How to make cloud computing a lucrative business – System Integrator’s take

Indian System Integration and Reseller Business in the IT industry mainly comprises software and hardware. Its legacy layers include National Distributors, Regional Distributors, Value Added Distributors, Dealers, Channel Partners, and Resellers. As Cloud computing is an emerging alternative to on-premise hardware and software deployment, the channel community needs to evaluate the opportunities and threats it brings to their business. Let us understand them in detail by exploring the following points.

A paradigm shift in the current business model

The current business model is about stocking software and hardware products and reselling them down the channel or to the end customers. Cloud Computing operates on a different business model of pay as you use. The pricing is open, and the end customers have a choice to buy directly from the provider. Microsoft, Amazon, Google, Zoho etc., are more inclined to direct business and extend petty margins to the resellers that do not compensate for the cost of acquiring the customer.

Pricing Patterns and Renewal Policies

Most tech giants start with unbelievably low pricing (commission is also low on customer acquisition) and gradually increase the price yearly as the end customer starts depending on the services. They have a complicated margin-sharing policy on renewals leading to unattractive earnings. They also change the policies to suit their direct customer-centric strategy. It is like selling an insurance policy, hoping for robust annual income for years. When renewal is due, the customer asks for a discount or purchases directly.

All the Hard work for Petty Earnings

The end customer has multiple requirements: Cloud Storage, Cloud Backup, Device Hardening, End Point Control, Application Virtualization, and Application Hosting. Each requirement requires dealing with a different service provider. It takes a lot of hard work initially to help the customer set up cloud services for each requirement from a different service provider. The margins are insufficient for the acquisition of the customer and initial set-up. Next year when the renewal is due, the customer may renew directly or with another reseller who gives more discount.

Cannibalization of On-Premise Solutions by Cloud-Computing

In the long run, cloud computing turns out to be more expensive than on-premise solutions. It also creates undesired dependence of the customer on the service provider. But the flood of advertisements and social media marketing drives customers to move from on-premise to cloud computing. The cannibalization of on-premise solutions because cloud computing is coming sooner than traditional channel players can imagine. The biggest question is: what to offer when the end customer demands cloud computing? We understand this dilemma of a majority of traditional channel players.

Meet BLACKbox OneCloud

We have fixed this strategic problem. Check the following points.

1. We are not selling the subscription to BLACKbox OneCloud online on our website.
2. It is a single agent, single service, and single cloud meeting all the requirements of MSMEs of Cloud Storage, Cloud Backup, Device Hardening, End Point Control, Application Virtualization, and Application Hosting. It is far simpler than dealing with multiple cloud service providers and setting up customers’ requirements.
3. It turns out to be a cost-effective proposition for the customer. It is seventy-five per cent more cost-effective when comparing BLACKbox OneCloud with a combination of multiple cloud service providers for multiple requirements.
4. The initial and renewal margins are lucrative to appreciate the efforts to acquire the customer and set up the requirements.
5. Within the first eleven months, if the customer decides to move from BLACKbox OneCloud to on-premise BLACKbox, they can do it by paying the difference.

BLACKbox OneCloud is designed for MSMEs to suit their pocket and requirements. It is Simple, Effective, Affordable, Dependable, and Scalable.