On the road to digital transformation, cloud computing is an invaluable companion. Worldwide spending on public cloud services and infrastructure will more than double between 2019 and 2023, according to IDC. That’s because the cloud allows businesses of every size to focus on innovation, respond to changing customer demands, streamline processes and reduce costs—all while meeting security and compliance mandates.
Yet embracing cloud doesn’t guarantee success. Without a plan, the right expertise and diligence in measuring results, businesses can fumble their cloud efforts and miss the mark on intended outcomes. That’s why many companies—93% of those that participated in a recent Frost & Sullivan study—turn to some sort of solution or service provider for guidance in cloud adoption and migration.
But channel partners make mistakes, too. To fully capitalize on the growing cloud opportunity, partners need to plot their cloud course with intelligence and attention to detail. Many of the most common pitfalls faced by partners in developing their cloud practices fall in the category of business strategy, not technology.
Here are six pitfalls solution providers should watch for:
Don’t put planning on the back burner
According to research by The 2112 Group, almost half of solution providers (47%) don’t have cloud or service plans to guide their daily operations, and 59% lack strategic plans for their growth and development.
Without a plan—a blueprint for a company’s mission, value propositions, organizational structure, milestones, goals and investment objectives—partners lack direction and a clear road map for their cloud practices.
Don’t ignore sales and marketing
Having one or the other just won’t do; solution providers need both, with formal business plans and dedicated personnel for each. 2112 research has found that more than half (56%) of solution providers don’t have a sales plan and 72% don’t have a marketing plan or the capacity to promote their services.
Based on nearly a decade of industry research, 2112 has concluded that full-time, cloud-dedicated salespeople should account for more than 10% of a partner’s workforce, while partners should be spending more than 10% of their gross revenue on marketing.
Don’t expect compounding revenue right away
The lure of the recurring revenue model lies in its predictable cash flow, but that steady stream of income doesn’t happen overnight. Partners need to keep their expectations in check and learn how to manage the financial ebbs and flows that come with this business paradigm. Patience is key.
Avoid taking a narrow view of your cloud portfolio
Most partners now offer cloud services, but many remain mired in commoditized offerings such as backup/recovery, productivity apps, endpoint security and storage. Offering more cloud services—and higher-value ones like virtualization, mobility management and business applications—will increase partner profitability over the long haul.
Also, it’s important for solution providers to have expertise across all cloud deployment models—public, private, hybrid and multi-cloud—especially as the latter two gain traction among businesses.
Don’t focus only on winning new customers
Drawing new clients into the fold is imperative of course, but partners that fail to keep existing customers coming back for more are essentially spinning their wheels. Research by Boston-based management consultancy Bain & Company has found that an increase of merely 5% in customer retention can boost an organization’s profits by at least 25%.
Meanwhile, The 2112 Group has concluded that partners with retention rates under 95% put both their viability and profitability in jeopardy. To boost retention, partners should emphasize business outcomes, re-examine and reiterate their value props, communicate regularly with customers and solicit their feedback, as well as deliver a consistent, high-quality customer experience.
Don’t miss the big picture
Guiding businesses through digital transformation via the cloud involves more than just deploying and managing technology. Partners need to grasp what’s required from a cultural perspective as well. Client staffs—from top-line executives to rank-and-file employees—need to understand and implement new processes, security protocols and operational guidelines. To get wholehearted buy-in, solution providers must convey what the customer stands to gain from the cloud: a more efficient, profitable business.
See how your business measures up
To get a clear picture of how your company’s cloud adoption ranks in relation to your peers, try the 2112 Cloud Altimeter—a cloud assessment tool exclusively for Ingram Micro partners. By answering a few questions about your company and its cloud practice, this tool will generate a comprehensive report on how your business stacks up to others in the same class. To learn more, visit the 2112 Group Cloud Altimeter.