One in a Million: How to Survive as a New Cloud Vendor
If you missed the initial cloud wave, there may still be room for you in the market, but it won't be an easy journey.
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Over the last few years, the adoption of cloud has significantly grown to become a norm among both large businesses as well as SMBs. According to RightScale’s 2019 State of the Cloud Report, 94% of enterprises around the world are using the cloud. Further, Gartner predicts that the global public cloud services market will be worth $331 billion by 2022.
Profitability for Cloud Sellers in 2019
With the growth in cloud adoption, a lot of service providers see opportunities in selling cloud to other businesses. Therefore, more and more of them are entering into the managed cloud services’ business.
According to a recent survey by RBC Capital Markets, the revenue of certified Microsoft Azure channel partners increased by approximately 55% on a weighted average basis, in 2018. These partners are further expecting growth of approximately 50% in 2019.
In addition, Microsoft reported that more than 7,500 partners are joining its partner ecosystem every month. This ecosystem helps the company to generate 95% of its commercial revenue.
These are the stats of Microsoft’s partners alone, which show that CSPs (Cloud Service Providers) are significantly making a profit with the cloud business.
With a number of businesses selling cloud, from the top cloud giants to the service providers to the new entrants, the competition is tough now—both on the technology and the business front.
Challenges Faced by CSPs in Selling Multi-Cloud Solutions
According to IBM, 85% of organizations already have a multi-cloud strategy. And the remaining ones who don’t use multi-cloud currently, have plans to use it soon. By 2021, around 98% of organizations will be using multi-clouds.
If you are a Cloud Service Provider and are avoiding selling multiple clouds, then you won't be able to take a bigger bite from the cloud business.
It is a requirement for CSPs today to sell bundled cloud offerings so that they can sell more and acquire new customers. This way, you can meet multiple requirements of the customers and can offer them customized cloud offerings.
Since organizations are opting for a multi-cloud strategy, the cloud giants are innovating their cloud services to provide flexibility and freedom of choice to their customers.
These innovations allow organizations to use a set of capabilities from vendors of their choice but make things difficult for cloud service providers or sellers. It becomes complicated for them to manage multiple cloud services at a single place.
Challenges also arise for vendors when customers choose to purchase different cloud services from major cloud giants. For example, a customer buying cloud storage offering from Microsoft, and cloud backup offering from AWS. In such a scenario, the cloud sellers can’t effectively bundle the offerings to provide an integrated solution. It is not an easy task to maintain control over all such services and have a transparent billing. Thus, it becomes difficult to drive profitability for cloud sellers.
Customers can choose to buy cloud services in multiple ways, like on-demand, reserved capacity, prepaid, and through enterprise agreements. CSPs often get stuck in a complex cloud billing mechanism.
Moreover, the CSPs need to have the required resources and expertise to handle the customers and their issues related to specific cloud offerings. Management of data, applications, and processing of a multi-cloud business demands more attention, better control, and visibility for seamless performance.
Competition Among CSPs Is Getting Tougher
The stats shared in the introduction section show that the competition is increasing among CSPs as more and more businesses are becoming partners of the leading cloud providers and are opting to sell cloud.
In such a scenario, if a CSP doesn’t stand apart from the crowd by simplifying the complexity and making business processes seamless, they wouldn’t be able to make the most out of their business.
Making the Most Out Of Your Cloud Business
With this scenario of the multi-cloud trend, complex billing, and use of traditional models to deliver cloud services, the CSPs can’t really focus on their business and work on producing innovative services.
When they work day in and day out to deliver cloud services without automation and via traditional business model, they find it difficult to meet the demands of existing customers and acquire new ones.
Cloud business and profitability for cloud sellers aren’t that easy today!
In order to stand out and shine among the million others selling cloud services, one needs an automation platform that can help provision cloud services from any cloud provider without any complexity. It should also help automate other business processes involved in selling cloud solutions.
To learn how RackNap works and helps you stand apart from the crowd, write to us on or book a demo today.
This post originally posted on Racknap.
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