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S is for Syndication….

August 27, 2010
There’s an emerging trend in the landscape of cloud services that is important to discuss: syndication.
Simply put, a syndicated cloud service means that you offer and bill your customers for this service but a third party manages the actual infrastructure behind the service.

This is an important strategic approach to offering cloud services because it enables you to offer a broader portfolio of services without the administrative burden of managing each individual application infrastructure. The downside would be that your margins will likely not be as high compared to services you fully manage, but then again, your Opex costs will be lower as well. But what does syndicating a cloud service really involve?

First, it must be included in your product catalog, available in your shopping cart or marketplace, and can be bundled with other services.

Second, your automation and provision system must be connected to this service, so you can rapdly provision or update accounts, plans, and users.

Third, it must be integrated into your billing system so you are in control of the price and margin of the service.

Fourth, it should be accessible through your end-user control panel so customers can self-service without putting a call into your support center.

Fifth and finally, if you have a reseller channel, a syndicated cloud service should be readily available for your resellers to offer.

It is true that many third party cloud services may be competing with you, directly or indirectly, and therefore represents a disintermediating threat between you and your customers. However, by syndicating the service you mitigate this threat and retain as much control over your customer as possible. I have illustrated this value chain below"

The Importance of Syndicating Cloud Services…
Some more reading on this topic from: http://blogs.parallels.com/serviceprovider


What is BPOS Syndication?

  • Requires Commitment to over 100,000 seats in first three years.
  • Established brand with commitment to SMB Market
  • Only a dozen or so providers will be added
  • Key: Partner owns both support and billing relationship with Microsoft providing escalation support

Why Syndication over Partner Hosted/ BPOS Advisory?

BPOS Syndication-  Partner does not want to invest in infrastructure; Partner is more focused on services than products; Partner wants to offer broadest range of services

In comparison to….

Partner Hosted Use Cases- Customer requires in country service for regulatory or business reasons; not big enough for syndication but wanting to own customer relationship; offer differentiated offerings that will not bundle well with BPOS.

BPOS Advisory Use Cases- Customer wants services that provider does not have core competencies in;  Partner wants to quickly turn on some extra services to existing base

Summary:  A single vendor may actually have more than one approach depending on their situation (Hosted and Advisory for example).  The key is to do an internal evaluation of the core value proposition and to decide whether outsourcing things that are not core will work.

Parallels Automation for Microsoft BPOS Syndication delivery….
WPC 2010 – Make Money with Parallels, BPOS and other Cloud…
How Communication Service Providers can Profit from the Cloud……
Why are Cloud services important to CSPs?
Should I create my Cloud Service through implementing commercial off the shelf automation software; resell/white label other offerings or build my own Cloud Services from the ground up?

How can a CSP rapidly get to market offering Cloud services?

Enabling a Cloud Services Provider

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