Cloud storage and storage-related services, such as backup and DR, should be a wake-up call for VARs and MSPs to stop selling technology and learn how to sell business benefits. The cloud is a delivery mechanism that takes the infrastructure out of IT solutions. Without hardware and software to put on-site, customers have less need for the traditional value proposition VARs have been selling.
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We’ve all been in training sessions where the instructors emphasize selling benefits instead of features, solutions instead of products. This has always been sound advice, since the biggest budgets are controlled from the executive offices, not the data center. And CIOs are interested in saving time and money, reducing risk, and gaining competitive advantage -- not speeds and feeds. Companies view business units and their information needs as more critical than general IT, especially when they’re tied to revenue generation.
With all this emphasis on business value, IT products, for the most part, are still being sold as a collection of technologies. Most VARs are techies who are comfortable talking about products and diving into the details of integration. They still base their value proposition on their ability to architect, implement and support what has historically been a complex infrastructure -- at least one that’s more complex than the user wants (or is able) to deal with. It doesn’t help that many of the people they interface with at client accounts are also more comfortable talking about technical details of products instead of the more abstract area of business value.
But the cloud and related IT initiatives are changing that and turning complex infrastructure into a utility-like service, one that the user doesn’t need as much help to set up, run or expand. In this environment, VARs’ projects will have less of a requirement for back-end implementation but will still need a strong business analysis phase on the front end. To remain competitive in the enterprise cloud backup services space, VARs will finally need to get good at selling the business-oriented solution and not the technology-oriented product.
VARs need to make sure they ask the right questions and get the right answers. This requires that they understand what it is they’re really providing. They’re not selling a backup system, they’re selling access and uptime for IT services. Again, this isn’t a new concept with cloud backup, it’s just a focus on the business end of things. With that in mind, let’s talk about the business value provided by cloud backup.
- Risk mitigation. All backup provides protection against risk, the risk of losing access to critical business services (such as email or Web servers). It also protects against losing access to data in an acceptable time frame. Data doesn’t have to be actually lost for an event to be detrimental to the business. It just has to be unavailable for long enough -- like the time it takes to rebuild a server, restore a backup and restart the application running on it.
- Cost reduction. Cloud-based backup services allow users to trade higher upfront capital expenditures (CapEx) for lower monthly payments, as they don’t have to buy hardware, software or data center floor space. Also, operational expenses (OpEx) shrink with the size of the on-site data center. They also can trade the complexity of implementation and expansion for the simplicity of a utility services model and the efficiency of paying only for what they use. This is a big issue for many organizations. Each new storage system that comes in the door has more capacity than they need, and often a lot more processing power since most arrays don’t efficiently scale storage processors. From a business perspective, storage isn’t a very good investment since it goes down in price. With cloud-based backup, this waste falls away.
VARs may complain about the loss of professional services revenue that the cloud will bring, but that’s something that’s been eroding for quite some time. Projects that used to routinely get sold with a 25% professional services component are now getting sold with no professional services at all. Every VAR has a story (or 10) about a customer that fought to get professional services reduced or eliminated from a quote and then tried to use the vendor’s tech support to make everything work.
The end game is that the cloud will “utilify” much of the infrastructure that VARs have made a living putting in and supporting. As this occurs, users will have less of a need for technical integration services, but they will still need someone to help them make a decision about which cloud service is the best fit. And this decision will still require sound business analysis and an understanding of the business value that each cloud solution offers.
The message for VARs is to learn how to sell business benefits in order to be effective at selling cloud solutions, which are primarily services and not the hardware and software they’ve become accustomed to selling. The good news is that the benefits approach works well for the traditional, technical IT infrastructure they’re currently selling, since it focuses on the value that’s important to the people who approve the largest projects. Smart VARs will use it to improve their effectiveness with all products today and manage the transition to the cloud tomorrow.
Eric Slack is a senior analyst with Storage Switzerland.