of partners finding success this way. One partner that is a great example in evolving its business for the cloud is Microsoft cloud solution provider of Online Services, RoseBud Technologies.
​Initially, RoseBud didn’t offer cloud services to its customers and saw the cloud as a threat. But when companies all around them started replacing on-premise infrastructure with cloud services, the company knew it had to adapt or risk irrelevance. RoseBud found that its business model remained appropriate in the cloud-based market but that its delivery model had to change. Rosebud made the necessary changes and not only addressed the threat to their existing business, it seized a new opportunity in the cloud that has paid them back in ways they didn’t originally imagine, boosting their revenue upwards to the tune of 40-60 percent!
​Let me share some of their story … (You can find the full story here.)

​By 2009, Microsoft was advising its partners to get ready for cloud services but, like many of those partners, RoseBud regarded the cloud as a threat, not an opportunity. It had built its business on Small Business Server and the cloud would take this away. Microsoft, not RoseBud, would service the infrastructure. Where would RoseBud make its money? RoseBud’s business model hasn’t changed much as a result of the cloud—but its delivery model certainly has. And making some of those changes have hurt, according to Greg Treanor.

"We cannibalized our customer base to shift to the cloud,” he says. “We went to our customers and told them that as a result of moving them to the cloud, we wouldn’t be on their premises as much. We’d support them at least as well as we did before, but we’d do it remotely, and more efficiently, so they shouldn’t be paying us as much. We introduced a reduced fee schedule. That was a tough nut for us to swallow.”

And it led to the hardest part of implementing the cloud strategy. Engineers who formerly visited two or three customers per day could now service six or seven customers daily through the cloud. But that meant that RoseBud needed fewer engineers. It also meant that RoseBud could only afford fewer engineers, since it was passing the productivity savings to its customers. It reduced its 25-person staff by about 40 percent.

RoseBud faced an obvious challenge in managing this change. In addition to reducing the personnel count, the company had to change the skill sets of those who remained. “The typical network admin with end-user support skills was no longer needed,” says Greg Treanor. “Those who made it with us through the transition were those who were willing to acquire new skills, in SharePoint, for example. We put some pretty compelling opportunities in front of our staff to encourage them to educate themselves.”

Even though they had some short-term pain in evolving their delivery model, they have become a more profitable and relevant business and are much more able to meet growing customer demands. Five years later, RoseBud’s customer base is up 100 percent. Employee productivity is up 160 percent, and revenue is up 40-60 percent. “The revenue gain took a while and wasn’t easy,” cautions Greg Treanor. “But we decided to adopt cloud service, and we stuck with it. In retrospect, it was absolutely the right thing to do. If we hadn’t done it, we wouldn’t be here today. Our business is more solid than it was 10 years ago.”
​We know customer demand for cloud and hybrid services is growing exponentially, bringing new, stable revenue streams for partners. You’ll learn more about this at WPC. I definitely encourage you to take advantage of its wealth of information by attending cloud-focused sessions, Phil Sorgen’s keynote and the cloud track keynote. You can also learn a lot engaging with other partners like RoseBud, so take advantage of the chance to have those conversations and unlock the opportunities of the cloud for your business.
​​