differentiating cloud business
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How can I differentiate my cloud business in the digital era?

4 Mins read

Selling and reselling cloud services is a trending business these days. And for good reason: Cloud Service Providers (CSPs) have a wide range of opportunities in it to make profits. Companies are increasingly shifting to the cloud, making the cloud market one of the biggest disrupters in the tech industry.

The cloud market is flourishing

The public cloud market will reach $331.2 billion by 2022, from $182.4 billion in 2018.Gartner.

That’s around 20% market growth year-over-year.

“Through 2022, Gartner projects the market size and growth of the cloud services industry at nearly three times the growth of overall IT services.”

Sid Nag, research vice president at Gartner.

94% of companies around the world are already using the cloud. And 84% of them have a multi-cloud strategy.RightScale

These statistics by leading market analysts show that the cloud market is flourishing, and it’s not going to halt anytime soon.

It’s cool to be in the cloud business

Considering the growth of the cloud market and its adoption among enterprises, selling the cloud seems cool.

The count of businesses that are choosing to sell cloud is significantly increasing day by day. All they need to do is to partner with a cloud provider like Microsoft, Amazon Web Services (AWS), Google, and become a CSP. Microsoft says that over 7,500 new partners join its partner ecosystem every month.

By reselling cloud services, the CSPs can compete in the market and earn significant profits. They can acquire new customers who need cloud services or upsell their services to existing customers.

So yeah, the cloud business is cool!

But, what’s not so cool is the tough competition that CSPs face today in the cloud market. No doubt the cloud market is growing, but the number of cloud sellers is also increasing.

In the era of digital transformation, not every cloud seller can crack the code of differentiating itself from the competition.

Here, we are not discussing the plain or barely-over-the-line profits that most of the businesses make. We are discussing the kind of profits that make cloud sellers stand apart from the crowd, among the businesses that make the highest profits.

Standing apart from the competition in the cloud business

If you are a cloud service provider looking to stand apart from the crowd and differentiate yourself in the cloud business, this article is for you. Following are the best ways which every CSP should follow to optimize their presence in the cloud market.

1. Sell multi-cloud services

RightScale’s 2019 State of the Cloud Report says that 84% of organizations in 2019 have a multi-cloud strategy. What this means is that more and more organizations are opting for multiple cloud services from different cloud providers on the basis of their requirements.

By selling multiple cloud services, you have the chance to gain more customers. Generally, the customers prefer to have a single service provider for all the services they use, rather than buying an Azure offering from seller A, AWS offering from seller B, and Google Cloud offering from seller C.

Hence, it is important to sell multi-cloud services to make a difference in the cloud market.

selling multi-cloud services

2. Offer bundled solutions

Packaging a number of different services and software into bundles and selling them at a lower price as compared to selling them separately, works well for almost every business.

selling bundled solutions

The cloud services have a very thin margin. Also, the pricing of these services keeps on decreasing. By selling these in bundles, you can add value to the raw cloud infrastructure of the customers. This can increase the margin and help you sell more services.

Taking an example of a car wash agency. The price of their ‘Basic Wash’ is $5, whereas the additional services cost $2 each. On the other hand, the ‘Premium Wash’ is priced at $8, which includes Basic Wash plus wheels wash, polish, and towel dry.

Most of the customers will go for the premium wash because it offers more value at a lower price. Similarly, bundling cloud solutions can help increase revenue.

3. Expand breadth of the portfolio

Increasing the breadth of the portfolio is a crucial step towards the growth for SMBs. You can add more cloud services to your portfolio of products to increase your market share.

For example, if you are selling Microsoft Azure, consider adding Microsoft 365 or G-Suite to your product line.

This will not only help you to acquire new customers but also open new market opportunities.

expanding portfolio of services

4. Develop Intellectual Property (IP)

There are several benefits of developing an IP for your business. It can help you protect your business assets, which can eventually become a key to drive profitability.

The IP of your business will also enable you to generate long-term value. Hence, you should develop an IP that can be embedded into your solutions.

developing IP

5. Automate delivery of cloud services

Selling multi-cloud services and bundled solutions and expanding the breadth of the portfolio will help you to explore new opportunities in the market, sell more solutions, and reach more customers. However, these will also bring a number of challenges for you.

It’s a daunting task for CSPs to manage the billing of all the customers when they are choosing multiple cloud services or buying a bundle. Every service has different models for pricing, usage, and duration. Things become really complex, affecting business productivity and increasing operational costs.

In such a scenario, a cloud service delivery automation platform like RackNap can make things easier. RackNap is a billing and provisioning automation software that can automate the complex processes involved with the delivery of cloud services. It can help you integrate and sell the cloud of your choice while reducing the operational costs.

RackNap also provides a white-labelled marketplace and digital marketing activities. This eliminates your need to handle technicalities, allowing you to focus on innovation and develop your IP.

automation of cloud services delivery

Key features of RackNap for cloud service providers (CSPs):

  • Support for billing structures based on different parameters like bandwidth consumption, disk storage consumption, CPU hour utilization, etc.
  • Support for recurring, non-recurring, pre-paid, post-paid, free, one-time, pay-per-use or contract-based billing models.
  • Automatic credit distribution for late payment, pending payments, etc.
  • Auto-escalation of support tickets for minimum TAT and to meet the SLAs.
  • Sales module integrated with support and billing modules.
  • Ability to create promotions and discounts and their application on the chosen services.

These are just a few features of RackNap. The platform has several more capabilities to help you boost the recurring revenue.

In a crowded Cloud market, it is very vital for CSPs to differentiate amongst the rest by incorporating some of the strategies listed above.

If you need to know more specifics on how to implement these strategies and become successful, you may write to us at [email protected].

Team RackNap is attending Microsoft Inspire in Las Vegas, Nevada from 14-18 July. Schedule a meeting with us.

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About author
Munesh, the founder and Managing Director of RackNap, has an overall expertise of over 16 years in the hosting, datacenter and the cloud industry. Being a veteran with deep industry knowledge, he understands the pain points and needs of these industries. RackNap - his brainchild, is thus an in-house developed and extensively tested product to provide completely automated business processes and service delivery.
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