Whenever I deliver a Business Model Transformation Workshop in Latin America or Europe, I ask partners what they consider to be the primary challenges in building a successful cloud practice. Not surprisingly, they talk about the cultural shift to buying and selling IT as a service and the transformation to an annuity business model, with its impact on top-line revenue. As the workshop day advances, operational volume (i.e., marketing, sales, and operations) becomes part of the conversation. We think of volume and repeatability as the answers to the financial challenges introduced by this annuity-based model. But for most partners, driving the required volume and increased efficiency is a fundamental business transformation.

 
Cloud breaks with the way we’ve traditionally worked. With a cloud-based model, revenue is diluted and increases over the customer lifetime. Differentiation is often easier when we sell complex IT systems, yet cloud can foster commoditization. As partners embrace the cloud paradigm―with volume and consumption at its core—they’re seeing a reduction in one-off customized projects (and the associated upfront revenue) and an increase in standardized solutions, with standardized services attached. In that environment, volume can enable you to maintain and increase your top line. Volume, then, becomes the engine behind the transition to higher profitability and long-term sustainability.
 
Given the diverse business models in the partner ecosystem and the market segments served, volume can be interpreted differently from one partner to another. To some, volume may mean number of customers, or services offered, or the number of users. Cloud economics impact each model and segment differently. And every partner will have his/her own journey and strategy. But for many, the journey starts by defending traditional business and by driving volume in new-customer adds. Partners who’ve pursued this model are experiencing great success.
 
If volume is your strategy, how do you make it happen? You’ll find some ideas below. And we’ll develop them in future posts:
  • Marketing. Changes dramatically, if volume is the objective. The execution focus will be on increasing demand and converting web-educated prospects, and on reducing customer acquisition costs.
  • Sales. Based on an accelerated, low-cost, remote-driven sales process, a high-sales-volume partner needs marketing and sales to work as one engine. Focus on closing deals faster, upselling, and cross-selling.
  • Services and Solutions. The most impactful transformation happens here. Volume in services means packaging solutions and services and driving repeatability, which reduces costs and risk. As the services portfolio expands, areas like education and support have to evolve.
  • Leadership, Finance, HR. Cloud requires greater business connectedness to deliver operational efficiency. The entire leadership team should be aligned around strategic and tactical cloud plans. Investment in marketing, sales, services, talent acquisition, and compensation need to be examined together.
Clearly, the points above are not adjustments, but a reconceptualization of how you can generate and deliver value to customers. However, for some partners, these processes represent a fundamental transformation of their on-premises business.
 
Several partner success stories illustrate how cloud services volume can be achieved. Check out the best practices of Cloud Strategies and LiftOff and share yours. Where have you seen the biggest need for transformation?
  
Best of luck,