In Part 2, we focused on effective business planning practices for successfully migrating a solution provider’s business to the cloud. KloudReadiness research also indicated that 72% of the Sales Models are inadequate. Two guidelines that KloudReadiness offered to organizations:

  1. Leave the core sales force alone and keep them focused on selling your traditional products and services – distraction and dissention are the enemy.
  2. Move some over or hire sales professionals who are excited, motivated and compensated to wake-up every day and drive MRR. Set their targets to mostly new acquisitions and legacy customers the company has identified as likely to adopt a hybrid cloud strategy.

Control the legacy revenue shift; don’t force it within your customer base. Ways to do this include:

  1. A set of “house accounts” that are tracked at executive level to ensure the proper migration strategy at the proper time – both for the client and for the solution provider’s business. The goal is to manage the shift naturally and within your model.
  2. Another critical element is to ensure one very strong funnel management process and system that both sales teams use. This allows for “deal registration” of accounts and a holistic understanding of what is happening by sales rep, by account, and by geography.
  3. Have an incentive program in place for the whole company that offers a fixed incentive reward for any new cloud opportunity a person brings in that turns to revenue.
  4. Build a culture of open and regular communication, fairness, transparency, and one that rewards results. Cloud transformation is one of the biggest change management areas happening inside of solution providers today; and it must be done with the same great care taken for any big change management initiative.

Only about 3% of the 250 partners surveyed by KloudReadiness had automated MRR Sales Compensation Systems. Most organizations track cloud & MRR sales within a labyrinth of  spreadsheets and then ultimately deal with the multitude of inaccuracies that occur based on the manual nature of spreadsheets and human’s. Many solution providers are not receptive to adding another system or platform to automate this process that is different from the traditional funnel tracking system. However, this is a very important system that should be in place for long term success.

Approximately 21% of the partners surveyed had an automated MRR Revenue Recognition and Tracking System. Most legacy financial systems over three years old are incapable of tracking monthly recurring revenue in an automated fashion, especially as solution providers increase the monthly recurring revenue over time. Building both a system and a proper scorecard for tracking this monthly is another critical element essential to the overall health of the solution provider.

KloudReadiness found that only 18% of the solution providers had deployed a Cloud Monitoring, Management and Orchestration system. Most businesses do not automate the legacy world and now are faced with platforms that either don’t have the capability to provision or manage cloud services (SaaS, PaaS, IaaS) or their platform providers are slow in bolting on cloud functionality.  Businesses must seek out, and acquire new tools and platforms capable of performing the core functions of procuring (vendor or distributor are key here), managing, monitoring and orchestrating primarily hybrid environments.

Transforming your business to the cloud has evolved from an art to a science. Proper and rigorous planning, leveraging a software automation platform like KloudReadiness, and combining that with effective on-going tracking and monitoring of the company’s monthly recurring revenue business lowers risk, while ensuring the organization profitably grows it’s cloud-based recurring revenue business.