In recent years, small- and medium-sized business buoyed by the simplicity and affordability of cloud services have moved more of their data to cloud applications. But even as SMBs cheer the low prices and ease of use that cloud applications deliver, many MSPs have expressed concern at the diminished margins they see when deploying cloud applications. For example, Microsoft recently cut commissions to channel partners who resell Office 365 up to 50%.¹

In spite of these concerns, the adoption of cloud applications by SMBs represents a significant profit opportunity for MSPs who can ensure their clients enjoy a smooth cloud migration and ongoing experience. This blog aims to help MSPs understand how to generate recurring revenues from clients who have decided to move part or all of their data to cloud applications such as Office 365, Google Apps, Salesforce and Box.

Too many MSPs have been sidelined by their clients approaching companies like Microsoft, Dropbox and Google directly for their cloud needs (or vice versa). MSPs need to take a proactive approach to ensure they stay a part of the cloud conversation, which can be accomplished by understanding their clients’ needs and recommending the right cloud application(s). As an example, MSPs with clients in the medical vertical may steer their clients toward HIPAA-certified file sync and backup solutions. Once the appropriate cloud application has been selected, MSPs should take charge of configuring data retention settings, user permissions, and adding or decommissioning users, among other settings.

Even after applications have been configured and data has been transferred, an MSP’s work is not complete without providing continual support and management. Especially when a client is taking advantage of multiple cloud applications, MSPs can prevent that client from quickly becoming overwhelmed by having to manage, for example, three separate cloud applications for each employee or figuring out the technical nitty-gritty of each cloud application. Moreover, there is no substitute for the friendly, always-there phone and Web support that MSPs provide for their clients–the FAQs and knowledge-base articles that many large cloud vendors provide simply cannot compete.

Smart MSPs recognize that when clients move some or all of their data to cloud applications, this unlocks more opportunities to profit. These include cross-selling other cloud applications and offering add-on services. For example, if clients have decided to migrate their email, contacts and calendars to Google Apps for Work, MSPs can educate these clients on the advantages of business-grade file sync and sell them a business-grade file sync solution. MSPs should also educate their clients on the risk of data loss in the cloud and help clients mitigate this risk by deploying a cloud-to-cloud backup solution on top of their existing cloud applications.

Conclusion

Rather than digging in their heels and trying to stop their clients from moving to cloud applications, MSPs should embrace these applications. Maintaining a proactive stance is critical to defending against larger cloud service providers that want to vend directly to SMB clients. The tactics that MSPs can use to profit from adoption of cloud applications–providing clients with stellar service, personalized advice, custom solutions, and add-on services–are, in fact, not much different from the business practices MSPs have employed for many years. That said, adapting these techniques to new cloud applications is a big shift. Indeed, the cloud may prove to be a strange and challenging beast, but the MSPs that manage to tame this beast will reap the greatest rewards.

¹ Talbot, Chris. “Microsoft to Cut Online Services Advisory Partner Commission.” Talkin’ Cloud. Penton Technology, 13 Jan. 2014. Web. 6 June 2015.

Neeraj Periwal is Marketing Coordinator, eFolder. Guest blogs such as this one are published monthly and are part of MSPmentor’s Cloud-based File Syncing and Sharing Infocenter.