Fighting through the fog: Cloud Computing

Getting in early
The amount of chatter around cloud computing, SaaS and hosting would suggest that it’s going to be big news for the IT channel and it will be, but with the new products and different ways of selling involved in getting into the cloud, it’s easy to see why many resellers are reluctant to get involved until a clearer picture emerges.

We all know that those who are first out of the starting blocks stand to gain the most in terms of market share, but it’s important to make sure you’ve got a good grasp of the technology to ensure you give your customers the right advice.

A lot of resellers are worried about being squeezed out of the market as consumers go straight to manufacturers like Microsoft and this is where being able to give the right advice becomes even more important. Your customers won’t get the same level of advice and support direct from Microsoft as they could from you; make sure they appreciate that by being able to answer all their questions and helping them feel secure in the choices they’re making.

Opportunity knocks
Getting into the cloud computing market may seem daunting at first, but once equipped with a firm understanding of the industry, IT and comms resellers are perfectly placed to cut through the confusion surrounding Software-as-a-Service in the SME sector.

Recent research has indicated that SaaS solutions are growing at a rate of 33 percent per annum and this trend is set to continue into 2009 and beyond. Gartner recently reported that, by 2011, 25 percent of new business software will be delivered through hosting providers. However, SMEs still remain unsure about how they can implement these services into their existing IT infrastructure and which products will have tangible benefits for their business.

Resellers are in an ideal position to combine an in-depth understanding of cloud computing with a firm grasp of their customers’ business models to provide cost-effective and flexible hosted IT solutions that can increase productivity.

Our own research indicates that 34 percent of businesses are planning to increase their IT and communications spend over the next 12 months, providing plenty of opportunities for channel growth.

In addition, 42 percent of businesses will increase their use of remote and mobile working solutions over the next 12 months.

In spite of this proposed investment, 41 percent of businesses still aren’t aware of the hosted SaaS solutions available to make mobile working more productive and cost efficient and 40 percent still haven’t adopted Microsoft Exchange, CRM or SharePoint, opening a wide opportunity for resellers to educate and convert new and existing customers. All of these solutions can be effectively provided via hosted SaaS, so do your homework and get ready to capitalise on the situation.

Clinching the deal
To make a sale, you’ll need to understand how your customer will benefit from a hosted SaaS solution rather than the in-house option they may be considering or already using. The top plus points are:

Economy – Whilst there are obvious benefits to products like Microsoft Exchange, Sharepoint and CRM, many SMEs can’t afford the initial investment involved in purchasing the software, with a license for every user plus a decent in-house server that the products can run on. Hosted versions of these products offer an affordable, pay monthly solution that negates the need for a big cash injection up front.

Flexibility – a hosted SaaS solution is very easy to up or downscale as required by the customer. If they open a new office or hire new staff, new users can be added straightway. It’s perfect for a growing business or one that’s been forced to play it safe because of the recession, but is hoping for future growth.

Reliability – Due to their size, many SMEs don’t have an in-house IT department, so any problems with in-house equipment or privately owned software can be a huge headache for them. By purchasing hosted SaaS products, customers have the peace of mind that all their systems are being run on a large, powerful and reliable server and that if any problems occur, they will be taken care of immediately. It’s hassle-free.

All your customers will have different requirements, and it’s vital that you understand these before offering advice. An initial consultation to assess the customer’s needs will ensure you provide them with an effective solution that will win their trust and their future business. Basic questions such as how many people they have on the road at any one time, how many people need shared access to shared documents and whether they currently have any kind of CRM system in place should help you build up a picture of what you can help them with.

As for resellers, the main benefit of selling SaaS through the cloud in this way is a regular margin over a prolonged period of time. This margin can be further increased by bolting on extra products and services or adding more users as your relationship with the customer progresses.

Choose your friends wisely
When you choose your hosted SaaS provider to partner with, make sure you ask them what support and training is available on the products that you’ll be selling. Remember, you’ll need to be confident about the products to be able to sell them to a confused SME marketplace and a provider that doesn’t understand the importance of this is underestimating the role that its reseller partners will play in its success.

If you want to sell Microsoft products, partner with a company that has an established relationship with Microsoft to ensure reliable product support and the best range of product options. Look out for providers with Microsoft Gold Partner Status and check how many Microsoft competencies they’ve earned as this tells you how Microsoft rates them against their own high standards.

Go forth and conquer
Cloud computing has huge potential in today’s tough economic climate, but also faces an immense challenge in overcoming the lack of understanding about the technology itself. Someone needs to take on the mantle of championing the tangible benefits the right SaaS products can bring. If the channel chooses to take up that role, they’ll prove themselves invaluable to their customers whilst creating a thriving new margin generator for their own businesses.
 
TOP BUZZ WORDS
Cloud computing – First used publicly by Google at a trade conference, this term refers to any kind of computing where the computing needs of users are satisfied by the internet, rather than a large, in-house server. It can encompass anything from webmail (if you have a Yahoo, Hotmail or MSN account, you’re already using the cloud) to a shared, real-time CRM platform being accessed globally by an international business with all the data held online, rather than in a central hub.

The Cloud - When used to discuss cloud computing, the cloud is a metaphor for the internet, the place where all the data and information necessary for cloud computing is held.

Software-as-a-Service (SaaS) – A way for users (typically businesses) to gain access to software without actually purchasing it directly. Instead, they use it on demand via a licensed agreement.

Hosted services – programmes or electronic storage space provided, run and maintained on behalf of the user, by the provider.

Hosted SaaS – When providers run and maintain SaaS programmes on behalf of the user on (typically) a monthly pay as they go basis. The user doesn’t have to invest in purchasing any software, host the software on an internal server or resolve any issues with the software – this is all looked after by the provider.

Unified Communications (UC) – The integration of several different kinds of communication (eg: phone, email, shared databases) onto one system of platform that allows activity or messages to be auctioned on one medium and received on another.