Hosting Deals: Have Your Cake and Eat It, Too
Ryan Barbera, CEO, Data Canopy
As I have been traveling between the different markets Data Canopy is in around the country, one thing has become increasingly clear to me: Agents are very focused on telecom and UCaaS. As an alumnus of XO and before that Allegiance, I totally understand the reason behind this. Plainly, it’s easy. Easy for most clients to understand and easier than most technologies to sell – every business must communicate with others! The problem with this is that it leaves half the story untold for the client. The more our team engages with agents and their clients, the more I realize that the value of what we’re doing for the agents is not clear.
Business Today is Hosted
This brief overview is to help you understand why hybrid infrastructure, data center, and multi-cloud solutions are an enhancement (a really big one) to your current offerings and worth taking the time to learn the ropes. Let’s start at the beginning. Circuits and phones are only half of the discussion. While these two pieces are needed by every organization, they speak to one part of a larger discussion. The real question is why do firms need them? The answer: to do business. Not just to communicate, but to access applications, execute on critical processes, and more. Where does that business live? In the data center or cloud. That’s where you get to have your cake and eat it, too.
Longer Client Retention
While most circuit deals are for a total term of 3 years, most colocation or cloud deals will go for a term of 5-10 years. Why is this? Two reasons: First, unlike static services, such as connectivity, companies grow their data everyday requiring more services to be subscribed to. This means a growing contract. Secondly, companies never (and I mean never) want to make a change to their core infrastructure so they will do everything they can to make a great partner a partner for life. Also remember, they still need to get to their stuff, so an SD-Wan, telephony, and connectivity solution is still needed.
Higher MRR Value
One final note, in our discussions with our agents and partners we learned our services bill for anywhere between two to five times what they would be billing for telecom or UCaaS solutions for similar sized companies. Contributing to disparity, the cost of circuits has dropped significantly over the past decade, while the cost of cloud and colocation has remained the same for more than five years and in many cases has actually gone up. Considering the commission is the same or higher, I would say that is a real cake and eat it, too scenario. Make more money, keep your clients longer, and become a more valuable partner. The downside? How are you going to spend all that cash?!