The Single Biggest Mistake MSP’s Make When Selling Cloud Services

Richard Tubb

cloud The past few years have seen a paradigm shift in how IT businesses make their money. It’s no longer possible for MSP’s to survive on the margins that come with selling software and hardware. Clients are now looking beyond traditional on-site solutions, servers and hardware. They have their sight firmly set on the Cloud.

It’s easy to understand why. Whereas traditional on-site solutions were slow and costly to plan and deploy – often requiring days of an IT suppliers time, plus up front and considerable payments for servers and software, Cloud services are typically very rapid to deploy. Cloud services also typically don’t require an upfront investment. Instead the client can pay for the services they use on a flexible monthly basis.

All of this can lead most businesses, including IT Solution Providers and Managed Services Providers, to believe that the Cloud is simply “cheaper”.

The single biggest mistake an MSP can make when selling Cloud Services is sell based on the fact the Cloud is “cheaper”.

Focus on Value, Not Cost

While there is certainly a market for MSP’s who solely want to help their clients save money by moving to the Cloud, any business based on cost-cutting alone is a precarious and fragile one. Winning business based on cost is a race to the bottom, and is rarely sustainable.

The true reason MSP’s should be advocating a move to the Cloud is not based on cost savings, but based on flexibility and increased features.

  • Helping a client move from traditional on-site server based email and file storage solution to a Cloud hosted solution does reduce maintenance costs for the client. But it also offers amazing flexibility, allowing the clients workforce, clients and suppliers to work and collaborate remotely. With services such as Google Apps or Microsoft Sharepoint, two or more people can work on a document simultaneously – with edits, additions and corrections seen in real-time by all parties, wherever in the world they may be. That’s powerful.
  • Migrating a client away from a traditional PABX to a Voice-Over-IP (VoIP) solution should not focus on reduced call costs (although this is typically a benefit) but instead on the fact that the clients staff can make and receive telephone calls from anywhere as though they were at their desk. The clients workforce may benefit from online presence, seeing when their colleagues are available to talk and when they are busy. In short, VoIP is not just a cheaper alternative to a plain old telephone system (POTS) – it’s a huge upgrade.

The Danger in focusing on reduced costs

All of this is not to say that MSP’s shouldn’t highlight the fact that moving to the Cloud can save their clients money, but rather than the client will be receiving a superior service with lower ongoing costs that should free up IT budget to spent on creating even more value.

  • The reduced cost of moving a client to a Cloud hosted email system should free up IT budget to finally invest in developing that electronic document management system that will save the business even more money in the long-term.
  • The cost savings of moving from a POTS to a VOIP system should provide the client’s business with money to improve their customer service portal – helping increase customer service satisfaction.

All of these cost-savings mean that the client has freed up budget to engage the IT Solution Provider to work on other projects that will provide even more value to the business.

The danger to any MSP of selling the Cloud based on cost-reductions alone is that you will attract customers who don’t see IT as a value-add, as a competitive advantage to the growth of their business. You will attract customers who see IT as a cost – and one which is to be continually reduced.

For most MSP’s, these aren’t the type of clients you want to work with.

Conclusion

While moving to the Cloud can almost always reduce costs for clients, it’s a mistake for MSP’s to lead their conversations with clients based on cost savings alone.

If MSP’s focus on the increased flexibility and additional benefits that come from moving to the Cloud – the real value of these services – then selling Cloud services becomes a way of enabling MSP’s to begin conversations with their clients about how they can use the cost savings to begin projects that will add real value in other areas of the clients business.
 

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richard tubb photoAs the former owner of an award winning IT Managed Service Provider, Richard Tubb works with MSPs to help them increase sales, take on employees and build up relationships with key industry contacts. You don't have to do it alone any more - contact Richard and have a chat about your needs and how he can help you.

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