Not that long ago, on-premise software was the primary choice for most enterprise software.

Service providers generated revenue from implementing and supporting these on-premise systems.

Now, cloud threatens to change how managed service providers do business.

The days of running a successful MSP business installing products like Microsoft Exchange are quickly coming to an end. MSPs will no longer be able to depend on revenue from on-premise software.

The good news is, at the same time that cloud is causing a disruption in the industry, it is also opening new opportunities for MSPs to generate revenue (providing they are ready to dive into cloud).

 

How Can MSPs Make Money From Cloud?

1. Reselling cloud services: While selling cloud services like Amazon Web Services (AWS) and Microsoft Azure are common, they are just the beginning.

2. Managing and optimizing your customer’s cloud services: Managing your customer’s cloud services allows you to add real value. You can optimize their services and implement best practices that will help them get the best performance for the cost.

Optimizing is not a once-and-done event.

It requires ongoing diligence to ensure you find instances, volumes, and other resources that are not being used, and rightsize them at the right times to save your customers money.

3. Migrating your customers to cloud: Helping your customers migrate to cloud can be an opportunity to get to know the internals of their business. That way, when they need additional services, you’re the one they trust.

 

Making the Most of Your Cloud Opportunities

1. Get your cloud expertise now: If you haven’t already started learning about how to manage cloud, what are you waiting for?

Sign up for the major cloud service provider of your choice and get familiar with their services. After that, take the available training.

There are certification programs that will help you build trust with customers. Another option to get you started faster is to hire talent that already has cloud expertise.

2. Find your market: You can’t be the perfect service provider for all markets. Well, you could try, but don’t expect incredible results.

Instead, become the best in your niche.

For example, let’s say you have a client that has a chain of dentistry offices. You’ve learned all about their software, including which providers are wonderful (and which ones aren’t).

Use this knowledge to become the best MSP for dentist offices by combining services to provide the best customized cloud service packages for their market.

Make sure your salespeople are knowledgeable of these needs so they can customize a solution for each chain.

3. Create your packages: Once you have your niche market, create packages that are specific to that niche.

If you’re not sure which services would be helpful, ask some of your existing customers what would help them.

4. Train your sales team: A huge out-of-pocket expense for on-premise software can cause cash flow problems for many businesses. With cloud, your customers get a predictable cost that they can scale as needed.

This can improve their cash flow for their business.

Have your sales team show your prospects how the cost of entry is much higher with on-premise software, requiring that they buy software, software support, hardware, backup devices, and of course, the talent to develop those systems.

This requires a huge capital expense.

With cloud, there is no huge upfront cost. You pay for what you need, when you need it and it becomes operational expense.

5. Change your sales tactics: Your sales team needs to evolve and learn how to sell cloud to their prospects. This will involve a sales staff whose job it is to understand what the customer needs and find a cloud solution based on this understanding.

Once sold, you need a sales team that can expand upon this knowledge and create additional recurring revenue based on the solutions that have already been sold.

6. Make alliances to become your customer’s one-stop shop: Many smaller MSPs can’t provide all of the services their customers need. Instead, it’s better to fill those service gaps by forming alliances with other vendors.

It’s 2017; cloud is here and your customers will likely take advantage of what cloud has to offer.

Will your MSP business be ready to reap these rewards for years to come?

 

Kirill Bensonoff is a seasoned entrepreneur and the founder of Unigma, a unified cloud management platform. Kirill blogs regularly about cloud, tech and growing your managed services business. He can be reached at kirill@unigma.com.