Johannesburg, 24 Oct 2017
South African organisations are rapidly shifting towards the cloud for productivity software, seeing it as an opportunity to improve flexibility and reduce costs. The result is that the channel needs to rethink its approach to selling software and measuring revenue growth, says Othelo Vieira, Microsoft CSP product manager at Tarsus On Demand.
Vieira says migrating to Office 365 via CSP offers enterprises more freedom and flexibility around their usage of software than the traditional approach of buying software licences. Many companies appreciate having the ability to rapidly add or subtract monthly subscriptions to Microsoft's Office 365 software in line with their business needs.
For example, an organisation that brings five contractors on board for three months to work on a project, can easily provision them each with access to Office 365 for the time they need it and then cancel the subscription once they have finished their work. This removes much of the nuisance and expense of ensuring everyone who needs Office 365 has it, without investing in excess licences.
In addition, many organisations report that moving to the cloud saves them substantial amounts of money on infrastructure hardware and server software licences, as well as the associated support costs, says Vieira. Rather than needing to invest in new server and storage capacity as they add new users, companies simply purchase more subscriptions and leave managing the data centre requirements to Microsoft.
"Other benefits include improved uptime, enhanced disaster recovery capabilities, a lower administration burden, since there are no patches and updates to be applied on client devices, and better IT security," he adds.
"Workers also benefit from secure anywhere, anytime access to information and applications without the need for VPN solutions. The result, overall, is a tidier, more cost-effective, more stable e-mail and productivity environment."
Vieira says resellers need to rethink how they sell and measure success if they are to capitalise on the shift towards the cloud. Rather than banking on margin and services revenues from making large but infrequent software sales to their clients, they need to embrace a move towards a predictable stream of annuity revenues.
The shift from big sales to a stream of monthly revenues brings a number of benefits to resellers. Rather than speaking to customers only when they upgrade their software or need to buy a new batch of licences, they can bill customers each month and engage with them more regularly, says Vieira.
That means they will learn more about the customer's business and uncover new opportunities to sell them other products and services. In addition, resellers can create more stickiness in their customer relationships since they will have a long-term relationship with the client, according to Vieira.
Resellers also benefit from a more predictable stream of revenues, one that is more immune to economic conditions than the old model of large-scale, capital-intensive upgrades of the entire IT environment to new PC and server software and hardware.
"Many companies are starting with applications such as Office 365 as they move to the cloud, and resellers that position themselves strongly in this space will be ready when their customers start moving bigger, more mission-critical workloads to the cloud," Vieira says. "As the cloud takes off, resellers will need to reinvent their businesses and their relationships with their clients."
Share