WPC: Partners Selling Cloud Services Reaping More Than Just Profits

WPC: Partners Selling Cloud Services Reaping More Than Just Profits

Channel partners that are gaining more than 50 percent of their revenue from the cloud are experiencing higher gross profits and are gaining more new customers than those still further behind in the cloud curve. That's according to a Microsoft report released at WPC this week.

Here's the good news: Microsoft partners that are gaining more than 50 percent of their revenue from sales related to the cloud are seeing higher gross margins, more new customers, increased revenue per employee and faster overall business growth. This data comes from a new IDC-scribed report sponsored by Microsoft.

But here's the bad news: Those with less than 50 percent obviously aren't seeing such benefits. Depending on what side of the divide you're on, you can consider yourself lucky or possibly in need of a revisiting of your business plan.

Microsoft released the results of the study this week at Microsoft Worldwide Partner Conference 2013 (WPC13). And according to that research, cloud-oriented partners are growing at twice the rate and gaining new customers twice as fast as those not considereed cloud-oriented. Additionally, cloud-oriented partners are generating 30 percent more revenue per employee than their non-cloud-oriented counterparts.

"Cloud alone hasn't caused these impressive numbers, though that is absolutely part of it; top-performing partners were visionaries that took on cloud technologies before their peers," said Darren Bibby, program vice president of Channels and Alliances research at IDC, in a prepared statement. "We're at the point in the industry's overall cloud transition where partners that don't move some of their business to the cloud likely won't survive. And some partners that are getting ready to sell their business or retire may be OK with that. Most won't be."

Keep that in mind as you consider the future of your business. Just like the shift from box-pusher to VAR, the shift to the cloud in the channel is having a dramatic impact on your business' future and its overall value.

A few other interesting statistics from the study:

  • Sixty-three percent of customers expect to have a single cloud service provider to meet their needs.
  • Sixty-seven percent expect to purchase a wide variety of cloud services from a single vendor.
  • Seventy-four percent expect their cloud service provider to be able to move a cloud offering back on-premises if needed.

Customer requirements are getting pretty specific, and they're less likely with each passing year to accept compromises. For partners to succeed, they have to consider how customers want to consume their cloud and how they can best meet those needs.

"This research validates our belief that the most successful partners are the ones that offer a hybrid approach to IT. Microsoft is the only vendor equipped to help partners offer their customers a suite of on-premises and cloud solutions in both public and private cloud environments. By offering a hybrid approach, it better addresses customer needs and, in turn, helps our partners make more money," said Jon Roskill, corporate vice president of the Worldwide Partner Group at Microsoft, in a prepared statement.

TAGS: Case Studies
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