Blog #3 of a 6 part series on The Future of the VAR, by Luke Norris – CEO and Founder of cloud provider, Peak (getcloud@ powered by peak .com) NOVEMBER 6, 2013
IT organizations aren’t the only ones who will benefit in the cloud era. Resellers and distributors that take the appropriate steps can capitalize on recurring revenue streams and stronger long-term customer relationships.
In response to customer demand, some VARs simply add “Cloud Services” to their line card. They have an agreement to resell cloud services if or when a customer proactively requests it. Yes, they can tell their customers they offer cloud, but they don’t have trained sales reps assigned to selling cloud and managed services (nor do they have a services-based comp plan), and they don’t have control over the cloud infrastructure to deliver true integration for their customers.
VARs truly committed to making the most of the new cloud era choose the white-label approach. These VARs use the cloud provider’s infrastructure as their own to deliver customized and tightly integrated managed services to their customers. Now, instead of consulting on servers and storage devices, they can talk about applications and the integration of these applications with cloud services. Instead of selling boxes, they can sell SLA’s. Rather than one-off sales, they lock in long-term recurring revenue streams.
While some VARS have yet to move away from traditional hardware sales, others are already successfully selling managed services, such as application management, database management, network architecting, implementations, and migrations. VARs with close customer relationships know their customers’ IT environments better than anybody else; offering complementary products (ie., up-selling and cross-selling) is a natural extension of their business. Cloud-enabled offerings such as disaster recovery in the cloud, storage in the cloud, virtual desktops in the cloud, and production workloads in the cloud are a natural next step.
The white-label approach compliments any VAR business looking to strengthen its customer relationships and build (or expand) a consulting or managed service practice. Adding cloud services to the mix is an important step toward long term viability, but it’s just one of many steps VARs must make to put their businesses on firm footing for the future.