Cloud Partner Programs: 5 Questions VARs & MSPs Must Ask
Dozens of cloud services providers (CSPs) promote channel partner programs to VARs and MSPs. But cloud partner programs sometimes come and go. Two prime examples: Doyenz exited the European cloud storage market before selling the company earlier this year, and now Level Cloud is ending its MSP partner program.
So how can VARs and MSPs mitigate their own risk when evaluating SaaS, IaaS and PaaS-oriented partner programs? Here are five questions worth asking.
1. How are you funded?: Admittedly, most cloud services providers are privately held and don’t disclose their quarterly revenues or earnings. But you can ask the same question in several different ways to see if the answers are consistent and to your liking:
- How is the company currently funded, who are the stakeholders and how long will that funding last?
- Does the company need to raise more money and if so, when?
- What is the company’s burn rate — that is, how long until current funding runs out?
- Is the company seeking private equity, an IPO or some other type of exit? If so when?
2. Are you pure channel?: Few cloud companies focus purely on the channel. But even a pure channel focus isn’t necessarily a good thing. What you really want to know is how the cloud services provider (CSP) engages the channel and customers, and you want to minimize the potential risk of channel conflict. So ask:
- How is your cloud sales team compensated for direct vs. partner sales?
- Who controls end-customer billing and end-customer branding?
- How is my customer data managed in your system?
- Are you willing to gaurantee that you will never call directly on my customers? Can I get that in writing?
3. Can I speak to partner references?: Here again, dig deep to make sure the partner references don’t have potential conflicts of interest. For instance, sometimes early partners are beta testers who jump on a cloud service for a discount, or perhaps the partner receives some other hidden perk for being a reference. Also, make sure the partner actually has end-customers up on the system. Then, find out how long it took the partner to onboard the customers, check the onboarding costs and the end-customer retention rates.
4. What’s your SLA?: You’ll see more and more companies offering three-nines (99.9%) uptime in the cloud. But that figure is a bit hazy, since it’s difficult to determine how much planned downtime you may also experience annually. Plus, SLAs should also include some sort of phone, email and help desk support metrics.
5. How do I move to a different cloud services provider?: If you’re not satisfied with the cloud service how do you (A) exit quickly and (B) migrate your customers to a different cloud service with (C) no financial penalties. Yes, assume your worst case scenario will come true then prepare accordingly.
The cloud services market continues to grow. But many cloud channel partner programs are going to come and go. Make sure you’re asking the right questions before you sign any agreements. Then, make sure you have a contingency plan in case your cloud services provider (CSP) decides to take a channel partner program in a different direction.