Emerging Services as New Revenue Streams
Business issues–not technology–drive the majority of changes in the industries we serve. These business needs spawn new technology requirements for our customers, who then look to their IT partners for help. And while your first reaction might be, “Great–one more thing I have to figure out, deal with and manage,” the constant flow of customer requests can sometimes evolve into more than just a one-off hassle to be dealt with and managed.
The trick is figuring out which new requests represent systemic changes in the industries your business serves, and which are specific to a particular customer. When you spot the former trend emerging, it’s time to stop thinking “whack-a-mole” and start thinking hockey stick growth curves.
Two key areas where we are seeing exponential growth in customer demand are Office 365 backup services and compliance reporting. While these may seem like two very different opportunities, they boast some similar characteristics:
While some enterprises and small businesses may try to save some cash by relying on a Google ecosystem, the vast majority of companies are going to continue using the Microsoft suite of products they and their employees have been using for decades. This means that there is a massive–and growing–installed base of Office 365 users that will be amenable to complementary services. In fact, 72 percent of small to midsize businesses have already adopted Office 365.
On the compliance side, if you’re in a regulated industry, compliance is simply not optional. And despite some weakening of regulations in some countries, there is an increasing amount of oversight being mandated for many businesses.
Regulation isn’t only for the “big guys,” either: 51 percent of companies with fewer than 5,000 employees are dealing with at least one set of compliance requirements. If your company specializes in a regulated industry, keeping up with compliance requirements is a universal need that you’re in a prime position to serve.
Migrations and upgrades can be a lot of work and put a crunch on your resources. We all know that while they can occasionally give you a nice bump in revenue, they also represent a significant opportunity cost.
Recurring services are far more attractive and desirable for IT service providers, and both Office 365 backup and regulatory compliance squarely fall into that category. Backup services are, by their very nature, a recurring service that most companies hope they never have to use but are committed to having for insurance and business continuity purposes.
Although the specifics of regulatory requirements do tend to change from year to year, once companies are required to comply, that requirement seldom disappears. Following the regulations for the industries you serve lets you anticipate their needs (and your own needs to support them), with few surprises to disrupt daily operations.
Costs of Doing Business
Both regulatory compliance and Office 365 backup fall into the “have-to-do” category of technology budgeting. They don’t directly result in any revenue generation, and there’s nothing particularly sexy about them, but if you don’t have them in place you could end up severely damaging your organization’s ability to conduct business.
This means that they won’t be on the radar of sales and marketing and will be viewed solely as “IT cost items,” which also means your clients are unlikely to be shopping around for new solutions once they settle on one. So, by netting these customer engagements early on, they can represent a steady–and profitable–ongoing revenue stream for years to come that nicely rounds out other services you’re already providing.
Where an IT Service Provider Adds Value
The Exchange servers that Office 365 is replacing were typically backed up using on-site physical media (if they were hosted on site) that was then periodically moved to another location. In the event of a disaster, restoration to a certain point could be achieved using one of these physical backups as a starting point.
Of course, the days of driving a tape drive to a secondary location are (hopefully) behind us. And while Office 365 does have some backup capabilities, most organizations are opting not to use it out of security concerns. Instead, midsize businesses are turning to third-party experts specifically for this service and taking it out of the hands of their IT admins.
Backing up Office 365 data to other cloud-based services provides the redundancy businesses need with a level of abstraction that gives them security they can trust. And the service is a natural recurring revenue opportunity for service providers that will seldom be called upon to restore that data in the event of a significant loss.
For regulatory compliance, service providers can really productize their offering by combining the technical aspects of their solution with consultative expertise. Not only should your company be able to provide what customers specifically request, but you should be establishing yourself as a trusted partner.
When you are both familiar with regulatory requirements and know how they specifically impact each specific customer, you can make informed recommendations and better anticipate their needs.
Regardless of whether Office 365 backup, regulatory compliance or both of these service offerings are already on your menu, your roadmap or your radar, these are but two examples of the potential new services that can also mean recurring revenue for your business. Don’t sleep on these chances to deepen your relationships with existing customers–or overlook the potential they present to competitors looking to get in the door to your accounts.
Miguel Lopez is SVP & GM, Manager Service Pro.
This guest blog is part of a Channel Futures sponsorship.