Reasons to own and not resell Cloud Services

terry pullin

As the Cloud Computing bubble continues to swell, traditional VAR’s, IT Support & MSP’s wanting to capitalise on the opportunity face a choice, resell a service from another provider OR invest in their own Cloud Computing platform.

The option to resell a service is appealing, no need to invest in hardware, virtualisation technology, colocation, network services or need to skill up engineering teams. You also get the benefit of selling a platform that is instantly available. Just buy from A and sell to B, something all hardware & software resellers do on a daily basis.

However, most IT Support and Managed Service providers would, I’m sure, rather own and operate their own platform. These companies build their reputations on their engineering expertise and wouldn’t buy an engineer from A to sell to B, they have the skills to provide their service of choice to their customers and this obviously has its benefits over “being the middle man”.

When it comes to Cloud Computing services, SaaS, Server Hosting, IaaS or PaaS all the same reasons the IT Support & Managed Service providers don’t resell engineering resource apply. These reasons are often very different and specific to every business, but most follow some common themes:

Make more profit – Like engineering services, once you’ve covered your overheads you start to make profitOnce you reach this critical mass profit margins will always be greater than for resellers. Interestingly once you’ve built your cloud platform you may be able to attract resellers of your own – further expanding your sales force and growth potential.

Provide better uptime and SLA’s – Companies used to selling themselves on the value they add to their customers IT operations, like to know that when they tell a customer “we proactively monitor your systems to avoid downtime” they can deliver on their promises. If you own your own platform, with decent kit in a decent data centre you control how it operates and implement your processes and procedure to keep the platform available to your clients.

Develop industry vertical specific solutions – Almost every VAR, IT Support or Managed Service provider has some focus on an industry vertical. Be it meeting regulations for finance companies & law firms, keeping costs low for not for profit & government organisations or dealing with data volumes for media businesses owning your own Cloud Services will let you tweak the services to best suite your customers and prospects needs.

The great thing about this list is it can go on and on and follow a range of different paths all specific to either customers or suppliers, I love working in the IT Industry for that very reason.

The problem is, generally building a Cloud Platform is challenging. Some of the upfront costs involved are unreachable for some businesses. Technical understanding of some of the technologies involved is not owned by everyone. Though the “Cloud” word is used so much these days, not everyone knows how it can benefit their clients and how to sell those benefits to them.

YourCloudPlatform from Backbone Connect has been specifically designed for the Channel community to provide an easy, cost effective solution to allow VAR’s, IT Support & MSP’s to own and operate their own Cloud Computing platform.

If you own a VAR, IT Support or MSP business and would like to own your own cloud platform this is a link to where you need to start

I’m sure you don’t’ need to hear again about the regular outages experience from some of the biggest players in the Cloud market. It’s an awkward meeting with a client when their systems have been down if you have to explain that “it’s your suppliers fault”. How many times can you have that meeting before the customer is going to explore other avenues?

If you resell Cloud Services you’re only ever going to make the margin the provider allows you, my research in the industry shows this is generally between 10 & 30%, not bad if you’re used to box shifting but not the sort of margins you’d expect from adding the high level of value to your customers that Cloud Services provide.

YourCloudPlatform offer UK businesses a unique opportunity to become Cloud Computing service providers overnight, with ZERO capital expenditure.

For further details contact Terry Pullin, Cloud Services Director Backbone Connect on 0203 130 9444



This entry was posted in Cloud Computing, Cloud Resellers, Cloud Vendors, Colocation Services, Hexagrid, IaaS, Infrastructure as a Service, Internet Connectivity, Small Medium Business Cloud Issues. Bookmark the permalink.

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