Profitability for cloud sellers
CloudCloud ProvidersCloud Service ProvidersCSPs and MSPs

If I am one amongst the million selling cloud, is there a chance for me to survive?

3 Mins read

Over the last few years, the adoption of cloud has significantly grown to become a norm among both – large businesses as well as SMBs. According to RightScale’s 2019 State of the Cloud Report, 94% of enterprises around the world are using the cloud. Further, Gartner predicts that the global public cloud services market will be worth $331 billion by 2022.

These statistics show that the cloud is the talk of the town.

Profitability for cloud sellers in 2019

With the growth in cloud adoption, a lot of service providers see opportunities in selling cloud to other businesses. Hence, more and more of them are entering into the managed cloud services’ business.

According to a recent survey by RBC Capital Markets, the revenue of certified Microsoft Azure channel partners increased by approx. 55% on a weighted average basis, in 2018. These partners are further expecting growth of approx. 50% in 2019.

In addition, Microsoft reported that more than 7500 partners are joining its partner ecosystem every month. This ecosystem helps the company to generate 95% of its commercial revenue.

These are the stats of Microsoft’s partners alone, which show that CSPs (Cloud Service Providers) are significantly making a profit with the cloud business.

With a number of businesses selling cloud, from the top cloud giants to the service providers to the new entrants, the competition is tough now—both on the technology and the business front.

Challenges faced by CSPs in selling multi-cloud solutions

As per IBM, 85% of organizations already have a multi-cloud strategy. And the remaining ones who don’t use multi-cloud currently, have plans to use it soon. By 2021, around 98% of organizations will be using multi-clouds.

If you are a Cloud Service Provider and are avoiding selling multiple clouds, then you wouldn’t be able to take a bigger bite from the cloud business.

It is a must-do thing for CSPs today to sell bundled cloud offerings so that they can sell more and acquire new customers. This way, you can meet multiple requirements of the customers and can offer them customized cloud offerings.

Since the organizations are opting for a multi-cloud strategy, the cloud giants are innovating their cloud services to provide flexibility and freedom of choice to their customers.

These innovations allow organizations to use a set of capabilities from vendors of their choice but make things difficult for cloud service providers or sellers. It becomes complicated for them to manage multiple cloud services at a single place.Profitability for cloud sellers

Challenges also arise for sellers when customers choose to purchase different cloud services from major cloud giants. For example, a customer buying cloud storage offering from Microsoft, and cloud backup offering from AWS. In such a scenario, the cloud sellers can’t effectively bundle the offerings to provide an integrated solution. It is not an easy task to maintain control over all such services and have a transparent billing. Thus, it becomes difficult to drive profitability for cloud sellers.

Customers can choose to buy cloud services in multiple ways, like on-demand, reserved capacity, prepaid, as well as via enterprise agreements. CSPs often get stuck in a complex cloud billing mechanism.

Moreover, the CSPs need to have the required resources and expertise to handle the customers and their issues related to specific cloud offerings. Management of data, applications and processing of a multi-cloud business demands more attention, better control, and visibility for seamless performance.

Competition among CSPs is getting tougher

competitive cloud marketThe stats shared in the introduction section show that the competition is increasing among CSPs as more and more businesses are becoming partners of the leading cloud providers and are opting to sell cloud.

In this competitive cloud market, if a CSP doesn’t stand apart from the crowd by simplifying the complexity and making his business processes seamless, he wouldn’t be able to make the most out of his business.

Making the most out of your cloud business

competitive cloud marketWith this scenario of the multi-cloud trend, complex billing, and use of traditional models to deliver cloud services, the CSPs can’t really focus on their business and work on producing innovative services.

When they work day in and day out to deliver cloud services without automation and via traditional business model, they find it difficult to meet the demands of existing customers and acquire new ones in the competitive cloud market.

Cloud business and profitability for cloud sellers aren’t that easy today!

In order to stand out and shine among the million others selling cloud services, one needs an automation platform that can help him to provision cloud services from any cloud provider without any complexity. It should also help automate other business processes involved in selling cloud solutions.

RackNap – Cloud service delivery platform, with automation

A cloud automation platform like RackNap can automate all the complex processes such as provisioning and billing of cloud services. It can help CSPs to reduce operational constraints, while integrating and selling the cloud of their choice.

Cloud service delivery platformUsing RackNap, CSPs can bundle the cloud services, whether it is Azure, AWS, IBM Cloud, Office 365, or any other offerings, and then sell them to their customers.

In the competitive market of cloud business, RackNap is significantly helping service providers to acquire new customers and retain them. It helps customers partners with strategic marketing capabilities as well, by conducting digital marketing activities like webinars, events, blog posts, etc.

To know how exactly RackNap works and helps you stand apart from the crowd, write to us on [email protected] or book a demo today.

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About author
Sabarinathan, SVP of RackNap heads product and technical delivery functions. He has over 18 years of experience in the IT industry with specialization in cloud services delivery. He believes that to be successful, cloud service providers need – right business strategy, right automation platform along with skilled manpower.
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