Five Critical Success Factors for Cloud Service Delivery

With the worldwide market for cloud services projected to surpass $125 billion annually by 2016, it’s no wonder that everyone wants to get into the cloud. However, successfully making the transition into delivering cloud services is definitely easier said than done. Whether you want to add cloud service offerings to traditional voice and broadband services, or start a SaaS brokerage from scratch, there are some key concepts to be aware of as you consider your approach to monetizing this huge opportunity.

Working with thousands of service providers, Parallels has identified five specific factors which are critical to growing and managing a successful cloud service business. The five factors are:

  1. A flexible delivery platform
  2. The ability to provision unique service offerings
  3. Multi-channel sales enablement
  4. A simplified customer experience
  5. An open standard for cloud services

This blog series will discuss these five critical success factors for cloud service delivery and will identify how they help address the challenges that service providers and SMBs face.

The SMB Challenge

A significant portion of the $125 billion global market for cloud services will be purchased by small and medium businesses. They already use a variety of cloud services including web hosting and email, SEO, web conferencing, file sharing, backup, social media, payroll, HR systems, and CRM. As consumption of cloud services continues to grow year over year, so does complexity for these small businesses, especially those lacking dedicated IT resources. Because the applications they want to use typically don’t come from a single service provider, these businesses have to manage multiple vendor relationships and service contracts, multiple invoices, multiple support contacts, and multiple service management interfaces. By sourcing services from different providers, they must also deal with a confusing array of services from which to choose, and little to no integration between them.

Service providers that can simplify this experience for SMBs and offer more of the services they need in a uniform experience will have the best chance of winning and growing their share of this segment.

The Service Provider Challenge

Many companies that want to provide cloud services are seeking to evolve beyond their traditional business models for fixed-line voice, mobile, broadband, or web hosting services. Often these businesses are built on legacy or home-grown systems that are not able to meet the basic needs of a cloud service delivery platform, or may require extensive and continuous development work to adapt legacy systems to the task.

At a minimum, service providers need to be able to integrate their core services with third-party services, and consolidate billing across all service types. Onboarding new services should not impede time to market. In addition, providers should be able to create customized service bundles easily, and to deliver a unified customer experience. To scale their business, they need to be able to support multiple sales channels.

In our next blog post, we will drill into the five critical success factors, starting with the first: having a flexible delivery platform.


Posted on September 4, 2014 and filed under Cloud Service Delivery.