Characteristics of an Ideal Cloud or Hosting Provider

Posted by Ben Austin on Dec 17, 2015 9:00:00 AM

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Last week, 451 Research hosted a great webinar packed full of data about the direction of the service provider industry and what cloud and hosting providers need to know in order to stay successful in coming years. Just looking at it from a high level, there were a lot of good tidbits to take away, including:

  • The trend toward historically technology-based companies leaning into the managed services sphere to create an extra stickiness with their audience.
  • There’s a huge opportunity out there to provide high-order services, such as disaster recovery and compliance, as automated services to the less tech savvy end clients.
  • The fact that IT budgets at most small- and medium-sized businesses have been flat in recent years, so they are forced to look externally for more efficient solutions.

All of this was great insight into this ever-evolving industry. It was a refreshing look forward at the expansion and increasing maturity of this space. To sum it up, the message from the analysts and the data was that there is a massive opportunity to grab a lot of real estate and do some really cool things in this space as long as you're willing to build partnerships and pivot just a bit outside of the services that hosting providers have traditionally offered.

But the major point that I took away from this webinar didn't have to do with stats that attempt to predict the future of the industry. It had nothing to do with building a wide range of modular, a la carte infrastructure services. The best nugget of information I took away was about the tried-and-true things that service providers can do to build a sense of trust with your audience. In explaining this, the 451 analysts laid out the top dozen-or-so components that, according to their data, make a cloud or hosting provider perfect in the eyes of their customers.

Courtesy of original data from 451 Research, in coordination with Intel, here are the top six characteristics that users consider when looking for their ideal cloud or hosting provider.

 

Security

There’s a reason this was the top characteristic mentioned, and it should be fairly obvious to anyone in this industry. Businesses are putting their most valuable asset in your hands when they choose you as their hosting provider, and they need to know that their business is as safe as possible.

Even if you have a high price point, are difficult to on-board with, or experience occasional downtime, none of that will deter a prospective customer more than the fear that their data will not be secure in your hands. This will become truer as major websites and publications continue to report on the massive breaches that seemingly occur on a monthly basis these days.

So how do you combat this? Building out website copy or a sales talk track around the encryption or backup features of your offering can go a long way in encouraging prospects to take the next step with you. It may seem a little odd to lead with a value prop based on security (as opposed to sexier feature sets, low costs, etc.) but the data from 451 lays it out plain and simple: Security is king.

 

Price Point

When it comes to small- and medium-sized businesses, nearly every decision ends up coming down to the numbers. That’s especially true when it comes to costs, such as infrastructure, that do not directly generate any profit or show a tangible return on investment.

It may seem like your prices are what they are and that there's nothing that can be done about that. After all, you need to hit your margins and stay in business, right? 

That's true, but it is also worth taking time to do some competitive research. Figure out who you are most commonly losing business to and figure out whether cost is one of the primary reasons. If it is a primary reason, it's probably good to look into one of two things:

  1. Where can you be more efficient? How can you re-arrange your business model so that you can get closer to, or even below, your competition's prices without crushing your own margins?
  2. If there's no way you can compete on price then there's probably good reason. Build out some messaging around the total value that you bring to the table. Highlight any technical value-adds (encryption, high-quality backup, reliability, bandwidth, support, etc.) along with any personal services that you provide that may also be of value to your customers. 

 

Ease of Use

I'll keep this one short and sweet - if it's not easy enough for an intern to figure out, then it's too hard. 

It's up to you to make it as easy as possible for your users to see the value in your products and services as quickly as possible. Small businesses have enough headaches as it is. If you force them to go through complicated hurdles just to get set up with your service, odds are they won't hang around long.

There are a few things you can do to stay ahead on this one. First, make sure your user interface is as simple and intuitive as possible. Your customers aren't going to be happy if they have to jump through multiple portals or logins while they're working with different aspects of your organization. Their experience has to be fluid and cohesive, from their first sign on to the billing process.

If you've got the resources, create a downloadable on-boarding guide or, better yet, an in-product tutorial for new users. Even if they don't always run through the whole thing, at least you've given them the option to make it extremely easy on them.

Providing any kind of automation or managed services along with your technology is also a great opportunity. It's going to make your customers' lives easier, it will help them build a trust and reliance on your organization, and it could also evolve into a new revenue stream for you. 

Finally, consider having multiple options for your customers to reach out to your support team - ideally phone, email, and chat. Almost as important as having multiple options is making sure your new customers are completely aware of those options long before their first problem arises.

 

Resilience and Stability

This is something that is going to be more difficult, but also more important, the smaller you are. Fledgling regional service providers absolutely have the advantage of being relatively local, which gives business owners a sense of comfort compared to a giant, multi-continental service provider. The disadvantage that smaller shops face is the question of stability and resilience, both in the short term and the long term.

If you're a regional looking to snatch some of that market share from your bigger, more established competitors then you've got to be able to show that you're able to keep your lights (and servers) on for the foreseeable future. 

 

Flexibility

Flexibility in pricing and packaging has been an ongoing trend, in this industry and others, for the last half decade. Whether it's a shared hosting or Zip Car, the general public is becoming more accustomed to the pay-as-you-go service model.

This doesn't mean that you need to go to a completely modular or a la carte model, although that wouldn't hurt with this particular point. It does mean, though, that you should have some flexibility in the packaging or bundling of your offerings. Start collecting some user data and get an understanding of who is actually using your service. Once you've got some of that research under your belt, use it to influence your pricing and packaging model. Create packages based on the needs of your different personas. Allow them to customize certain aspects of a bundle. You're going to have a much smoother sales process if the buyer gets the feeling that you're catering to their needs from the very beginning.

 

Performance and Scalability

Rounding out the group are two items that were listed as #6 and #7 according to the 451 data. I was honestly somewhat surprised to see performance this low on the totem pole, but it's still an absolutely crucial characteristic that your audience is looking at.

Make sure to have some statistics on hand to set expectations for the performance your customers should expect to see. Historical data that shows high up-time, speed, and responsiveness will resonate with users, who expect to see them written out in the SLAs they sign. 

Scalability is also a huge aspect that can't be overlooked. You've got to show that your own resources won't hold them back in the case that they experience extreme growth. Your job is to enable their growth. Make sure they know your organization is excited and fully capable of fulfilling that challenge.

 

 

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Topics: hosting industry, cloud services, Industry News

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