How Partners Cross the Chasm to Robust MRR

Not all cloud skeptics are doomed, and not all early adopters will succeed.

January 20, 2016

3 Min Read
Calculator money

By David Byrd

David Byrd“Crossing the Chasm” is the title of a book released in 1991 that’s now become a common marketing phrase. It refers to the gap of time or vision that exists between a newly released technology product’s positive reception by a limited number of people (early adopters) and acceptance by a broader range of people (early majority). In “Crossing the Chasm, author Geoffrey Moore asserts that success comes from understanding that positioning a product for people who want their expectations to be fulfilled (pragmatists) is very different from marketing to visionaries who gravitate toward the promise of shiny new high-tech products.

In applying the premise to revenue generated by sales of cloud applications, visionaries are those who believe in the promise of the cloud, while pragmatists are those hesitant to fully embrace a cloud-based business strategy that they view as unproven.

Partners are expressing both real and imagined concerns about how to build successful cloud businesses, and it would be wrong to state that only the visionaries are correct and will succeed. Both groups will succeed or fail based on their choice of strategies — and more importantly, their ability to execute.

One area where execution is everything is bridging the revenue chasm between low monthly recurring fees and much needed higher monthly payments. A successful strategy must include two elements: product bundling and professional services.

Product bundling is fairly well understood by most suppliers, and there are many good examples. However, professional services are often viewed as the domain of larger cloud service providers (CSPs) or specialized partners. Moreover, they are considered outside the expertise or delivery capabilities of the average partner. This is the chasm that must be crossed. Partners must find ways to provide the professional services that 45% of the market requires.

What services? Most partners understand that there are significant benefits for customers transitioning their current technology infrastructures to the cloud. However, achieving these benefits requires a migration of IT services, processes and practices that can often be daunting. In fact, I saw a study recently that said 50 percent of companies are considering migrating to the cloud, but nearly 45 percent view such a migration as an obstacle to the effort. Partners that provide professional migration services not only shorten sales cycles and increase their sales and revenue; they also dramatically reduce the stress level for customers that want to adopt cloud solutions.

My company, CloudRoute, and a few other CSPs, offer partners both the ability to sell exciting cloud solutions and deliver much needed professional services. Partners without the internal resources to plan and execute cloud migrations should work with CSPs that have professional service programs.

I have also identified four selling principles partners should follow or expect of their selected CSP:

  1. Business value, not technology, should drive customer discussions

  2. Applications should be bundled to increase business value

  3. Offer complementary professional services, including:
    • Migration from current to cloud-based infrastructure
    • Integration into existing systems (hybrid cloud environment)
    • Custom development or implementation services

  4. Application bundles and professional services should be packaged to increase business value and average revenue per user (ARPU)

I discuss these principles and more in the recent webinar “How Do Partners Cross the Chasm to Robust MRR?” Take a look — and good selling!

**Editor’s Note: Did you help customers adopt cloud? Tell us about it in our new and ongoing Case Study Challenge!**

David Byrd leads marketing and operations for CloudRoute. Prior to CloudRoute, he was CMO at ANPI, and CMO & EVP of sales at Broadvox.

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