The economy is changing from long-term ownership to subscriptions. Customers no longer care about owning a product, they care about achieving outcome.
As a Microsoft CSP Partner you will need to adjust accordingly. We see that most CSP Partners still sell cloud products without adding value, hence can only differentiate by competing on price. This will end up in a price war, which you can keep up for only so long. Some large CSP’s even sell Office365 licenses against no margins.
Instead, you better seize the opportunities deriving from the Subscription Economy. If you are willing to adapt, you can increase your revenues substantially.
The Subscription Economy is here to stay
In an article published in the last quarter of 2016, the leading magazine Forbes already predicted that the traditional pay-per product model would shift to a subscription-based model. This is exactly what happened over the course of 2017: customers started using services or products only for as long as they need it. Temporary use is preferred over permanent ownership more and more. Subscription models pop up in all industries: e.g.(private) car leasing, entertainment (Netflix, HBO) and for some time also in the software industry: Anything as a Service (XaaS) is in hypergrowth.
Consumerization of IT
This is especially the case with software: they do not care about a word processor, they want to be able to make up documents, everywhere they go, in an intuitive way and on all their devices with direct access to all their documents (and preferably to those of colleagues as well) How it works is none of their concern. It just needs to function and be available whenever they want, where ever they want. It should be as easy as downloading an app on your smartphone.
For you as a Microsoft CSP partner it will no longer do to just sell Microsoft Office 365. Sure you can help install and configure it as well, but do you know what the customer needs for his business? Customers expect you to think from their perspective, how can I best utilize my Office?
In most cases, you will no longer be talking with the IT but with business users. This requires you to make a bigger effort to put yourself in their shoes. Your business customer doesn’t think about how to be safe, access their files everywhere and collaborate with their teams. He expects you to do this for him.
Opportunities of the Subscription Economy
The Subscription Economy requires you to build on a strong and long term relationship with your customer. Customer satisfaction is key. As a CSP partner you need to focus on monetizing long-term relationships rather than shipping products.
As you interact with the business regarding the outcome, you will have more contact moments, allowing you to gather information about the client’s needs. Dive into their processes and way of working. Advise them on solutions and outcome. Your customer will be happier with you for solving his issues, and your revenue per customer will increase. Instead of earning 10 euro a month per user, you can earn up to 60 to 70 euro.
If you think this is too much hassle and you rather keep selling plain products without adding value, you have to realize that you risk ending up in a price war. Products can be compared, outcome is always specific. In the long run customers will never switch to competitors when you offer and exceed the expected outcome.
How to do this?
The composition of a suitable service package with the right outcome for your customers might be a challenge. What are your customers looking for? And what do they need without even knowing it? Think of data security solutions following the GDPR legislation, back-ups, virus protection etc. You don’t need to offer all products and services in-house. You might outsource some to other partners. If you offer the whole package, your customer doesn’t care where it comes from.
To simplify your ordering and delivery process you need to have a platform that automates these services. When your customer orders an extra workplace, it will be just one click for him. In the background all products and services related to the workplace will be gathered and put together. The ordering, billing, processing and delivery will be done automatically. This allows you to spend more time on your customer and work with them to find the right solutions for their company. This ensures a long-term relationship and increased revenues per customer.
Webinar “How to accelerate with the Office 365+ program?”
As we want to help you accelerating your cloud business we will be hosting a webinar on 13 February from 11:00 – 11:30 pm CET. The topic of the webinar is how you can grow your Office 365 revenue by creating your own digital workplace proposition.
Learn quick tips and tricks, and how you could leverage your portfolio that offers value to your customers.
If you want to join, feel free to register. Even if you cannot attend the webinar live, please register so we can send you the recording and slides afterwards.
This 365+ program is part of our Partner Acceleration Plan, in which we help our partners to drive their business growth. You can read more about this program on our website. If you would like to discuss opportunities to accelerate your business or [see a demo](https://keenondots.com/request-a-demo/), please contact us.
Author: Sybren Visser, Partner Success Manager @Keenondots