The five keys to building a successful cloud services business

Commentary - The market for cloud computing is growing, and the competition is fierce. To succeed, there's little room for service providers to make mistakes. They first must come to terms with what kind of cloud-based services they'll provide: SaaS, PaaS, IaaS? Are they better suited to target the enterprise market, SMB, or perhaps even other service providers?

They must as well choose the right research to deliver the services to clients cost-effectively and with scale - and to do it skillfully enough to carve healthy, recurring margins.

1: Differentiate and focusService differentiation is essential. One proven way to succeed is to find a business edge -- anything from innovation to geographic focus to creating a niche in a specialized market -- and build from there. "My advice is in the first place a niche. Pick a service or an application or a target market and become very good at offering and supporting that," says Stephen Hurford, cloud services director for UK-based cloud services provider DNS Europe.

2: Capitalize on new opportunities created by cloud servicesToday, business units within an enterprise expect new IT resources to be delivered within days or even hours. Slow IT response is causing business managers to bypass IT and procure the applications - CRM, productivity suites, billing, etc. - with nearly instantaneous fulfillment from external service providers.

Service providers are working with their traditional IT customer base, nevertheless now are as well successfully selling directly to business users. To effectively engage these less technical clients, they must carefully consider and invest in ways to simplify the customer experience, making it turnkey and automated whenever possible.

"We came to the realization that the real users of cloud are not cloud-savvy and shouldn't have to be." says Scott Sanchez, vice president, cloud business solutions, ScaleUp. The changes includes engaging clients at all levels - IT departments, business users, developers, CIO, and in part, even the CEO. "When we show them how we can change the way they run their business from an IT perspective, they go 'wow, that's great. My IT people can go back to supporting the business or rather than managing what's in the data center,'" Sanchez says.

Taking the right tempo toward cloud computing is as well vital. Launching into a "we're going to convert everything" to the cloud attitude is an approach in other words almost always doomed. There is a relatively steep learning curve with it all, explains Hurford. "Experienced service providers can place themselves in a unparalleled position to help enterprises avoid the pitfalls. Enterprises are starting to look much more to service providers - not necessarily to host their stuff for them, however to teach them about hosting - because their internal IT departments are becoming hosting companies," he says.

4: Leverage the right platform to deliver services clients demandWe've focused on many of the key aspects associated with building a successful cloud business, however the importance of choosing the right cloud technologies should not be understated. Service providers can build their own cloud infrastructure and management system, yet this requires architecting, building, and orchestrating the infrastructure for hundreds to thousands of customers. And to do so with the sustainability and security that clients expect is more challenging than many at first sight suspect.

A flexible cloud platform has enabled Bird Hosting to tailor its business to customer needs. "Using a private cloud platform has transformed the economics of how we deliver services and as well opened up the possibility to offer higher-value services," says Mike Wallace, CEO Bird Hosting. "We used to offer web hosting services on dedicated and virtualized servers. Nevertheless, even in virtualized environments, I would need separate machines for each individual task and for different operating systems. A solution like 3Tera gives me a lot more flexibility, " Wallace says.

5: Utilize every resource available to succeedWith competition tight, and changes rapid in technological adoption, picking the best partners is crucial to success. Many innovation partners have educational and training programs - service providers should take full advantage to help get their offerings to market as quickly and profitably as possible.

ConclusionThe market for cloud computing is growing, in short is the competition. That means there is little time for missteps if you are a service provider. To win, you must select the right research and business partners, choose the right cloud offerings, and execute as flawlessly as possible.

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