How cloud providers can find success in a crowded market
There is growing demand for cloud services, with 451 Research predicting cloud share to increase from 6.9 percent as of 2010 to 24.6 percent by 2016 in the worldwide cloud and hosting market. This demonstrates a significant opportunity for IT providers offering dedicated, shared and managed hosting services to create new revenue opportunities using the cloud. But it’s not without challenges: the market is already crowded with big players, with endless budgets, adding new cloud offerings to their repertoire, as well as smaller providers competing to quickly gain market share. This means cloud providers must get competitive and think strategically in order to gain new revenue from IaaS and find success in a crowded market.
How cloud providers can find success in a crowded market
A simple and effective approach to cloud success for IT providers is leveraging their local advantage. While the virtue of the cloud is that it can be accessed from anywhere, the location of that cloud still has a significant impact on performance and data sovereignty. For instance, since connection speed can be crucial for many businesses, a local data center that provides low latency to customers can play a major role when it comes to differentiating cloud service providers.
Ultimately, providers using their local advantage will then enable themselves to differentiate through exceptional flexibility, responsiveness and customer knowledge as well as offering first-class SLAs.
In addition to a local advantage, which is a strong selling point for hosting providers, there are other keys to cloud success. Based on insights and best practices from IT providers looking to win their share of the cloud market, we have found that the following emergent strategies helping them reap cloud’s advantages and differentiate from competition.
1. Make a platform available for re-sellers.
Like anywhere, there is power in a community of like-minded IT industry peers. Today, some hosting providers are offering IT infrastructure for cloud services to other service providers, such as value-added resellers, software vendors and other hosting companies and systems integrators. This forms a partner channel, which allows for strategic market alliances with vendors that are interested in offering cloud services, but do not want to build the infrastructure to host the solution.Watch Full Movie Online Streaming Online and Download
Typically, the offering is branded as the reseller’s white-labeled solution. When done correctly, this strategy can be very successful as was the case with Amsio, a managed hosting provider in the Netherlands, which built highly flexible, high-quality cloud platforms for a robust partner channel.
2. Offer specific cloud-based applications.
The aggressive push into the market by varying cloud players has commoditized the market to a degree, but offering more complex or niche cloud services can still provide a reliable way for providers to differentiate themselves and drive revenue.
By targeting a specific audience and crafting applications and services that cater to its needs, cloud service providers can stick out from the competition with expertise and know-how. Many of our customers are benefiting from providing cloud-based applications are inherently more complex to migrate or manage. For example, Fifosys, a UK-based service provider is using a hosted desktop approach to move into the cloud arena, while Gloo-IT is differentiating itself by specializing in cloud security services. It’s important to remember that, as the landscape continues to shift, hosting providers must be able to grow with market demand for more cloud-based service offerings in order to capture a larger part of their customers’ IT budgets.
3. Customize the package.
The major strength of big cloud providers — their size — can also be a weakness. Multinational businesses can mean an impersonal relationship with customers and pricing bundles that don’t meet their needs.
For local providers competing against international players, there’s a huge opportunity to differentiate by flexibility in how a service is delivered, enabling cloud services to be customized to the specific needs of each customer. For example, Zurich based CloudSigma offers non-bundled resource sizing, choice of operation system and short billing cycles will go a long way in edging out cloud giants and establishing customer loyalty.
This strategy is particularly effective for pure-play cloud providers because customers can then purchase just the computing resources they need, only when they need it. We’ve seen many of our IaaS cloud providers do this effectively. Ultimately, a cloud services provider that really knows the target market for the business can optimize marketing and sales here by offering customers flexible pricing plans and absolutely exceptional service. Companies will appreciate a premium price point for a provider that intimately knows the obstacles across the local business landscape.
4. Hanging hats on hybrid.
As more enterprises combine public cloud, private cloud and on-premise infrastructure for data and services, there is an imminent convergence of roles for service providers to move away from pure infrastructure provisioning and, like systems integrators, become the trusted orchestrators of cloud services.
As many traditional hosting providers adapt accordingly, they are immediately benefiting their customers by offering the choice of where to put their applications and what mix of IT service delivery models they can employ. A hybrid model means customers don’t have to sacrifice speed for flexibility for service offerings: the choice of combining the scalability of the public cloud with the security of a private cloud ensures customers can reap the best of each model to suit the unique needs of their businesses.
As cloud computing continues to disrupt traditional roles of systems integrators and hosting providers, cloud services providers that create a strategy for success and adopt a hybrid model can guarantee that they’re well-positioned against both global and local competition.
The success of these business strategies will ultimately depend on the data center from which cloud services are delivered. Cloud computing is grounded in determining availability, performance and commercial flexibility, and service providers must determine the extent to which the data center meets these characteristics.
According to our recent survey of European and U.S. service providers, almost half (47 percent) of European service providers choose carrier neutral data centers over proprietary facilities to house their IT platforms. This suggests carrier neutral data centers will be the preferred choice to build and operate cloud platforms as well — particularly with the future of cloud as hybrid — because they can offer quality, scalability of power and space and the opportunity to interconnect with multiple carriers and global cloud service providers.
This post was originally published on WIRED Innovation Insight.