Strategy & Best Practices

The Race to The Cloud – Crafting Your Cloud Service Catalog

By Dan Saks / November 17, 2011

AppDirect recently attended the TMForum Management World Americas, participating in the aptly named The Race to Cloud Services Summit there. The Summit explored how service providers are exploiting the power of Cloud – what steps to take, and what to avoid, when becoming a successful Cloud Service Provider (CSP).

Leadership from AppDirect teamed with Pamela Isom from IBM Global Services to share our experiences with carriers launching cloud solutions. The session provoked fascinating in-depth discussion from audience members including representatives from Deutsche Telekom, Vodaphone, NTT DoCoMo, Ericsson, NEA and others. Here, get the highlights from our break-out discussion, and find out about creating the ideal cloud service catalog to be offered in your business marketplace.

Know Your Objectives

There are a variety of reasons to offer cloud services to your business customers. You need to clarify what your primary objective are for entering the cloud market so you can develop a successful strategy. These may include:

• Objective A: Driving Average Revenue per User (ARPU) by offering Value Added Services.
• Objective B: Reducing churn from business internet subscriber base and driving loyalty.
• Objective C: Driving online engagement by offering businesses a wealth of information, content and services to help their businesses succeed.

Know Your Target Market

To succeed at taking a cloud service to market, your offering must be relevant to your existing customer base. Effective customer segmentation is critical in order to determine what cloud services to offer.

• Number of Employees: Applications are only relevant to specific market segments. An organization with two sales representatives has very different needs than a company with 10 sales reps and therefore will require a different solution. It’s essential to know your segments and build a portfolio of apps and services that are relevant to your customers.
• Industry: Businesses do not want generic solutions; they want applications that help them manage their specific challenges. One-solution does not fit all and the more industry specific applications and bundles you provide, the better your adoption rate will be. Determining your largest target market will help you create customized solutions to assist them.
• Language / Currency: Considerations must be made if you are operating globally. Many SaaS solutions are not currently ready for international markets and you may have to attract developers in local markets in order to localize your service.
• Technical Proficiency: The adoption of SaaS is much more predominant today in the tech and creative fields. To keep your cost of sales low, you may want to initially target industries that are currently searching for web-based alternatives.

Know Where You Can Play

Each CSP has a unique history, a different set of service offerings and different customers. It’s critical to create a service offering around applications where you have the “right to play.” In some regions, service providers are trusted advisors to small business owners and have close customer relationships. In other regions, customers only engage with a provider to subscribe, troubleshoot, or cancel internet and phone service. When building your cloud service offering, customers need to see you as a rational provider of services:

• Example A: A fixed line provider offering bundled internet, phone, and Value Added Services (VAS) may offer a focused portfolio including Hosted Email, Backup, Security and Conferencing applications.
• Example B: A CSP that owns data centers or sells to enterprise clients may offer Infrastructure as a Service (IaaS) and applications that help Enterprise IT departments.
• Example C: A mass-market CSP that’s a trusted provider of business services may provide all types of apps across various categories, functions and verticals.

Know the Service Quality

Service providers can add value by offering a set of curated applications that have been pre-vetted for security and uptime. CSPs may decide to offer a bundle of “certified applications” that have guaranteed Service Legal Agreements (SLAs) and higher support standards. Other providers may adopt an open model allowing third-party developers to list a broad selection of applications. When adopting an open model, it is essential to establish transparent criteria to allow users to make an educated decision by providing a set of search options such as certified (y/n), support type, free or paying, integration level, etc.

Know Your Service Offerings

Based on your cloud vision, target market and right to play you can now successfully select the services that you’d like to offer.

• Category: Select the high-level categories that are relevant to your market such as Collaboration, Marketing, Infrastructure, etc.
• Function: Decide if you want to offer one application for each category or if you want to provide multiple apps for different specific functions. For example, marketing can include email marketing, social media analytics, video optimization, marketing automation and more.
• Vertical: Provide industry specific applications such as inventory management for retailers or reservation systems for hotels to drive additional adoption.

While all the attendees at The Race to Cloud Services Summit agreed that creating an ideal cloud services catalog is top of mind for most service providers, deciding to enter the space is only the first step.You must continue to create a compelling reason for businesses to buy these services from you. Consider adding value to your offering by providing a portal interface with single-sign-on, user management, and unified billing. Discounted bundles, premium support, and service SLAs are all additional ways to drive value. Determining this value-add should be driven by your objectives and your long-term vision for how the cloud can transform your business in the future.