Cloud Computing: How VARs Can Get Started

December 21, 2009

3 Min Read
Cloud Computing: How VARs Can Get Started

By Joshua Beil

To get started offering your own cloud computing services (such as hosted applications), there are two intertwined elements that solutions providers need to put into place. The first is implementing a service delivery platform (SDP). The second fundamental element involves a cloud infrastructure. Here are some more tips for VARs and service providers.

Let’s look first at a potential SDP strategy, which allows your business to handle key operational processes such as defining and managing service or product offerings, provisioning new customers, and managing your infrastructure. A good SDP also supports ordering, billing, customer relationship management, and other essential business functions for service delivery. Telcos and other service providers have used SDPs for decades – it is the foundation of a managed services practice.

What You’ll Need

The key elements of a successful SDP are the following:

  • Enabling customer self-service: It is vital to minimize your customer support costs and the best way to do this is by offering feature-rich self-service tools that give the customer visibility and control into their account to make a range of changes as needed such as changing passwords, adjusting preferences, and mobile device configuration.

  • Handling customer and infrastructure provisioning: Creating customer accounts and spinning up (and down) the physical and virtual resources are necessary to deliver cloud computing services.  Flexibility and balancing density with power and cooling efficiency are important infrastructure requirements.

  • Offering multiple subscription services: Cloud computing services are offered and delivered over the Internet and the expectation of the end customer is that they can purchase and manage these services over the Internet a la carte and bundled for discounts. Your business requires an ordering system and customer-facing storefront that is integrated with a product catalog. You must be able to define the ordering steps, product-specific data collection, and address business-specific requirements around direct order-entry and sales commissions.

  • Managing the back-end: There are a number of important back-end components to operating cloud computing services, such as customer accounts, servers and applications management, IP address and network management, monitoring, and security. These back-end elements have the potential to pose significant complexity if not managed by a solid SDP.

  • Integration with internal and external systems: Your SDP will need to hook into existing systems and platforms inside and outside of your organization. Internally, this could include CRM, ERP, helpdesk, accounting and reporting systems. Externally, you will likely need to tie into various mechanisms to support e-commerce such as payment and SSL gateways.

  • Billing and accounting: As noted directly above, your SDP could hook into an existing billing system. Alternatively, an SDP can have a baked-in billing system which would handle everything from invoicing, recurring credit card processing, fraud screening, and taxation issues.

Let’s Talk Infrastructure

The second fundamental element you will need to put into place to manage your own cloud services offering is the actual infrastructure. Namely: servers, routers/switches, and the IP network.

There are two options to make this happen: create your own hosting infrastructure or lease server resources from a managed hosting provider. While both choices are viable, they offer different pros and cons. Self-hosting requires larger initial capital investments, but offers lower operating outlays over time leading to higher long term profitability. The reverse is true with using a managed hosting provider: entry costs are lower, but long-term operating expenses are greater. Which option is right for your business will vary depending on your current financial status and long-term goals.

More Information

The information above is an excerpt from a tri-branded whitepaper from Parallels, HP, and Intel. To download the complete report, click here.

Joshua Beil is director of market strategy and research for Parallels‘ Service Provider Business. Monthly guest blog entries such as this one are part of The VAR Guy’s sponsorship program. Read all of Joshua’s entries here.

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