Build, Resell, or White Label? How should ISPs enter the Cloud Market?

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With the recent boom in technology and software surrounding offsite hosting through cloud services, businesses have been clambering to scoop up as much of the revenue pie as possible. As an internet service provider, where is your entry point into the cloud market? Consider three major access points for cloud businesses and retailers: Build, Resale, and White Label.

Build

Why peddle someone else’s product when you can design and control your own? Because building your own cloud products is really hard. Most internet service providers simply don’t have the infrastructure, finances, or expertise to undertake such an expedition, and is it really worth it? Building is a huge money sink many might be fooled into falling for, but the bottom line is there are much better options which can be implemented much easier.

Resell

On the other side of the spectrum is resale, a wholly hands off approach to the cloud revenue stream. As an ISP, you take an existing product, such as Google’s GSuite or Microsoft’s Office 365 and bundle it up for your customers. There’s no worry of overhead or risk of construction, everything is already built for you, all you have to do is roll it up and tie the bow. With the preexisting demand and brand recognition for these products, resale is a very safe and conservative foot in the door to the cloud market.

But perhaps conservative is an understatement. You aren’t building your own brand selling Microsoft’s Office, and there’s very little retention incentive for customers under your umbrella. Any business under your bundle can just as easily jump ship and receive the same exact service under any one of your competitors. In fact, as a study by Analysys Mason shows, in such a situation the bundle is the only thing keeping your customers coming back to you, so why even bother with the cloud market at all?

Many ISPs offer a resale service identical to the one you will be implementing, when switching costs are minimal, it takes only the smallest of perturbations to shake loose your customer base. According to iBis World, as the market continues to grow, the multitude of access points threatens to shake off lower level players. And that’s if you can break into the market at all, vendors often bypass the resale channel all together, selling instead directly to customers (Canalys).

Not only are you building someone else’s brand, you have no control over that brand. Everything you sell will be beholden to their packaging and their pricing. Say goodbye to margins, reselling software is safe because you don’t have to put in anything to pay out, but you wont be hitting any jackpots.

As a reseller, you don’t get a self-hosting option. You are obligated to host their application on their site, which disrupts the experience of your users and breaks any magic of a singular system. Resale is great for ISPs who don’t want to bother dealing with the cloud marketplace, but still would like a few crumbs every once in a while. This may be the best option for your business, but for most there is a better field in the middle ground.

 

White Label

White label is the bridge between the safe conservative space of retail, and the risky pits of development. As a white label provider, you get a cloud enabler’s products and sell them under your own brand, pricing, packaging and benefits. There’s no risk of project failure, like in building, and no corporate chains of resale.

You are not promoting someone else’s brand, you are selling your own brand. Customers come to you for your services, and through white label you provide them a complete package in one experience. You are no longer selling a bundle, you are selling a service, and as a recent EuroStat study shows, your high end cloud service is far more valuable.

Because you are in complete control of the sales, you control the margins. It isn’t an issue of squeezing out a few cents from the big players, you have complete control over packaging and plans. As the market shifts, you have the flexibility to respond appropriately, creating upgrade paths, shifting plans, adjusting branding, etc. Your options aren’t limited to switching between softwares.For many businesses, white label is the best

Software companies such as HyperOffice offer all the tools you need to establish yourself in the cloud market through white label services. You are given access to products in a high demand and rapidly growing product categories – cloud, communication, and collaboration. All branding falls under your control, so transition between your services and those provided by HyperOffice can be made seamless. This seamless user experience helps drive customer retention and associates your business with the entire process.

HyperOffice is an established provider, and has fine tuned the transition process for over a decade. You receive turn key deployment, no waiting years for your system to be built. Not only is turn-over immediate, it is flexible. You can host on your own servers or through the HyperOffice cloud.

Remember, as an ISP you have a unique leverage with your customers when it comes to the cloud market. You are an established provider to them, and with white label you can create simple entry level packages to entice, and broad, rich upsell packages for those looking for a little more.

Don’t get disoriented in all the bustle of the cloud market. There are providers out there willing to work with you to provide your customer base a unique solution, built for their needs from your brand.

 

 

Sources

http://www.analysysmason.com/Research/Content/Comments/operator-ICT-adoption-REN02/#09%20April%202018

https://www.ibisworld.com/industry-trends/market-research-reports/information/data-processing-services/internet-service-providers.html

http://ec.europa.eu/eurostat/web/lucas/data/primary-data/2018

https://www.canalys.com/

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