Microsoft, Google Cloud Customers Need More From Solution Providers

Channel partners must evolve their offerings and core business models to help customers move to the cloud, and making a profit requires a major shift in how they develop, market and sell products and services.

That’s according to a new survey of 87 companies around the globe that resell and deploy Google Apps for Work and/or Microsoft Office 365. It was conducted by the Cloud Technology Alliance, comprised of independent software vendors in the cloud office ecosystem.

“There is a difference in the way channel partners sell cloud solutions and services to Microsoft and Google customers, and as the survey demonstrates, a knowledge of these differentiators will help solution providers be successful in the global shift to the cloud office,” said David Politis, alliance member and BetterCloud’s CEO.

Taylor Gould, alliance member and BetterCloud’s vice president of marketing, tells Channel Partners the surprising difference between the two platforms is the increase in choice expected by Microsoft customers.

“Google Apps partners on average work with [fewer] than five vendors and solution providers while Microsoft partners typically work with six to 10 vendors,” he said. “Further, in the Microsoft channel, 77 percent of respondents said they offer multiple vendors’ solutions in each category, while only 54 percent of Google’s channel partners offer alternative solutions.”

Google Apps partners tended to have a higher portion of their staff involved in sales than those that resell Microsoft offerings, according to the survey.

Half of 2014 revenues for Google Apps partners and 39 percent for Microsoft partners came from the sale of recurring cloud services. This demonstrates the “cloud IT shift is well under way and will only accelerate as Microsoft expects recurring cloud revenues to be higher than in 2014,” Gould said.

“Opportunities for the channel come through new and innovative vendors,” he said. “The top two criteria when deciding to work with a vendor are ‘strong market demand for a solution’ and ‘innovative technology.’ As more startups and companies from outside the United States bring their solutions to the market, they will find large and small channel partners eager to learn more.”

According to the survey, the average partner makes most of its profits from “professional services,” followed by “cloud solutions resale” and then “managed services.” Microsoft partners still have profitable hardware and on-premises software resale businesses, but the margins are lower.

Some 77 percent of partners reported that they have formal account management to manage customers after the initial sale. Also, nearly half reported that responding to inbound recruiting campaigns is the least important method when it comes to initiating new vendor relationships.

Leave a comment

Your email address will not be published. Required fields are marked *

The ID is: 89973