November 12, 2013
By Saad Shahzad
Do you want to capitalize on one of the hottest trends in the IT industry? Do you want to make monthly recurring revenue? Do you want to sell high-margin solutions? Do you want to become a strategic adviser to your end-customer base? If the answers are yes, then you might consider becoming a reseller for cloud desktops, also know as hosted virtual desktops (HVD) or desktops-as-a-service (DaaS).
Resellers are a critical component of the cloud ecosystem and will play a huge role, particularly in serving small to medium businesses (SMBs), which dont have the technology sophistication, personnel or resources to migrate to the cloud, giving resellers an additional opportunity to provide professional services.
Customers also will rely on resellers to educate them on the benefits of new technologies like DaaS, which can reduce operating IT costs, enhance worker productivity (anytime, anywhere and any device access) and alleviate IT headaches (with cloud orchestration portals).
While customers stand to gain from DaaS, so do resellers, specifically by earning monthly recurring revenue. There are two different models that resellers can choose from agency or resale.
Agents, also known as brokers, receive a commission either upfront for referrals or monthly recurring for a more involved sales role based on a percentage of the deal. Typical commissions range from 5 to 15 percent, depending on the agent’s role or sales volume. Agents need to have at a minimum relationships with the customer’s decision makers (e.g., CEO, president, CFO, CIO or IT director) and basic education on uncovering/creating the sales opportunity for the service provider. Agents can play a more consultative role in the sale with regard to needs assessment, road map development and provider selection. While there are exceptions, agents typically do not provide installation, migration, billing or customer care once the sale is completed, leaving that to the service provider.
In the resale or white-label model, resellers would sell as well as provision, support and bill customers while the provider delivers the back-end infrastructure. On average, resellers can get north of a 25 percent discount on the MSRP listed for DaaS providers. They can mark up the price of the services to meet the needs of their end customers, which have different price thresholds.
In the resale model, the underlying cloud service providers are responsible for maintaining SLAs to the customer and providing sales and engineering support to resellers. Providers also should offer a management portal enabling resellers to provision service and manage moves, adds and changes. Service providers usually also will provide Tier 2 customer support.
Resellers, however, are responsible for providing Tier 1 support, including engineering resources and a help desk that can field calls from the customer’s users. Providing basic support functions is an opportunity for resellers to create an additional revenue stream and, more importantly, to build customers’ confidence in their abilities to provide cloud services. In addition to providing support, resellers must bill the customer a critical function that ensure continued ownership of the customer.
The best part about DaaS is that it is a sticky” recurring revenue service. And resellers of both kinds can expect long-term contracts since customers are unlikely to switch DaaS providers with any frequency unless there is a problem with the service. Hence, its critical to pick the right DaaS provider a company that provides excellent performance, even better support and meets their service level agreements (SLAs), so the end customers never have to look elsewhere.
Saad Shahzad is chief strategy officer at
, a cloud transformation company that helps organizations rapidly migrate their IT infrastructure to the cloud.
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