#THE CLOUD MONEY SOFTWARE#

AWS provides a discount over ten Terabytes. However, this is not what you as the reseller would be billed for the usage. The cost for this bandwidth if each customer was purchasing it directly from AWS at 12 cents per Gigabyte would be $6,144. Let’s say you have five customers, each using ten Terabytes of bandwidth: Let’s use the example of bandwidth to illustrate this point. In order to take advantage of this opportunity, it’s crucial to ensure that you are providing the proper discount to your customer. As a reseller of cloud services, this provides an excellent opportunity to add margin to your business. What this means for most cloud providers is that as you use more, you pay less (volume discounts). Accurately Calculate Volume-based Discounts for CustomersĬloud services are consumption based, which means that you pay for what you use. Overhead means nothing without revenue, however, which is why we rank this one at number 4. The important thing here is that the rest of the ways to make money will mean nothing if the overhead of running your business is unsustainable. Thus, you should automate everything you can to limit overhead. As customers scale up, it will eat into your margins and limit profitability. Without automated systems, you will need to hire people to manage this. AWS will provide you with all the details you need to do so, but with hourly billing and blended rates, you will either have to build a system to integrate with AWS' billing or deal with these things manually. Consider the case of creating a bill for your customer. The convenience is great from the customer perspective but creates a new level of operational overhead that can seriously eat into profits. If your customer is purchasing a server or a cloud provider such as Amazon Web Services (AWS), there’s only one step which is to go to the AWS console and provision a server. The lag gave you time to deal with the operations of your business-prepare an invoice for a customer, acquire software, and bill the customer accordingly. The preceding steps probably took at least a week, sometimes more. Consider the steps one probably had to take before cloud to get a server into their colo or hosting center: How fast, you ask? Consider the difference between ordering a server five years ago and ordering one today.

In addition, we only consider packaged services SaaS is not included here. This is not to say these are the only ways to make money as a channel provider or ISV in cloud, but these are the top four.

In this paper we will lay out in descending order of importance the top four ways that we see companies making money with cloud services. We’ve helped these companies unlock additional margin and grow revenue while minimizing the operational burden of both.

#THE CLOUD MONEY SOFTWARE#

Companies that traditionally had a healthy business from the resale of software and services, and particularly hardware, have been forced to re-evaluate their business models in light of the new realities of cloud.Īt Orbitera, we have helped a wide variety of software and services providers build profitable businesses centered around cloud services. The ease of buying services directly from cloud providers has also led to a compression of the margin available to third-party software and service providers. That means supporting consumption-based, pay-as-you-go billing while reducing friction for customers that want to purchase products and services. Companies that have traditionally provided IT software and services have been forced to adapt their business models to the new reality of cloud. The growth of cloud services over the past several years has been nothing short of spectacular.

The cloud money