Ask most business leaders what they need to make better decisions, particularly with emerging technologies or markets, and you tend to hear one common answer: more data. Before taking bold steps or shifting strategies, the smart money is on understanding what’s selling, who’s buying and where the competition is the heaviest.
Answering questions like these was the primary motivation for building Cloud Altimeter, a diagnostic tool for channel partners developed by The 2112 Group, with the support of Ingram Micro Cloud and Microsoft. With Cloud Altimeter, we look to give solution providers a measurable competitive advantage in the white-hot cloud computing market.
After a year in the field, the results have been impressive. The data shows Cloud Altimeter is helping solution providers climb higher in the cloud market by giving them unprecedented visibility into where they stand relative to other solution providers across the U.S. market, as well as their competitive position relative to resellers in their region. That’s why we’re doubling down with an improved Altimeter tool this year, along with a new baseline survey, to enrich the dataset that backs the Cloud Altimeter reporting.
The timing for this effort couldn’t be better. From the research data we’ve gathered already through Altimeter and benchmarking studies, we see solution providers earning, on average, around 15% of their gross revenue from the sale of cloud products and services. What’s more impressive than that, however, is this: The growth curve for such sales indicates that cloud should account for more than 30% of partner revenue within four years.
Like most glowing news about technology markets, though, the reality is a bit more complicated and nuanced. Yes, partners are realizing enviable bumps in recurring revenue as the popularity of cloud computing energizes end-user buyers with promises of greater efficiency and added functionality. But a fair bit of the traction partners have seen in the cloud has been opportunistic – the product of a chaotic marketplace rather than a formal sales and marketing strategy.
According to our data, nearly three-quarters of solution providers don’t have a cloud business plan, more than two-thirds don’t have cloud sales goals, and more than one-half don’t have plans for growing their cloud practices.
The addressable cloud market is growing too fast for most of these ill-prepared channel partners, outstripping the average solution provider’s capacity to deliver. Partners are chugging along in hopes of doubling their take in the cloud. Customers, meanwhile, are looking at the possibility of tripling the cloud share of their IT spending. That disconnect endangers the concept of cloud transformation for the channel, a concept that’s vital for the long-term financial health of partners.
This is where Cloud Altimeter shines. With the tool, solution providers move away from a haphazard approach to cloud sales and see in graphic detail how well their cloud revenue, profit, product selection, sales capacity, marketing efforts, customer engagement effectiveness and growth potential compare to those of their peers across the United States and regionally.
With this data in hand, Altimeter users can better plan their cloud development. Like all good strategic plans, cloud investment must begin with good data and cogent analysis. The Altimeter tool provides this level of insight. As part of the Altimeter program, Ingram Micro, 2112 and Microsoft are also giving solution providers additional guidance and training on using the data to energize their practices, beat the competition and succeed in cloud computing.
Altimeter is exactly the kind of effort that can elevate solution providers to new and greater heights in the cloud. Better yet, Altimeter is free and open to all solution providers. In addition, 2112 publishes periodic reports on the intelligence generated by the tool.