Bringing the Cloud Down to Earth

CompTIA President CEO Todd Thibodeaux kicked off Breakaway 2011 yesterday morning saying, “We’ve lined up our most robust slate of content and training for all of you, so that you can truly accelerate your business.” He wasn’t exaggerating, and the workshops starting shortly after morning keynotes concluded backed him up.

I headed for the “Cloud Business Development Workshop” early.  Good thing. The session was SRO – Standing Room Only.

So many VARs wanted to attend the workshop that the afternoon session had to be moved to a section of the International Ballroom here at the Washington Hilton.  And we didn’t do a bad job filling that space either.

The reason for the cloud crowd is simple: IT is migrating that way and won’t be reversing direction anytime soon.  Choose your research source for confirmation; you’ll find the same answer. (I prefer CompTIA Research, of course, whose recent study found more than 80% of channel companies report having “heavy to moderate” involvement in the cloud.)
Workshop leader Dave Sobel, CEO of EvolveTechnologies in Fairfax, Va., told session attenders that most research predicts more than half of all businesses – of every size, across every geography – will move at least some portion of their IT infrastructure into the cloud by 2012.  What’s more is analysts and forecasters expect cloud computing – in all its varieties – to generate as much as $250 billion in economic impact by 2015.

No wonder VARs of all shapes and sizes are reaching for the lofty realm of the cloud.  But VARs won’t be able to just float to those heights. Sobel cautioned would-be cloud solution providers that success would require investments, especially in sales and marketing.  Transformation won’t be overnight and won’t be without risks.

Sobel said VARs converting on-premise services to cloud solutions can expect a business replacement ratio of 2 to 1.  In other words, on average it takes two cloud deals to produce the same revenue of one on-premise deal.

No need to panic, ‘though, Sobel reassured: “There is time to do this, but the time to start is now.”

Sobel, a speaker and trainer for CompTIA for several years and an oft-quoted cloud computing expert, offered eager VARs this advice on sales priorities for cloud services transformation:

1. Start with an integrated sales team.  Offer cloud deployment as an option for existing solutions. No need to sell all or nothing right away.


2. Evolve to a separate cloud sales team when possible. Your timetable needs to match your growth curve – and your customers’ cloud adoption curve.


3. Determine the resources needed to support your new cloud sales model.  Keep in mind selling cloud is a solutions sale, not a product buy.  “If sales guys are comfortable selling widgets, they may not be successful selling cloud solutions,” Sobel said.


4. Focus your sales team on new customer acquisition over just winning deals. Cloud solutions are recurring-revenue relationships rather than a series of individual transactions. Sobel described the salespersons job as similar to an insurance agent: The mission is acquiring, keeping and growing relationships with customers.

When it comes to marketing cloud services, Sobel gave these pieces of advice:

1. Start with demand-generation.  Keep in mind the 2:1 replacement ratio means you need twice as many deals twice as fast as you once did to keep your business healthy.


2. Be honest about your cloud capabilities.  Don’t market ahead of your competency.  And be honest about your marketing capabilities.  IT services are your core competency. There’s no shame in hiring specialized marketing resources or an outside agency.


3. Develop and improve your website. Make your site a platform for establishing your organization as cloud savvy.


4. Invest in developing educational material for your customers and prospects – and actively market its availability. As Sobel quipped, “Educate your customers before your competitors do. Someone will teach them about the cloud. Make it you!”


5. Introduce digital marketing tactics, especially social media.  Selling cloud is a consultative process, and the best way to become a trusted advisor is through dialog.  Tomorrow’s cloud buyers are conversing through social media today.

 

The cloud workshop included several breakout sessions, when participants discussed their ideas and then shared them with the crowd.  But the training wasn’t all talk.  Each participant received a Participant Guide and 10-Week Guide for cloud business development from the CompTIA Cloud/SaaS Community.