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Practical steps to build a successful cloud services business

TerenceNgai

 

One of the perks of my job – is talking to partners.  Through many recent conversations, I know that organizations of all sizes are moving to the cloud for speed and business agility; they realize there is more than one option besides public cloud to achieve the business outcomes they want.  Many are embracing a hybrid IT model with on-premises private cloud and off-premises managed or public cloud. 

Service providers market is set to explode

The channel dynamic is also changing due a market shift toward hybrid IT and consumption-based service model.  Traditional channel players are facing a rapid decline in their resell business as customers are increasingly shifting to an off-premises, consumption-based model with SaaS or managed services. I hear this repeatedly.  At the same time, a number of new players have come into existence as ‘born-in-the-cloud’ service providers. 

The market opportunity for service providers is huge – an exciting time!  Based on our research, the end user spending for consumption-based services will reach $144 Billion in 2017 with a 3-year growth rate of 30%. 


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Practical steps to build a successful cloud services business (video)

Recently, I sat down with my cloud colleague, Shisher Wahie, and shared 4 comprehensive steps to building a successful cloud services business. Here’s a quick insight into some of what I shared:

  1. Build a differentiating business plan -- You need to differentiate yourself from the large public cloud vendors by providing unique values that others cannot. Such differentiation could come from your ability to handle complex workloads, support for local country requirements, better SLAs, personalized services, or industry expertise. Competing on simple infrastructure services or pricing is not a recipe for sustainable competitive advantage.
  2. Develop a robust service portfolio -- After you have defined your business plan and differentiation strategy, you need to define the services portfolio and the key capabilities to meet your customers’ requirements. With a target service portfolio, you’ll work with your internal teams and partners to determine the sourcing strategy – which capability you will develop on your own and which you will rely on your partners to provide.
  3. Develop a sound financial plan – Since your revenue stream will be mainly subscription-based (rather than transaction payment), it’s crucial to have a sound financial plan to secure the required assets to run your business. Spending a large capital investment upfront and hoping the revenue will follow is a dangerous option, especially when you have capital constraints. You need to work with a partner who can offer flexible financial options that allow you to align cost to revenue, manage cash flow and minimize financial risks. 
  4. Build a solid go-to-market plan -- You need to have a creative marketing plan to raise your brand awareness, and drive considerations and preference for your service offerings. Build a strong sales force with the capability of selling cloud services, not products. To extend your sales coverage, you may leverage your partner’s sales channel to complement yours, and get access to new customers.

 

Get started

That’s just a recap – to hear more, check out our discussion here .

HPE can help you develop and execute on these crucial steps to build a growing and successful service provider business. Visit our website for more information at www.hpe.com/info/sp.

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About the Author

TerenceNgai

cloud SaaS hybrid IT

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