Solutions providers and cloud brokers that focus on being the cheapest when it comes to selling cloud services may be missing out on a much larger opportunity.
Although public cloud providers have often competed on the cheapest price for commodity services, lowest price is no longer the key driver for end-customers, said Sharon Wagner, CEO of Cloudyn, in an interview with IT World Canada’s Computer Dealer News (CDN). Instead, the channel needs to ensure they provide value-added services, he said.
“The value proposition for them, I think, has nothing to do with cost savings or efficiency,” Wagner said.
Selling cloud capacity isn’t where the best margins are to be found. Most organizations now have multi-cloud environments. A typical business may buy services from Amazon Web Services, Microsoft Azure, Google Cloud Platform, IBM SoftLayer and others, mixing and matching to best suit their needs.
It’s also why there’s growth in the number of cloud billing and optimization management tools. The major public cloud providers offer tools to estimate costs and usage of their own services, but that doesn’t help businesses identify the best place to host an application or data across clouds.
Managing dozens or hundreds of customers and helping them to optimize their cloud usage isn’t easy. Cloud billing and optimization tools make it simpler and provide a value-add over and above reselling cloud capacity. It’s one way partners can differentiate themselves.
“Typically in a billing system, you can have a pretty rigid and narrow definition of customers and how they manage their accounts and their billing,” said Sean Rollings, vice president of product marketing at Aria Systems, in an interview with CDN. “What happens in that structure is for different services and for different ways the company’s organized, especially dealing through the channel, they end up with multiple definitions of customers and multiple sets of billing.”
It’s a complex problem, but Aria has a solution. The company recently launched Crescendo, a cloud-based monetization tool that uses its Omni-node technology to help partners and enterprises create a variety of offers and accounts. Crescendo enables a recurring revenue model across multiple clouds and then ties invoicing to specific end-users so organizations can see which cloud services are being used and by whom. Crescendo provides hierarchical account management across a broad set of account structures.
Aria’s goal is to make it simpler for partners and enterprises to serve customers in the way they want to buy, Rollings explained.
“The value that we provide is the revenue under management, the revenue running through the billing system. We know exactly the scale of what we’re serving out there,” he said.
Cloud billing and optimization tools will help partners identify the cheapest way for end-customers to consume cloud services, but Wagner noted it’s of greater importance to the channel to be agile and provide enhanced features. Price is not the key buying factor in cloud services any more.
Cloudyn’s tool provides partners with a complete view of their customers’ capacity usage and how it’s distributed across individual clients. Cloud billing and optimization tools help partners optimize profit margins, he said. At the same time, it also provides a single point of contact and cloud management for the customer.
“We have a win-win situation here for the broker and the end-client, as well,” Wagner said.
The path to success as a cloud partner lies in the direction of value-added and consulting services, he explained. The top public cloud providers don’t provide such services, instead focusing on selling capacity. Partners that help customers in creating and maintaining cloud transformation strategies provide a significant value and end up being the trusted advisor.
“I think that one of the key value-adds that partners have to provide if they are selling cloud is not only they have to sell cloud, but they have to maintain it for their customers. That’s where the most value is the partners can provide their customers,” Wagner said.