Cloud adoption has skyrocketed over the last few years, making cloud computing one of the biggest tech industry disruptors in quite some time. It’s been even more disruptive for software vendors, with 85% of all new software being built for the cloud. How are these companies competing in the age of cloud computing? By reselling cloud services.
What is a Cloud Reseller?
Sometimes referred to as a Valued-Added Reseller (VAR), a cloud reseller is generally an IT software provider that complements their specialized service with additional functionality through a cloud provider. For example, a company offering photo editing software may include a cloud providers’ storage service to enhance their product’s value. Under “white label” programs, the reseller can rebrand the cloud products and services, such as storage and software licenses, as their own. Of course, they add in management fees to make a profit. Other reseller programs involve promoting a specific cloud provider to make a commission. Using the same example above, the photo editing software company would recommend a customer purchase storage through a specific cloud provider. If the customer signs up, the cloud provider then offers commission on the sale.
Driving Retention and Growth
It’s well-known that it costs five times as much to attract a new customer than to keep an existing one. Yet 44% of companies have a greater focus on customer acquisition over retention. Reselling the cloud is a win-win, however, as it provides resellers the opportunity to do both. By offering additional products or services, resellers can provide more value to existing customers and capture new sales through upselling or cross-selling. For example, a reseller’s customer may have already purchased Microsoft Office 365, and like many O365 users, they may not understand that Microsoft doesn’t offer complete data protection and that they are responsible for their data. So, the reseller may offer the customer Data Protection as a Service (DPaaS) which they’ve purchased through a cloud provider, or they may recommend a provider’s DPaaS in order to gain commission. Having a targeted portfolio of cloud services that could benefit customers and prospects makes a company much more valuable, helping to drive retention and growth. Offering these services can also be especially valuable when pursuing small businesses, who may not be ready to go all-in with a cloud provider on their own.
Easy to Implement Services
While retention and acquisition of customers are the biggest benefits of reselling the cloud, there are other aspects that make it a great opportunity. Depending on which cloud provider a reseller works with, offering a new service that could benefit a client or customer can be simple. If a customer could benefit from a cloud service not currently on the resellers menu, they can quickly select new products from the cloud provider, add them to their catalog, complete the sale, and then manage the customer. Of course, if they’re simply recommending a cloud provider’s service for commission, they also have nothing to lose.
Cloud adoption is booming. The global market reached $260 billion last year, and customer knowledge of available services is growing. This presents an amazing opportunity for software vendors and resellers to profit from this rapid cloud adoption. DSM, Florida’s preferred cloud provider, offers reselling opportunities that can be very 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