Advanced Cloud Resale: Reseller Value

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Working with and talking to a variety of cloud resellers we find a surprising range of perspectives they take when reflecting on their resale business. For some it is a welcome additional revenue stream. For others its associated obligations represent a necessary evil in protecting their value-add technical services as it prevents their customers involving additional partners for resale that might ultimately become a competitive threat. Some find the margin dilution and resale obligations compared to their other services a real inconvenience and an organisational risk they’d prefer not to carry.

Whatever the perspective there are basically two options: seek ways to derive further value from being in the resale chain or offload the resale overhead and risk to an organisation that will not provide a competitive threat.

Being able to derive more value from resale than standard cloud vendor resale programs provides greater margins and reduces the risk that meeting resale obligations becomes loss-making should cloud vendors adjust their resale terms. The way we do this is by making purchasing decisions based on the consideration of our aggregated customer portfolio. This allows individual customers to access volume discounts and economies of scale that operating alone they simply would not be able to. We also use this to take a different approach to accessing cloud vendor discounts provided in exchange for commitments to certain levels of resource usage over 1 or 3-year terms. Operating alone customers often take a more risk-averse approach to such commitments whereas we can use the diverse usage of our wider portfolio to offset some of these risks for them or for us to take them on their behalf. Together this makes it possible to access better pricing for our customers and we share that benefit with them to lower their cloud costs and increase our resale margins.

The greater the size and diversity of the portfolio the greater the benefits. One way we grow this portfolio is through growing our customer base directly which we do by providing value add services in a suite of Financial Operations, “FinOps” services. The added value we derive from cloud resale enables us to offer many of these services free of charge. Another way we do it is by working with partners to leverage their customer portfolio. This enables our partners to offer a suite of financial services alongside their technical as an additional tool for competitive differentiation.

Our FinOps service suite focuses on three key areas. Firstly we remove the procurement barriers to cloud (”Financial Adaptor”), secondly, we provide clear insight into cloud spend trends and anomalies (“Clarity & Transparency”) and thirdly we use a range of techniques to ensure cloud spend remains optimal (“Managed FinOps”). Although our Financial Solutions Architects have engineering backgrounds that they use to ensure our recommendations are practical and to help bridge the gap between technical and financial teams, our focus is entirely on the financial. As we do not get involved in any form of technical delivery we actively embrace working with customer or partner technical teams, understand the necessity of collaboration and appreciate the value of each party bringing its own expertise to bear. Given our very different fields of expertise, we find this removes potential conflicts of interests which helps us maintain healthy working relationships with our partners. These relationships can be to work side by side with partner and customer or with Strategic Blue services white-labelled behind the partner.

We would welcome the opportunity to discuss partnerships with you. We could, for example, explain more about how we operate with partners to generate and share the added value of advanced cloud resale and FinOps services. Or we could introduce our Savings Review Consultancy specifically designed to explore the risks and assets associated with the delivery of cloud resale. In the meantime you may find it useful to visit our Partner pages to explore our different types of partners or read this blog on how we help provide additional points of competitive differentiation to our partners.

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Strategic Blue helps organisations buy cloud on terms to suit their needs, helping them accelerate innovation in the cloud and optimise long-term cloud costs.

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