Three reasons and three ways to differentiate your cloud business

It’s a jungle out there—competition in the cloud is growing by the day. Is your business ready to keep up?

In Cloud Profitability workshops, we often ask partners to write down their business’s unique value proposition on a sheet of paper and share it with the participants from other companies. As the sheets of paper get circulated, I often see looks of surprise and concern on faces as participants realize their “unique” value proposition was not as unique as they thought!

Have you taken the time to assess your differentiation strategy with your leadership team? If not, I’d encourage you to schedule time to do just this.

Why you should differentiate your cloud business

Let’s explore three key reasons for creating a differentiation strategy:

1. Win more business

New players enter the cloud market every day. As competition increases, it becomes more challenging to win new business

2. Increase profitability

Partners with differentiated go-to-market strategies are more effective at protecting their price points and margins and ultimately increasing their profitability.

3. Better serve your customers

As you build out a differentiated strategy, you will better understand your customers’ needs and how to serve them.

Are you sold? If so, here’s how to get started:

How to create highly competitive business models

In an effort to help partners understand how to differentiate their business, we commissioned IDC research to determine how top-performing partners around the world are building differentiated business models. What are the go-to-market approaches that stand out, win more business, and protect margins?

I’m excited to announce the launch of Part 2 of the Modern Microsoft Partner Series: Differentiate to Stand Out, the second eBook in a five-part series announced by Phil Sorgen last month that will launch as we lead up to the 2016 Microsoft Worldwide Partner Conference. The eBooks focus on the cloud opportunity and explain how partners can adopt the four pillars of the Modern Partner to build a sustainable, profitable cloud business.

In the first eBook, The Booming Cloud Opportunity, we explored the cloud opportunity, drilled into customer trends, and provided insight into the innovation accelerators supported by the cloud. In the newest eBook, Differentiate to Stand Out, you will get a host of best practices focused on effective differentiation, including these three:

1. Estability a vertical or industry focus

About 82 percent of cloud oriented partners (those who earn 50 percent or more from cloud revenue) state that having a vertical industry focus is important or very important to their growth strategy.

gross profit

IDC eBook, sponsored by Microsoft, Part 2: Differentiate to Stand Out, April 2016

2. Productize intellectual property

The study showed that packaged IP yields higher gross profit margins than resales, professional services AND managed services, with an average gross profit margin of 70 percent.

IDC eBook, sponsored by Microsoft, Part 2: Differentiate to Stand Out, April 2016

3. Create powerful partnerships

According to the study, 46 percent of solution providers collaborate with other channel partners to target a vertical and enhance their total solution. Plus, the research with IDC has shown that the group of partners who associated 30 percent or more of their revenue with partner-to-partner collaboration were also the ones who were growing the fastest—they saw an average of 19 percent growth while others see averages of 10-12 percent. (Source: IDC #243921, Partner-to-Partner Collaboration: The Current Landscape, 2013, n = 389)

To learn more about these best practices and others, download the eBook today. And if you have questions or feedback, please feel free to reach out any time via email, Twitter, or LinkedIn.