Diversification is a principle commonly employed in the investment community and the reasons that drive its adoption are aplenty – from risk and hedging, entrance and exit costs, liquidity time horizons and the importance of analysing market trends to stay a step ahead. But did you know that the same can be applied when building your cloud portfolio? Because your end-customers sure have and they look towards you, as their IT solution provider to advise and guide them along their cloud journey.
The demand for IT service providers who diversify is strong, reveals Kaseya’s fifth annual managed service provider (MSP) Global Pricing Survey, which found that half of nearly 400 owners and operators of MSPs polled cited double digit top-line growth. Twenty three percent of respondents reported three year average annual monthly recurring revenue growth of more than 20%, while 30% cited an average growth rate of 11% to 20%. An Autotask report similarly pointed to solid growth, projecting growth rates in the 5% to 15% range. The Kaseya survey also noted that high-growth IT service providers were much more likely than their lower-growth counterparts to offer emerging services such as cloud monitoring services.
Here are a few reasons why you should diversify your cloud offering to future-proof your business, ensure operational stability, capture customer loyalty and maintain a competitive edge.
Setting up a one-stop shop
A successful business is one that positions itself in a sweet spot where it is able to balance client demand and value all whilst maintain a profitable and competitive business. In the world of cloud computing, that often materialises in the form of providing a combination of private, public and hybrid cloud services. Most of today’s top IT solutions providers understand that no two customers are the same – some may require the security that comes with a custom private cloud configuration while others may prioritise lower-cost, extensible features of a public cloud, or even a mix of both with a hybrid cloud approach depending on their business needs.
Routing back to the investment profile thinking, it’s all about helping your customer identify the best cloud combination to invest in – one which sufficiently address the specific business requirements in order to deliver the financial and operational benefits of cloud.
Moving to the “higher cloud”
One challenge in the channel is the ubiquity of the same suite of common cloud computing, data storage and data backup services. This should not only be seen as a challenge, but an opportunity for channel partners to offer a higher set of cloud services which enhances their business value proposition. Reason being, the more complex and highly customisable a suite of solutions is, the more tailored it is to the unique needs of the customer, the less a customer will be able to implement it or resolve an issue without engaging your partner expertise.
This bodes well for partners looking to make a positive impact on customer satisfaction for retention. A survey by Clutch, which measured small business customer satisfactory with IT service providers, points to the need for channel partners to take a wide-angle view of their customers’ needs. Using the Net Promoter Score (NPS) index, it was suggested that “smaller, specialized IT services firms may lack the ability to deliver strategic, top-level recommendations for their clients,” due to an overly narrow business focus.
By moving beyond basic serving offerings and focusing on consultation, integration and system implementation, channel partners will be able to increase profit potential, leading to higher margins and accelerated business growth.
Expanding into new verticals
Now, what if you were already specialised in a particular market and are looking for new avenues to add clients and bring revenue to your business? A possible answer to that would be to expand into a new vertical or specialty. With a diversified portfolio, partners are better poised to choose and equipped to ease into new industries with similar and different price points and needs. For instance, it may not be wise to sell enterprise level solutions to a small business as their needs and price points would be misaligned.
According to an IDC study, “most cloud mature organisations expect to be able to choose from multiple cloud providers based on location, policies, and governance principles”. In fact, their appetite to consume cloud services from a selection of IT solution providers grows as they optimise and inch ever closer to extracting maximum value from their cloud investments.
So you can see that diversifying your cloud offerings is mission critical towards your long-term business strategy. Capitalise and learn how you can diversify and expand your cloud practice today by visiting www.ingrammicrocloud.sg.