When it comes to selling cloud services, VARs should not overlook the enormous market potential small to mid-sized businesses have to offer. Main Street requires the same storage, processing, and security as Wall Street, and they're much easier to approach.
How big is this market? A World Bank Group study suggests there are 365-445 million micro, small, and medium enterprises in emerging markets: 25-30 million are formal SMEs; 55-70 million are formal micro enterprises; and 285-345 million are informal enterprises. This represents an enormous and often untapped market that is waiting for cloud services – if someone could just explain the cloud in a manner in which SMBs may relate to its business benefits.
Picture yourself as the owner of a small to mid-sized organization. Often your services are predicated on offering tangible goods and services. Those services range from an inventory that can be physically handled or inspected by customers, to services that produce a definite and measurable outcome. When it comes to setting up their IT support systems, naturally they gravitate toward a physical box in the office that is connected to a number of desktop devices.
These tangible IT devices are viewed as one of the capital expenses that can physically be depreciated on the balance sheet. It's sometimes difficult for these business owners to grasp the concept of virtualizing their entire back office IT functions. But times are changing quickly, and those value-added resellers who can relate the features, advantages, and benefits of cloud services stand to gain considerable revenue from an underserved market.
When approaching small to mid-sized businesses, resellers need to highlight the pain points of maintaining their own IT infrastructure as well as underscore the business benefit of outsourcing this utility. There are myriad horrors waiting to descend upon the servers stored under desks, in closets, or in the basement. These situations can range from soaking the server with a runaway mop bucket to a brick oven fire in the pizza restaurant two doors down, taking out the entire strip mall containing your office. The challenges that a small to mid-sized business faces are unique, but not uncommon when it comes to the solution for preserving IT assets.
For many SMBs the cloud is a scary, autonomous service that may only be embraced by the likes of juggernauts such as Amazon, The Home Depot, and Walmart. But nothing could be further from the truth. In fact, SMBs are often using cloud services without even realizing it. Companies that utilize QuickBooks have already taken their first steps into the cloud by embracing finance-as-a-service. It's not a far leap of faith to extend the same trust that they have within their accounting application and point out the benefits of storing and protecting all their data and applications offsite.
If You Offer IT, They Will Come
Here are a couple of examples of how smaller organizations are currently reaping the benefits of cloud services.
A fifth-generation business, E.N. BISSO is one of Louisiana's top suppliers of tugboat and towing services. The company supported its fleet of 15 vessels for docking and undocking of ocean-going vessels and barge combination units via a small data center in its main location, linked to a small branch office. However, maintaining the IT infrastructure became more than a full-time job, pulling staff away from implementing more strategic maritime applications and achieving its virtualization goal. E.N. BISSO moved half of its physical servers in a colocation environment, with virtual machines running in the cloud – utilizing VMware cloud and vCloud Director to manage services from any internet connection. The flexible cloud-based offering ensured the company could still virtualize physical devices, while freeing staff to focus on more business-critical concerns. In addition, E.N. BISSO leveraged disaster recovery services, ensuring the replication and backup of files.
Hendrix Orthodontics is a small, growing practice facing many of the same Infrastructure Lifecycle Management challenges associated with most large businesses. The company faced a choice: Undertake an expensive infrastructure upgrade – likely to recur every five years – or evolve into a more centralized, secure, and HIPAA-compliant IT environment. Hendrix elected to transition approximately 50 PCs and three data servers from its unsupported Windows XP operating system into the cloud, in addition to hosting its company files, patient records, charts, and x-rays.
SMB Cloud Services Cheat Sheet
Below is a quick reference guide taken from real-world examples to help VARs succeed in selling cloud services.
• Listen to the customer’s problem, then position the relevant solution. Be sympathetic - understand what bothers them.
• When a business owners says, “I need a new server, we are doing development and testing,” it is prime for a cloud service.
• When you hear, “Every time I gain a new customer, I have to buy a new mini workstation,” the VAR needs to position the cloud so customers can avoid the hassle.
• Offer to protect companies’ business apps such as email, HR, payroll, and SQL databases by replicating and storing data in the cloud.
• If not knowing where the cloud is makes them feel uncomfortable, give them the data center address and let them know they can visit/look at the space and their racks whenever they want. Even the cloud has a physical address.
• Replacing hardware is a capital expense. Mention that hardware purchases take up valuable office space and also consume valuable capital that can be used for other important business functions. Transitioning to an operational expense model frees up cash flow to make other relevant purchases.
• Underscore that the life expectancy of hardware is 3-5 years; they are responsible for replacing, maintaining, patching and upgrading software licenses. The cloud provider does all this for them.
• Emphasize that data and application redundancy are huge benefits of being in the cloud.
Small to medium-sized businesses’ IT services should be viewed in the same manner as electricity, plumbing, and even internet services. They are all a necessary utility. No self-respecting business owner would build a power plant in the basement and maintain his or her own electrical services or construct a server farm to establish internet connectivity. Given this mentality, why would those individuals want to build and maintain an IT infrastructure and applications when there is an existing service that can do it more efficiently and affordably?
The cloud is now a ubiquitous and common denominator that's easily accessible by any size business. The same processing power, redundancy, and data security that is available to Amazon and Walmart is also available to the mom and pop shop on Main Street. Through intelligent user-friendly interfaces, SMB organizations can tap into the power of the cloud to alleviate many daily frustrations, while also preserving their dream and legacy.
Blake Allen is business development manager at Venyu (www.venyu.com).
Edited by Alicia Young