Adjusting Your Channel Operations for Cloud Resale

David Neely is the VP of Channel for Green House Data. Connect with David on LinkedIn or Twitter.

The IT channel is taking ever bigger bites out of the cloud computing market. Only 39% of companies report sourcing their cloud services directly from Cloud Service Providers, leaving the remaining 61% to a mix of CSPs and third parties, with 10% coming primarily from third parties alone, according to a CompTIA survey. Meanwhile, IaaS, Security as a Service (SECaaS), and SaaS all offer higher average MMR than Contact Center as a Service, Data Networks, and Voice Network services, according to Avant.

If you’re looking to shift some of your clients and sales towards the cloud, you need to adjust your operations accordingly or risk losing customers to direct sales or competitors.

Here are the biggest changes you’ll need to make to your channel sales and IT operations in order to maximize on your cloud resale strategy.
 

Find Partners Who Can Fill All Cloud Niches

You need hosting providers and/or managed service providers who offer a complete cloud stable of IaaS, PaaS, and SaaS platforms to meet your customer needs.

That might mean a combination of managed cloud service providers who can operate hyperscale cloud IaaS and PaaS like Azure and AWS; it might mean you hire IT staff who can manage those environments in-house for your channel org while your partner directly manages those hyperscale players; or it might be a mix of niche cloud players, MSPs, and hyperscale providers.

This last option is usually the best way to go, but regardless you’ll want full geographic coverage, SaaS like Office 365 or Google apps, database options like MongoDB, and support for containers, microservice architecture, and other cloud-native technologies.

Establish Your SLAs

With a mix of Cloud Service Providers (CSPs), you’ll have varying degrees of Service Level Agreements to juggle. Create a spreadsheet that compares their coverage and use it as a baseline for your customer contracts. You’ll want to create your own SLA that doesn’t exceed the provider’s ability; you also want to build in some lead time if you are the first line of support and troubleshooting should an outage or other service issue occur.

Structure Your Contract Terms

You may be used to a per-project contract or longer contract terms of several years for support or ongoing services. In the world of the cloud, month-to-month or even minute-to-minute contracts are common. You can still base your contracts on an annual or longer basis, but be aware that the on-demand infrastructure offered by the cloud comes with a new billing model.

As a broker you’ll want a longer contract term, but month-to-month is something you’ll have to consider for some customers. Keep close track of the length of your service provider contracts. If your customer base can not support the full duration, you could run into cash flow problems.

Because cloud services are scalable, you can also keep track of end user consumption and bill your customers within their contract terms based on their actual usage. Billing itself can come directly from the service provider to the end user, or you can be an intermediary. If you are using a variety of service providers for a single client, it is probably simplest to bill them yourself with an aggregated invoice.