A cost-first approach may be stifling the channel’s cloud revenues, warns Claranet

Shift required to drive home true ROI of adopting cloud services

The channel’s emphasis on cost-savings rather than the broader benefits of cloud, risks turning off potential customers. Concerns were voiced at Claranet’s partner seminar last month - that although businesses, particularly SMEs, are alive to the opportunities posed by cloud, they shy away when it comes to cost. Unless resellers can drive home the messages about the true ROI of cloud they will continue to fall at this hurdle, Claranet warns today.

Simon Bearne, Sales Director at Claranet, says that the gulf between the channel’s perception of the primary selling points of cloud and those reported by end-users, must be closed if resellers are to drive their sales of cloud services:

Rather than leading with cost-savings, which in fact do not always materialise, resellers should focus on the benefits that cloud brings, which end-users say they are actively looking for: flexibility, scalability and agility. These areas can all potentially be measured, and the challenge for the channel in 2014 is to help end-users understand these wider benefits, and to help them evaluate these in building their case for adopting cloud services, as well as to measure their ROI post-migration.”

Research from the Cloud Industry Forum (CIF) supports the messages coming from Claranet and reveals a disconnect between the channel and end-users when it comes to drivers for cloud adoption. When asked what they perceived the primary end-user motives for cloud to be, 65 per cent of resellers selected cost-savings compared to on-premises solutions, followed closely by a reduction in capital expenditure (48 per cent). This is, however, not supported by Claranet’s own research into adoption trends, which reveals that while cost is important, the primary reasons for adoption relate to flexibility (71 per cent), a need for scalability (66 per cent) and 24/7 service dependence (63 per cent).

Simon concludes:

The channel must better align their sales pitches with the needs and wants of end-users, clearly demonstrating the wider benefits of cloud services to help support the case for adoption. Costs are of course incredibly important, particularly for cash-strapped SMEs, but the benefits of cloud go far beyond the purse strings and reducing ROI calculations for cloud to cost alone doesn’t do it justice. There is a risk that potential customers will just not see the full picture of how cloud could benefit them.”

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