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What To Look For In A Cloud Service Partner

The opportunities for success reselling cloud services is huge. Did you know that your IT company can make quite a bit of money reselling cloud services and cloud-based applications?  Cloud service usage is predicted to increase dramatically by 2023. The smart IT solutions providers are jumping on this bandwagon to grab a “piece of the pie.”

But when choosing which kind of “pie” to take a bite from, you must do your homework.  Why?  Because, if you choose the wrong Cloud Service Provider (CSP), they’ll take more than you want them to – leaving you just a “sliver.”

Plus, you want to choose a cloud service like CPU’s that employs collaboration across multiple organizations. All of this makes deciding which CSP is best for your IT company confusing, especially if you’re new to selling cloud services.

Navigating The Changing Tides Of Cloud Usage

This can be tricky as well. CSPs seem to be popping up everywhere. How do you choose the right one so you can successfully add this new revenue stream to your IT service offerings?

The tides are shifting in the way businesses access IT solutions. And the new way to navigate them is to dive in.

Companies large and small are migrating their IT infrastructures to the Cloud faster than ever before.  It’s anticipated that the small businesses moving to the Cloud will triple in the next few years.  And 65% of these companies will be migrating their email services to the Cloud as well.

Why is this?  Because:

  • They want to access their digital information from anywhere at any time.
  • They’re looking to increase productivity and collaboration at a lower cost.
  • The Cloud provides the scalability and flexibility they need to grow their business.

How Should You Position Your IT Business? Should You Refer or Resell?

Being a CSP isn’t the only way to make money from the Cloud. Your IT company can do this by referring customers to a cloud provider.   But what does it mean to refer vs. resell?

When You Refer/Resell Cloud Services:

  • You directly send your customers’ cloud business to the hosting provider.
  • The CSP pays you a percentage of the profit.

CSPs typically focus on finding referral partners to generate leads, as opposed to partnering with them.

Referring Customers

This is the easiest way to get into the “Cloud business.”  It enables you to help your customers find what they need without taking on any responsibility for the service or risk.  However, you won’t make as much money as you would reselling cloud services.  Plus, your customers have to go through you and possibly the CSP to get the customer service they need.

Reselling Cloud Services

When reselling cloud services, you basically own the end customer.  The hosting provider will bill you based on a discount structure so you can add your margin on top of the fee.

White Labeling

The next step would be to white-label a cloud service. With this, you can sell more advanced products that you can mark up.  You’ll have the responsibility of offering the first or second tier of support. What you can’t support the cloud partner will.

Both reselling and white labeling offer you the opportunity to make more money, add value to your existing schedule of solutions, and help to build credibility for your IT company.  Your customers will like this because they only have one point of contact if they have issues with the cloud service (you).

What About Building Your Own Cloud Service?

The next step after reselling or white labeling cloud services would be to build your own cloud infrastructure or buy them from the hosting provider.  If you decide to do this you will have the benefit of maintaining control over the cloud infrastructure.

But on the opposite end of the scale – you’ll have a slower time to market and a much higher upfront cost. Plus, you’ll have recurring costs and capital expenditures.

You’ll need to employ experienced engineers and rent or buy space for storage and spare parts.  Then there’s the maintenance responsibility. If your customers’ cloud service goes down, you’re responsible. In addition, you must spend money to market your product. This is a huge commitment.

What About Partnering With A CSP?

You’ll have a faster time to market, the CSP will take on the costs of building your infrastructure and handle all the maintenance.  You’ll also have access to all of their marketing collateral. The CSP must fix any problems if there’s an outage.

So, What’s The Answer?

Ask yourself, “What do my customers need?”  Their demand for cloud services should drive your decision. How can you fill the gaps?

You can pick and choose the cloud services you provide to your customers such as:

  • Virtualization Services
  • IaaS
  • PaaS
  • SaaS
  • Migrations
  • Backup and Disaster Recovery
  • e-Commerce Solutions
  • Billing Systems
  • Database Services

It’s All About Your Customers

Most customers want to use companies they already trust (like you). They don’t have the time or knowledge to make the right choices when it comes to the Cloud. As their trusted IT Partner, they are more likely to depend on your advice for what’s right for them.

Let your customers’ needs help you determine which cloud services to provide. This may change, and you always have the flexibility to do so as well. When choosing your Cloud Partner to make sure they have the hosting expertise you need and they won’t take over customer accounts (like some of the big cloud providers do).

And make sure they provide the margins you need to get into the cloud business. For these reasons, many IT companies are turning to smaller cloud service providers like CPU.

Keep up to date on all the happenings in IT. Visit CPU’s Tech Articles  Here are a few samples of what you’ll find.

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