By 2017, public cloud IT spending will reach close to $108B, which is 5X growth of the IT industry. You know that things change at incredible rates when innovation takes hold across the tech industry. Get ready now—cloud won’t be a trend any longer, it will be the new norm. Now is the time to invest and position yourself for the future.
Cloud-oriented partners are outperforming partners with other business models across the industry. They gain 1.3X more revenue per employee on top of the gross profit.*
Profit Pools: Making money in the cloud
Recurring revenue is the new success metric. Why is recurring revenue so powerful? Having long-term customers, predictability, cash flow, and higher company valuations can appeal to business owners and executives. According to IDC research, cloud-oriented partners reported achieving more than 1.6 times the recurring revenue than other partners.
Take a look at your existing business model and profit pools to plan your transition to the cloud.
- Transact – The resale of someone else’s hardware and/or software.
- Project Services – Fixed services that align with deploying hardware, software or application development.
- Managed Services – Standardized, tiered services that enable a partner to add value to their customer while building a recurring revenue stream (e.g., subscriptions or monthly billings).
- IP Services – The monetization of Intellectual Property through software development; packaged application or business process.
So, how do you get started? First, understand your profit pools. Cloud can be a great opportunity to build additional services that complement your business and further your relationship with your customer. Understanding how you currently serve your market by profit pool will give you the insight to help build cloud services into your business.
- Cloud partner profitability guidance
- IDC Successful Cloud Partners eBook (PDF download)
- Learn how to start a cloud practice with Microsoft Cloud Solutions
- Announced at WPC 2014: Cloud performance path
- New services offering helps you deliver value and build pipeline in the enterprise
Partner profitability stories
Dot Net Solutions
* IDC, 2014. Successful Cloud Partners 2.0., sponsored by Microsoft.