Russell Griffin is the Director of Channel Programs at Hostway, with more than 15 years of experience in channel sales and management at industry-leading hosting providers and major technology companies including Dell and Microsoft.
Cloud services are one of the hottest trends in the IT solutions sector, with industry analyst Gartner predicting that demand could surge from $2.7 billion to well over $10 billion in just a couple of years. Spotting a new opportunity, many IT solution providers are looking to add cloud services to their portfolios, including value-added resellers, integrators, managed services providers, developers and independent software vendors.
Adding cloud services may be a smart move: Many customers are looking for a one-stop shop, and rounding out an offering with cloud services can enhance your company’s overall appeal. But while cloud is attractive precisely because it has so few infrastructure requirements for customers, the same is not true on the IT vendor side. Even though cloud services are accessed in a virtual environment, it takes significant investment and resources to build and manage a solid cloud infrastructure and keep it up to date.
Partnering with Hosting Providers
So how do you cash in on the cloud trend without making that investment? Partnering with an established hosting provider can be an ideal solution, allowing you to share an existing infrastructure instead of building your own. With the right hosting partner, offering cloud services can broaden your company’s appeal by expanding your portfolio of services so that customers have a single IT solution provider.
To make this work, you’ll need to evaluate potential hosting partners’ goals and strategies to make sure they dovetail with your business operations and objectives. Take a look at the growth opportunities such a strategy offers, focusing on sustainability and scalability as well as deployment and development support.
Cloud partnerships generally fall into five categories:
- Resellers: With this arrangement, you control the customer relationship. The cloud provider bills you, providing services at a discounted rate. You price the cloud services you offer customers and bill them accordingly.
- Referral Partners: In a referral partner scenario, you hand the business off to the cloud provider in exchange for a commission. Terms can vary and often include residual payments over the lifetime of the relationship with the customer.
- White Label Resellers: Also known as a “private reseller” arrangement, this agreement allows you to offer a branded cloud platform to your users. In most cases, white label resellers also provide 1st and 2nd-line support, backed up by the hosting partner.
- Affiliate Programs: These website referral commission arrangements allow you to receive a commission when a customer clicks on a partner ad or other link on your website. These programs often offer a commission for new business the links generate.
- Third-Party Agents: This type of agreement generally involves an onsite resource, often based offshore, to generate new business and provide service to customers in targeted regions.
Depending on your business objectives, one of these types of hosting partnerships can provide a solution for your customers who need cloud services while opening lucrative new revenue streams for your company. The rapid proliferation of cloud services – a multitude of “(fill in the blank)-as-a-Service” offerings – is a testament to the growing demand, so this can be a great way to expand your offerings without taking on a high level of risk.
While it’s tempting to think of cashing in by building your own cloud service infrastructure, it may make more sense to find out what your customers need and seek an established partner who can help you offer cloud services without the upfront investment. Collaboration may be the solution that supports your objectives for your business today – and makes sense as technology service demands evolve over time.
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