By Scott Seaton, Logicalis US Business Development Specialist, Solution Providers
Early to mid-stage software companies are in an intense race. The winners reap huge rewards while others fade into obsolescence. The rules of the competition are simple: Develop and deliver better features faster and sell them more effectively than the other guy—and do it all within limited budgets.
It’s extraordinarily challenging, but it’s worth it. And the smartest players know that every move a company makes needs to be strategic—especially when it comes to spending money.
What’s the greatest payback you can get on every dollar you spend today?
A pretty important question….and the answer can be guided by another question: How much of your immediate spend is going directly to growing sales and product development?
If you’re putting today’s dollars into building support systems and teams that you may eventually need, you’re dumping precious oxygen into an assumption of your future—two, three or five years out. Meanwhile, your more savvy competitors are fueling a growth engine and reducing your odds of survival with each new release and deal they ink.
Just because your people are smart enough to build anything doesn’t mean you should pay them to do so
You’ve likely already outsourced at least some of your data center needs to the cloud. And by now you’ve also realized that the cloud isn’t magic. It’s raw capacity. In fact, doing a great job of delivering your solution still takes a ton of systems architecture, networking and IT services talent—even in the cloud.
You’ve solved a hardware CapEx problem. But as you scale, you’re back to square one with a human capital problem that has (at best) a distant association with your growth mandates (i.e. a cost center).
Invest now in growth and product, then slowly consume everything else
Use the money you have now to hire more sales, software development and customer experience experts. This is how rapid organic growth can happen in highly-competitive markets. It’s also how to take good business off the street and step on your competitors’ air supply in your key verticals.
At the same time, find a top cloud and managed services partner to complete the service delivery picture. The really good ones have decades of global experience constructing and operating enterprise service delivery that would take you millions of dollars and many years to emulate.
Even if TCO analysis shows you eventually paying a premium for outsourced services compared to DIY, your early-focused sales and product investment will earn you millions in new revenue and solidify your software in the market. Don’t forego an opportunity to become a market leader with fewer and weaker competitors because you are trying to save $150K over a four-year period.
Pick somebody good…demand a lot…and then work with them to win
When evaluating cloud and managed services partners, seek the following:
- Strong SLA: Obvious, but needs to be listed here. It’s your anchor for all expectations.
- Cloud agnostic: Partner with someone that can help you take advantage of emerging innovations and the pricing war going on between the major cloud IaaS and PaaS providers.
- Deep, broad expertise: You never know when you’ll need a point solution specialist for something, and it’s great to get that expert quickly from someone you already trust.
- Large global footprint: Although renting cloud servers around the globe is easy, global solution delivery can get tricky fast. Positon yourself by partnering with someone that is experienced with managed solution delivery in your priority target regions.
- Experienced with software companies: Make sure your partner really understands the one-to-many model and has strong experience delivering services as part of a greater solution to end-customers.
- Emphasis on your business, not just their technology: A good partner will invest in your success with business planning, collaborative sales development and marketing programs.
There are lots of smart ways to grow a software business. Doubling down on sales and product is often the surest way to get and stay ahead in a hyper-competitive field. And working with a managed cloud services partner can enable that focused investment in growth while ensuring service quality and scalability.
Regardless of strategy, it’s important to continually ask yourself what type of empire you are trying to build—a software company or an IT department—and invest accordingly.
Logicalis is a global cloud and managed services leader with nearly 4,000 employees operating in 24 countries. Our Solution Providers Practice is dedicated to enable, support and accelerate software companies’ growth across global markets with reduced time and risk. To find out how we can help your firm, click here for more information.