ChannelTrends: What Are YOUR Clients Expecting from the Cloud?

Communication is a key element to business success and, when adding cloud services to your portfolio, there is no exception to the rule. A clear and concise discussion on the pros and cons of any new technology solution (or delivery method, in this case) is essential to setting the proper expectations. Without that conversation, your chances for building a successful cloud practice diminish significantly, leaving it up to your clients to decide if the initial and continued investment is worthwhile.

Conflicting information in this week’s news confirms the importance of proper communication and setting the right client expectations for your clients around the cloud.

Cloud and Virtualization Realities
Is the business community, as a whole, prepared for the cloud revolution? Perhaps not, according to Symantec’s 2011 Virtualization and Journey to the Cloud Survey, which included responses from 3,700 executives from 35 countries concerning the adoption and deployment of private and hybrid clouds, as well as virtualization technologies. The study uncovered some interesting (and concerning) points around the perceptions of cloud services and implementation strategies, which seems to call out the need for more education and communication. Are executive expectations being set properly by their internal IT staff or providers, or are the security lapses by some companies influencing their strategies?

According to the survey, more than 75 percent of organizations are discussing private and hybrid cloud deployments. While this doesn’t indicate these companies will select that route, it does appear that the public cloud creates some doubt in the mind of executives when it comes to their business-critical applications. Just 33 percent of respondents indicated their ERP, accounting or CRM systems have been moved to a virtual environment. Concerns over account, service or traffic hijacking; authentication vulnerabilities; access vulnerabilities; disaster recovery; and encryption are listed as contributing factors to this relatively conservative approach.

In addition to the security concerns, the study also showed gaps exist between business expectations of the cloud and the reality of what it can/should do. For example, while the survey showed 77 percent of organizations are considering private cloud storage systems (the goal); those that did deploy them indicated a number of challenges caused their expectations to fall short by 37 percent. For those indicating a need to reduce the complexity of their systems (84%), just over half (44%) were able to realize that goal.

This clearly indicates that some companies’ expectations are not being set properly, while in some cases the deployment may not be optimal. The survey was heavy with enterprise companies, which signals a large opportunity for solution providers with experience implementing and integrating cloud solutions. Consulting for mid-to enterprise companies may not be in the cards for many solution providers, but the misperceptions and need for guidance by small businesses sets the stage for a number of service options. In addition to offering public cloud services (agent program in some cases), a number of MSPs are creating their own virtual server farms to offer their own virtual solutions. As the demand for certain applications grows, they are brought “in house” by the provider and offered on a subscription basis. This approach has its downsides, as liability and security concerns must be addressed, and the time spent updating and maintaining the services and servers may eat significantly into profitability.

Whether you offer public, private or hybrid cloud services, setting the expectations is still key. Security concerns need to be addressed, including proactive network improvements and ensuring their personnel follow proper procedures (adhere to company security protocols). Network availability and performance (speed and quality) also need to be considered, ensuring their downtime is minimized through network upgrades and backup solutions. In addition, the extra cost of these services and projects need to be presented fairly and accurately, ensuring your clients know what they are getting into when they sign a contract.

Cloud is not just an option for many businesses, but a necessity. By setting the right expectations and building a proper plan for initial and long-term improvements, you can reduce the chances your clients will be disillusioned by the results.

MSPs Enjoying Cloud Success
A perfect illustration of how channel partners can capitalize on cloud comes from Joe Panettieri in one of his Talkin’ Cloud articles, in which he outlines the success coming from some of the top VARs and MSPs. The 50 companies identified in the group grew their annual cloud revenue an average of 47 percent between 2009 and 2010, to a total of more than $6 million (averages to more than $120,000 per provider). As we approach the half-way point in 2011, I’d love to hear more updates on how these service practices are performing, but indications continue to be positive across the industry.

The takeaway from the Talkin’ Cloud article is that solution providers who are focused on building their cloud services practices are seeing the results, keeping ahead of direct marketing competitors and, in many cases, their peers. In addition to communicating the proper expectations of these services, successful VARs and MSPs appear to offer a broad portfolio to their clients. According to Pannettieri, the top cloud providers are delivering hosted/SaaS email, virtual servers in the cloud, storage as a service, security as a service, hosted unified communications and other services. When combined with support and managed services, that creates a formidable offering that should meet the needs of most business clients, and lead to long-term success for solution providers.

Brian Sherman is founder of Tech Success Communications, specializing in editorial content and consulting for the IT channel. His previous roles include chief editor at Business Solutions magazine and industry alliances director with Autotask. Contact Brian at Bsherman@techsuccesscommunications.com.