Transforming On-Premise Offerings to a Cloud Model: Five Keys for Solution Provider and ISV Success

More and more customers are attracted to the cloud for its intuitive, easy-to-adopt design. CIOs are more eager than ever to adopt such solutions, with 70 percent mapping out a cloud-centric IT strategy for 2016 according to IDC's Cloud Services: Global Overview. And in turn, solution providers, VARs, and ISVs are evolving their solutions that have traditionally been deployed on-premise. It's no surprise that prioritizing the cloud adds to a brand's value proposition - IDC found that those that have taken the leap have cited a 10 percent growth in revenue over competitors sticking with legacy methods.

However, the transformation process isn't an easy one, and Microsoft Dynamics and add-on solution providers must do their homework before migrating their offerings into a cloud delivery model. And end customers should expect transparency about "what's under the hood" of their cloud solution . Now is the time to embrace the cloud, and here are five principles that can help ensure big results:

1. Stay financially conscious: If you've looked into offering more cloud solutions to your customers, you've likely discovered that the working capital required for a cloud business model is much higher up-front. The traditional on premise model, selling software licenses for example, helps pay for the day-to-day business operations at the beginning of a new project.  But in a cloud model, selling subscriptions, creates a longer ramp up time for working capital. A major cloud migration demands high-level coordination of financial resources. From short-term capital investment strategies to long-term maintenance and operational expenses, a company must analyze and manage itself through the unique and evolving financial demands of the off-premise arena. During this shift, it is critical to establish short and medium term cash flow requirements and understand the business' key performance indicators.

2. Embrace a cloud-first sales model: Businesses and consumers in all sectors are excited about the convenience and cost-effectiveness of the cloud, and new sales and marketing approaches must follow. Your sales and marketing efforts should emphasize cloud advantages such as pay-as-you-go value, implementation speed and customizable feature sets to boost their visibility in an increasingly cloud-centric economy. More importantly, a mindset shift should take place because the actual moment of a cloud sale is only the beginning of the relationship. Solution providers should think of cloud and managed services deals as long term in nature.

3. Develop sales opportunities: Cloud service models are distinct from other forms of licensing and installation-based approaches, and offer plenty of chances for sales representatives bolster their customer's productivity with new service options. Solution provider organizations must not only shift their approach, but their training and incentive plans to help teams embrace the flexibility of the cloud and the incremental upsells that are facilitated by these solutions. In addition, the teams should be structured to maintain long term "trusted advisor" relationships with customers, as cloud revenue is maximized by longevity.  

4. Partner up for a stronger technical strategy:   Partnering with a cloud service provider versus building out your cloud services can help speed the transformation process. No matter what migration strategy a solutions provider selects, it must develop a strong and transparent cloud offering from the very start. Technical factors such as network availability, data security, regulatory compliance and infrastructure visibility determine the quality of your offering. Therefore, solution providers must select a cloud partner with careful attention to their protocols, certifications, and track record.

5. Ensure operational readiness: Research from Aberdeen shows that the biggest barrier to successful cloud computing is not technology, it is people and processes. Change management is the cause of more than 60 percent of downtime created by good intentioned people who make modifications to the platform. All parts of the organization will need to work together to support the cloud business model. Even for an organization accustomed to standardization with well-documented processes and centralized IT governance and access, a cloud environment poses new challenges that solution providers will need to address. Ensuring that every employee understands the protocols that support the reliability and performance of a solution and that every employee is fluent in the language of the cloud is key to operational readiness. From discussions of SLAs to the integration of unique offerings across platforms, your entire team will have to be well-versed in all things cloud in order to ensure a holistic customer support posture.