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Revenue models for cloud services are commonly oriented towards monthly recurring, potentially reducing upfront revenue and cash flow. That's a concern for partners whose business models may shift. Here's a look at some potential approaches MSPs can take to minimize any transition pains and turn cloud file sharing into an awesome cash flow generator.
March 24, 2014
eFolder just spent a few days with MSP partners from the HTG peer community. A persistent concern from partners is how to profit from the shift to cloud services. Specifically, revenue models for cloud services are commonly oriented towards monthly recurring, potentially reducing upfront revenue and cash flow.
When you peel back the onion, partners have far more flexibility with cloud services than they may at first realize. To maximize cash flow, partners need to work with vendors that offer flexible wholesale cloud services and business models that spread costs overtime, while giving the partner ultimate control over the end-user pricing and packaging. eFolder’s Anchor sync and share platform supplies partners all of these key business ingredients, including:
Wholesale, monthly, and per user billing
SaaS bundles that include abundant amounts of included cloud storage
Total control over retail pricing and packaging
Branding features that enable the partner to make the solution their own
By leveraging these business model features, MSPs can turn cloud-based file sharing and sync into an awesome cash flow generator. Here are four potential approaches:
1. Annual Subscriptions
Just because your vendor charges by the month, doesn’t mean you need to as well. With Anchor, partners can pay for their wholesale licensed users in predictable monthly installments, while packaging the end user offering in one, two or three year subscriptions. Clearly, this is a business choice and some clients may prefer monthly billing. But if the price is right, other clients may prefer the added simplicity of paying upfront for a yearly service offering. By doing so, the partner accelerates their upfront cash flow.
2. Migration Projects
eFolder’s Anchor solution has a killer feature called File-server Enablement. This feature allows partners to cloud connect the client’s legacy file server and map it the users and team shares so data can be synced between the file server, PCs, Macs, tablets, and smartphones. The feature slips in nicely to legacy infrastructure. That being said, there are lots of clients that should be migrated off other collaboration platforms such as Sharepoint. Even with File-server Enablement, there is a fair amount of labor involved in properly connecting legacy infrastructure to users and team shares. Partners should maximize the opportunity for special project and migration revenue when deploying the Anchor platform.
3. Premium Managed Services
Even if a partner decides to charge for the Anchor service on a monthly basis, the key to large amounts of recurring cash flow is premium pricing. Partners that are focused on a managed services value proposition should charge an ample premium for deploying; managing; monitoring; and evolving file sync deployments. Client requirements are always shifting. Security monitoring is a non-stop endeavor. Adds, moves, and changes will occur all the time. Therefore, partners should deliver cloud file sync as a fully managed offering and charge $15-$25 per user, per month. With a premium approach, partners can make 60-75 percent recurring gross margins.
4 Two Services: File Sync and File Backup
eFolder’s Anchor solution offers sync and share capabilities, along with a powerful file and folder backup agent that is ideal for highly mobile remote users. Corporate issued laptops that seldom visit HQ have long been a data backup Achilles Heal for many organizations. With Anchor, partners can actually use one wholesale service and offer two discrete and different retail service offerings, one focused on sync and the other on backup. With more services to offer and more potential use cases, the Anchor solution can help partners drive more revenue and cash flow.
Embracing the hybrid cloud future requires partners to be nimble and creative in how they price, package, and monetize cloud services.
Ted Hulsy is VP of Marketing at eFolder, a cloud-based file sharing company.
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