To compete with big players in their industry, today’s small and mid-size businesses (SMBs) are turning to the cloud to increase profitability and efficiency, reduce costs, and retain customers. Now, with the SMB cloud market nearing $35 billion in the U.S. alone, cloud reselling has become a big business.
The Business of Reselling the Cloud
A cloud reseller, sometimes referred to as a Value-Added Reseller (VAR), is most likely an IT software provider that complements their specialized service with additional functionality through a cloud provider. For example, a company offering design software may include a cloud provider’s storage service to enhance their product’s value. This partnership is a win-win for the reseller, and the cloud provider, enabling both to grow their business.
Reselling the Right Cloud Provider
VARs engaging in reselling have a lot to gain—but potentially just as much to lose. Reselling a cloud provider that doesn’t live up to expectations can destroy trust and permanently damage the relationship between the reseller and their customer. That’s why it’s imperative that resellers partner with a provider that understands the reseller’s commitments and responsibilities to their customer.
If you’re considering becoming a VAR, here are five variables you should look for when selecting the cloud provider you’re going to resell to your SMB customers.
Cybercrime is expected to cost companies an average of $6 trillion per year through 2021, and ransomware blackmailing has become a $2 billion criminal industry itself. When choosing a cloud provider to resell, be sure to understand the protocols they have in place to protect customer data; this includes firewalls, antivirus software, and digital encryption. It’s also important to assess their physical security measures, such as 24/7 facility surveillance, and a properly weather-proofed facility (for example, a hurricane-rated structure that is tucked away from flood zones).
Regulations and industry standards are changing—or being created—every day. SMBs can have a hard time keeping up and have started turning to the cloud. As a reseller, you want to be sure your cloud provider meets the industry standards that your customer’s framework is bound to, such as SOC 2, HIPAA, CJIS, or PCI. You should also be sure the provider you partner with is transparent about where your customer’s data is housed should there ever be a regulatory audit.
As your customer’s business grows, you want to be sure the cloud provider you’re reselling can grow with them—that’s the beauty of the cloud. There’s no need to purchase additional servers, or find the real estate to house them; instead, you or your customer can simply ask the cloud provider to allocate the additional resources needed to expand the cloud environment. Be sure to ask potential providers if they can ramp up quickly—generally within 24 hours—to support customer growth.
Because a portion of your reputation will hinge on the cloud provider you resell, you’ll want to be sure you work with a true partner, one that understands the importance of customer’s data, and will make themselves available 24/7/365. Be sure to inquire about the support that’s provided before selecting your partner.
Ease of Implementation
You want your customer’s migration to the cloud to be as smooth as possible—and once they’ve migrated, you don’t want them to have to worry about maintenance.
Types of Reseller Programs
There are essentially two types of reseller programs, but the five factors above should apply to both. Under “white label” programs, the reseller can rebrand the cloud products and services as their own, adding in management fees to make a profit. Other reseller programs involve promoting a specific cloud provider to make a commission. Both present an amazing opportunity for software vendors and resellers to profit from today’s rapid cloud adoption. DSM, Florida’s preferred cloud provider, offers reselling opportunities that can be lucrative for any organization. If you’re interested in joining our partner reseller group, speak with one of our specialists today.
CHECK OUT OUR INFOGRAPHIC THE BIG BUSINESS OF RESELLING THE CLOUD