How to Transition into a Cloud Service Provider

by Jennifer Clark on January 25, 2017 · 0 comments

in Cloud Computing,ScanSource Communications,SMB,Technology

How to Transition into a Cloud Service Provider
Transitioning to a Cloud Service Provider (CSP) from a traditional managed service provider could be extremely beneficial if done correctly; however, there are several issues to consider. Below are a few points to weigh before making the switch.

How do I get started?

Evaluate and get in front of your audience.  Before you begin looking at what it will cost you, first you need to look at your existing customer base. Are they target market customers? If so, don’t wait for them to ask you about selling cloud services. Be proactive and start the conversation early before they’ve had a chance to consider the move for themselves. That way, when they start thinking about who to use for their cloud services, your name is at the forefront.

Start Small and Grow: You might want to consider the “cloud-in-a-box” solution, which can get you to market quickly. You’ll appreciate the access to pre-existing professional services, software and hardware that comes with these readymade solutions. If the initial start-up cost seems high because you’re missing hardware, software, or the right employee resources to launch your cloud offering, here’s another idea. Try to pair your existing customer base with a larger data center to promote their cloud services. If you can find the right partner with complementary business tenets, it’s a great way to get your foot in the cloud services door.

What to Look for in a Cloud Partner? Existing cloud service providers have a business model that consists of a complete set of cloud products. If you’re a new or up-and-coming IT company, it may make sense to adopt a similar business plan that includes low overhead, limited inventory, and decent margins.

You’ll want to look for a partner who can hold your hand and make sure key details aren’t missed as you take customers’ IT from on-premises to the cloud. However, if you do decide to partner with a cloud provider, your reputations will be synonymous, so make sure you’re synching up with someone who will protect your good name.

How Can I Be Successful?

Think about your customers. Consider your customers’ risks and have a plan to ease their minds. Some clients might be concerned with security and need to understand where their data is since it’s not physically on-site. If you draft a detailed set of operational procedures to outline processes such as moving off the cloud, your customers will rest easier during the transition. Other risks include competing service providers and the possibility of a single point of failure.

Differentiate yourself: There are a wide variety of IT services that comprise the cloud, so think about which ones you can specialize in to build expertise and stand out among the other companies. Some of the fastest areas of cloud applications include IT areas like mobile, Big Data, system management, security, data recovery/backup, and help desk. If you can add cloud services to any of these areas, especially to SMBs and SMEs, you’ll have a bigger opportunity for growth.

Additionally, think about the value-adds you can provide that will make you unique. To establish trust with your customers and truly be an expert in one area over another, hone in on one vertical market or customer segment that reflects your area of expertise and don’t offer everything to everyone.

Is it hard to be profitable?

Some people struggle with the pay-as-you-go model that accompanies cloud services. Because revenue can be difficult to predict with this method, you will need to examine your current recurring income and think about how to replace it if you move those IT services to the cloud.  Specifically, you need to find another way you can continue adding value, whether through selling only RMM (remote monitoring and management) services, or upgrading to more complex solutions and “as a service” products (infrastructure, software, platforms).

Keep in mind, to be successful and profitable, you’ll want to meet your customers’ needs of a highly automated cloud offering with self-provisioning services and tracking capabilities. Further, automated cloud services can also drive down labor costs and enhance profitability.

Whichever route you choose, educating yourself on the risks and costs — as well as time and resources involved  — will prepare you for the shift, and limit the surprises in becoming a cloud service provider.

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