Increasing cloud adaption is bringing VARs and MSPs at the crossroads of their careers. Similarly, partners may stand to lose valuable affiliates who have helped grow their businesses. SaaS (Software-as-a-Service) and cloud are more than just buzzwords. They are redefining the way people do business and the way that they live in the name of cost-effectiveness, ease of use, and flexibility.
VARs and MSPs are poised to rethink and transition their marketing and sales options to a recurring revenue model—especially because their reluctance seems to be holding back partner sales of cloud solutions.
VARs and MSPs have long basked in their comfort zones of annuity-based or bundled solutions revenue models. However, as businesses give more focus to cost savings, the cloud is fast becoming an attractive alternative. Recurring revenue is something new to VARs and MSPs, and it may take time for them to leave the model they are accustomed to.
What can make VARs and MSPs change their mind? One thing is quite clear: VARs and MSPs are needed. End users trust them as advisors and want to be served by them.
A game plan that sells
Cloud providers or partners need to craft a compelling game plan that sells and a revenue scheme that is attractive to VARs and MSPs. The game plan may look like this:
Restructure the cloud sales team. The skills of people selling cloud services are totally different from those of people selling on-premise solutions. Companies need to revisit the cloud sales team setup and infuse new skills and competencies where needed.
Create a new sales team. A new sales team with an entirely new profile and a higher level of skills can be a good new start. Hiring parties need to make sure that the new hires possess the necessary business acumen, technical skills, and experience for an impactful kickoff.
Set the right incentive system. Most cloud sales are subscription-based deals with recurring revenues. However, in an integrated sales team model, one-time sales, especially of major products or services, do happen. Companies should devise a balanced sales incentive scheme so that sellers are not solely motivated to sell the one-time deals that are hard to predict and that do not ensure regular revenue. Another strategy is to bundle a number of value-added services around cloud offerings, which means added revenue for the company and increased commissions for the resellers.
Oblige sales team members to generate new customers. Growing sales is not as easy as sustaining sales. Companies need to get their sellers to agree on reasonable sales goals through the generation of new customers.
Instill in VARs and MSPs the benefits that they will get for their businesses. From a strategic standpoint, VARs and MSPs stand to get additional business through cross-selling opportunities. After winning their first sale, this could be an entry point into organizations for other cloud solutions like backup, security, or consultation as well as their traditional IT needs.
The multiple forces of change—new mobile technologies, social media, changing end user expectations—are impacting VAR and MSP options. Now that the door to the cloud is open, it is up to them whether they want to have the edge or lag behind.