The Smart Way To Make The MSP-To-CSP Transition
By Dan Shapero, Director, Global Cloud Marketing, Ingram Micro
Just about every VAR, MSP, or IT solutions provider I’ve talked to who’s not currently selling cloud solutions and services tells me they’d like to start doing so. But although you can sign up for a free cloud service in less than two minutes, becoming a successful cloud service provider (CSP) isn’t so easy. What’s more, selling cloud requires a different skill set than selling traditional hardware or software, and it’s different than selling managed services, too.
As much as I’d like to tell you that you can transition from being a VAR or managed services provider to a CSP in three easy steps, that’s just not the case. The truth is, there are numerous steps, not all of them easy, and each person reading this is at a different phase of that continuum. That said, I do have a few tips and suggestions I can offer based on talking with hundreds of channel partners who have successfully made the move. The following three key principles will help you avoid common pitfalls and guide you across the chasm more quickly:
- Recognize Time Is Not On Your Side
Believe it or not, procrastination is probably the number one killer of becoming a CSP. It’s the mindset that says, “Things are going okay now selling project-based IT services and managed services; we don’t have to sell cloud services yet.” Or, “I’ll wait until more customers ask about the cloud.” Here are a few reasons to reconsider that kind of thinking: IDC estimates the public cloud services market (which was $45.7 billion in 2013) is expected to grow at a 23 percent compound annual growth rate (CAGR) through 2018. On the private cloud side, IDC estimates that worldwide spending on hosted private cloud services will surpass $24 billion by 2016. These stats point to a major shift happening right now in IT. Fact is, your customers are going to move to the cloud, and if you’re not ready, they’re going to find another cloud service provider — or they’re going to work directly with a cloud vendor. The reason that’s a big deal is that once a customer moves to the cloud, it’s going to be very difficult to win them back.
- Conduct A SWOT (Strengths, Weaknesses, Opportunities, And Threats)
Becoming a CSP requires a business assessment to determine your current LOB (line of business) expertise. For starters, you need to determine how much recurring revenue you’re already generating and how you can replace your on-premise monthly recurring revenue if those IT services move to the cloud. Specifically, you need to find out another way your company can continue adding value. For example, say you want to focus on selling only RMM (remote monitoring and management) services, or perhaps you’re interested in providing more complex solutions and services such as SaaS (Software-as-a-Service), IaaS (Infrastructure-as-a-Service) and/or PaaS (Platform-as-a-Service). Cloud makes up a wide array of IT services. Know which ones you want to specialize in so you can build expertise and create a differentiator.
- Partner With A Cloud Expert
With so many cloud providers flooding the market, it can be difficult to discern which one is the best fit for your business and for your customers’ businesses. And while your cloud provider is separate from your company, you can be sure your reputation will be tied to theirs. If you select a cloud provider with limited functionality, inadequate support, and/or one that lacks the necessary security requirements, you’re risking your company’s reputation. If there’s one piece of advice I can’t emphasize enough, it’s that you should get help early on. Find a trusted expert through a vendor, distributor, peer group, and/or industry association to find out what other successful solution providers are doing to minimize the chances of choosing a subpar cloud provider.
Not only do you need a reputable cloud provider, you’ll need a partner who can hold your hand (especially early on) though the migration process so key details don’t get skipped as you take customers’ IT from on-premises to the cloud. And, if something goes wrong during or after the transition, you and your customers need reliable service desk support that’s available 24/7 to quickly resolve problems.
Training is another investment you should expect to make if you want to become a successful CSP. Keep in mind that different team members have different needs, and there isn’t a one-size-fits-all course that will meet everyone’s demands. A good training program should be helpful and also flexible to accommodate a variety of learning styles and requests.
Right now, there is a land grab opportunity with the cloud. And, when it comes to succeeding with cloud services, it’s the fast that eat the slow — not big companies eating smaller companies. If you have on-premises customers, they could be lured away by other cloud providers and CSPs if you’re not actively engaging them about your cloud offerings. Solution providers that cater to small and midsize companies have a big opportunity to pivot and seize major cloud market share over the next couple of years — if they’re willing to act quickly.
Ingram Micro has bundled key cloud services into a program called Cloud Elevate, and further simplified the sale for channel partners through the automated Cloud Marketplace, a single portal that allows partners to purchase, provision, manage, and invoice a wide range of cloud solutions and services. Many of your vendor partners, as well as CompTIA offer education, training and resources on the cloud. If you’re not sure where to start, a great place is joining the CompTIA Cloud Community.
As Director, Global Cloud Marketing, Dan Shapero is responsible for establishing and overseeing Ingram Micro’s global cloud marketing strategy and plans, as well as working with the company’s regional and local cloud business to execute the strategy and create growth and recognition in the marketplace. Before joining Ingram Micro, Shapero founded ClickCloud, which supplies the IT channel with turnkey digital marketing options on a fixed-fee monthly subscription. He also held executive positions at Kaseya, where he worked in global marketing and served as executive vice president and general manager for the company’s On Demand Division.