Shorten (and lengthen) sales cycle for cloud success: Ingram

Renee Bergeron, vice president of worldwide cloud computing at Ingram Micro

Renee Bergeron, vice president of worldwide cloud computing at Ingram Micro

PHOENIX – For solution providers to be truly successful in the cloud, they’ve got to shorten their sales cycles. And to stay successful in the cloud, they’ve got to lengthen their sales cycle. That’s the world from Ingram Micro global cloud boss Renée Bergeron, kicking off the company’s fifth annual Cloud Summit here Monday morning.

Bergeron told partners they have to be ready for “hyperscale selling” to succeed in the cloud – to decide very quickly on the services they want to offer, and be able to deliver them as quickly as possible. It makes sense because cloud is, at its core, a volume game in many ways – selling a lot of clients on the same cloud services and keeping those clients for a long time is the path to make the most money. Bergeron’s solution for hyperscale selling of cloud services: partner closely with the distributor.

“We offer the ability to shorten the sales cycle, and acquire customers in a cost-effective manner without adding sales associates. We help empower your existing sales teams to new levels of productivity,” Bergeron told attendees. “That is our goal, that is our cloud value proposition.”

The distributor, she said, now has 650 people worldwide working on its cloud team, and can help solution providers smooth the process of finding cloud apps, negotiating the details of deals with the cloud vendors, bundling cloud applications into solutions, and deploying those solutions for customers. The company further expanded some of those types of services, adding new programs and services to its cloud linecard at the event.

Selling at hyperscale, Bergeron said, also means focusing on the SMB market, a field that will reach $1 trillion (U.S.) in IT spend next year, and which is moving faster towards the cloud than the enterprise segment because of the lack of legacy technology investments.

“While most partners are looking to go upmarket, they need to serve this new base of customers, but to do so, you need to automate as much as possible,” Bergeron said.

Again, that’s an area where the distributor is making investments, particularly with its Cloud Marketplace online shop and management console for purchased-through-Ingram cloud services. By using this automated way to deploy cloud services, solution providers will trim their time spent deploying for customers and can get on with finding the next group of customers for their offerings.

But at the same time, Bergeron counseled partners to lengthen their sales cycle in one way – urging solution providers to take more care to provide lifecycle support and ensure cloud-based applications are being used to their utmost by their customers. After all, the costs to a partner to deploy a cloud application for a customer are pretty much the same whether the customer deploys and ignores it, or really maximizes what it gets from its new technology. But how much the solution provider is paid varies greatly between those two scenarios.

“In the cloud it’s all about usage,” she said. “You may design a great solution, you may implement it, but if they’re not using it, then you’re not making money.”

The goal, she said, becomes to think even more than ever before about customers as customers for life.

“You need to nurture the customer and provide the customer service necessary to make them a happy customer for years to come,” Bergeron said.

Bergeron also shared a wealth of statistics, including numbers showing that 70 per cent of CIO’s will have a “cloud-first” strategy for their companies by next year, and perhaps the most eye-opening for solution provider owners in the room: valuations for companies running an annuity or recurring revenue model are valued at between four and eight times their annual revenues, a significant increase over their peers based on one-time revenues (ie: project-based or break-fix solution providers.)

But she cautioned solution providers that it’s not an all-or-nothing equation. In fact, she said, as soon as solution providers reach between 30 to 40 per cent annuity business, they see valuation credit as if they are an annuity business.

Bergeron also noted a surprising change in how solution providers are purchasing cloud services from the distributor. While Ingram initially structured its cloud offerings assuming solution providers would continue to buy off their Ingram Micro line of credit, as most do for most of their business with the distributor, a growing number of solution providers, even a majority of them, in the cloud space opt to purchase the cloud services they resell to their customers on their credit card.

So why do solution providers use this “Shadow IT”-style method of payment? In part because of the aforementioned mix of cloud and non-cloud that makes up their business mix. Because cloud invoices are paid by the customer on a monthly basis, credit card terms work well as a “55-day free line of credit” to cover those purchases, Bergeron said, allowing solution providers to keep their higher limit and longer terms for their project-based business, where the dollar values of deals tend to be higher, and time to payment tends to be longer.