For software providers considering whether to move from an on-premise delivery model to a cloud-delivery model, two key reasons to do so are the ability to expand the target markets you prospect to and the channels through which you can generate revenue from existing customers.

From the perspective of your prospects, consuming software via the cloud is simpler and offers a different financial model: instead of a large CapEx to buy dedicated hardware and software, they can package their purchase as a monthly fee that fits into an OpEx budget. Prospects also no longer have to worry about managing the environment as well as the associated cost and complexity. You are thus likely to find that many more prospects can now afford to do business with you, and you’ve removed some major objections from the sales process.

From the perspective of customer revenue streams, on-premise software providers typically sell software and maintenance as a package, charging a large one-time payment. Convincing them to pay you again when you issue a new version requires another sales cycle.

But when delivering software via the cloud, that large single payment can be divided into a monthly annuity stream that continues at a steady, ongoing rate. OpEx renewals are typically much easier to close on compared to new CapEx purchases. You also know exactly when the renewal process will occur, which is not the case when trying to predict when a customer might purchase new on-premise software.

And by including infrastructure services in the initial sale, software providers can make money on a larger piece of the overall IT landscape. The customer has to run the software they purchase on something; you might as well also sell them cloud access on a recurring monthly basis and then earn that additional revenue over the long run.

To find out how Logicalis can help your organization expand prospect markets and customer revenue streams while leveraging the cloud to improve margins and enhance customer experiences, visit http://www.us.logicalis.com/microsites/cisco-isv/.