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Microsoft tells partners... Cloud is no longer a trend

21 Jul 2014

By 2017, public cloud IT spending will reach close to US$108 billion, representing 5X the growth of the IT industry.

Following IDC’s forecast, Diane Golshan, US Partner Community Lead, Microsoft told the Worldwide Partner Conference 2014 that cloud is no longer a trend.

Given that things change at incredible rates when innovation takes hold across the tech industry, Golshan believes “now is the time to invest and position yourself for the future.”

“Cloud-oriented partners are outperforming partners with other business models across the industry,” Golshan claims.

“They gain 1.3X more revenue per employee on top of the gross profit.”

Alluding to the Microsoft commissioned IDC report, Successful Cloud Partners 2.0, Golshan believes that “recurring revenue is the new success metric.”

But why is recurring revenue so powerful?

“Having long-term customers, predictability, cash flow, and higher company valuations can appeal to business owners and executives,” she adds.

“According to IDC research, cloud-oriented partners reported achieving more than 1.6 times the recurring revenue than other partners.”

Speaking at WPC 2014, Golshan advised parters to examine their existing business model and profit pools to plan their individual transition to the cloud.

• Transact – The resale of someone else’s hardware and/or software.

• Project Services – Fixed services that align with deploying hardware, software or application development.

• Managed Services – Standardised, tiered services that enable a partner to add value to their customer while building a recurring revenue stream (e.g., subscriptions or monthly billings).

• IP Services – The monetisation of Intellectual Property through software development; packaged application or business process.

“So, how do you get started?” Golshan asks.

“First, understand your profit pools. Cloud can be a great opportunity to build additional services that complement your business and further your relationship with your customer.

“Understanding how you currently serve your market by profit pool will give you the insight to help build cloud services into your business.”

Check back to Techday later this week for an in-depth analysis of ‘Successful Cloud Partners 2.0’ and what this means for Kiwi partners

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