Finding Profit In The Cloud

Cloud computing has evolved from hotly debated disruptive technology to the status quo in a very short period of time, with adoption ripe in most sectors. There has been a huge shift in the way organisations think about the cloud; so vast, in fact, that many resellers still need to adapt their business models to keep up with modern businesses’ demands.

And it’s a genuine challenge; shifting from a world in which most of your revenue is made from up-front license sales, bi-yearly software refreshes, normal maintenance and support contracts, to a different world of cloud channel economics, persistent revenue share and the new opportunities for generating value it presents.

Over the years, software resellers will have had to make a number of adjustments to their enterprise software strategy; choosing an operating system, vendor or vendors to support and resell, upskilling and retaining staff with incredibly distinctive qualifications to sell and deploy the software installations they need – with specific knowledge of different vertical sectors.

And every job was a fresh challenge; rip up the book (and all preceding code) and start again, even if selling a solution into another customer in the same sector! Ending this wasteful cycle is arguably one of the greatest boons the cloud era has brought to the reseller and ISV community – at least, to those who have embraced it.

Not all cloud solutions are created equal, however. Some simply migrate legacy workflows and processes and deliver them via the web. This is no more cloud computing than a drawing of an elephant is an elephant – it simply shifts the problem into off-premise servers. It’s amazing that even now this ‘cloudwashing’ is being evangelised by some really enormous software companies, people who really should know better.

In a true cloud environment – a multi-tenant, Internet based software deployment hosted, maintained, upgraded and cared for – the reseller opportunity lies not just in the persistent revenue stream cloud affords and the up-front deployment and migration investment, but in extending that platform into specific verticals. With the right cloud system, the same ‘apps’ opportunity that exists in the smartphone world exists in the enterprise software market too; ISVs and resellers can code once for a specific vertical and resell thousands of times.

The opportunity for resellers to move on from simply selling a fixed, on-premise product, to producing highly tailored apps tailored for particular industries displays the single biggest shift cloud computing offers to resellers – and arguably the last great shift in the enterprise software business. You’re not just in the deployment business, you’re a software vendor yourself, specialised in a business vertical the cloud provider you partner with wants you to innovate for.

In some cases, an application developed for one vertical industry could be tweaked and redeployed for another – and before you know it, you could go from supplying software for tractor sales (niche) to used car sales (less niche) and so on. This is not a million miles away to Rovio’s Angry Birds spin-offs – each iteration representing significantly less hard work and grit than the original, building and expanding on them and going after new audiences each time.

To prosper in the cloud era requires change. The pace of change is accelerating and you can bet that your competition is gearing up to the challenge in their own way, at their own pace. Be ahead of the pack and you’ll find yourself in a more profitable, more satisfying trade, focussed on solving customer problems across an industry instead of a single business.

Martin Painter has over 20 years of international software solutions experience in areas of consulting, product management, marketing and sales. Martin began his career in the CPG (FMCG) sector establishing the initial retail merchandise systems for the UK retail chain Sainsbury’s before moving into management consulting with retail software across EMEA. In a company move to Australia, Martin established and ran the software division for global research company ACNielsen in Australasia and Asia. Moving to the US, he spent several years as global Product Manager for ACNielsen based in Dallas Texas before a move back to Europe as VP Global Marketing for software. After a period spent with B2B integration company Sterling Commerce, Martin was recruited as NetSuite first international employee establishing EMEA operations in 2003. Since then he has established the very successful EMEA channel for NetSuite and continues to be directly involved in sales and business expansion.