Building Revenue from Google Apps

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As we move further into the 21st century, overheated server rooms are beginning to cool down as Wi-Fi networks heat up. For more and more organizations, cloud technologies are replacing on-premises software and hardware solutions—and leading the pack is Google Apps. This productivity suite is rapidly becoming the poster child of how IT energizes and transforms business.

There is no question that Google Apps represents a sea-change shift in how organizations approach computing and productivity. The question is how to build a profitable and sustainable business around the new cloud-based IT modality.

Not everyone is riding the clouds. Traditional IT VARs still approach cloud services as if they were products. When an IT reseller sells a product—say, a printer—the value lies in immediate functionality, and then it decreases over time. With every product the reseller implements, its revenue annuity increases with a cycle of sell, fix, and replace. As product values wane, the reseller’s value to the customer as well as its revenue increases thanks to updates, repairs, and eventual replacement.

This inherently flawed interpretation of “rinse and repeat” is fueling the adoption of cloud services such as Google Apps. Cloud services such as Google Apps get better over time. Plus it offers end-user organizations a compelling opportunity to reduce costs. But what does it offer the reseller partner? Very little: $10 per user per year.

There is a way to ride the cloud into a sustainable channel partner business. Since the revenues associated with built-in obsolescence disappear in the cloud, the product-oriented business model needs to be thrown out. The modern cloud-partner adheres to a new philosophy. These partners realize the solution to building a healthy, sustainable business lies in making cloud services work together. The opportunity lies not directly within the cloud applications, but rather between them.

Paper sponsored by gUnify, 2013.

Dave Michels