How To Develop Monetization Strategy For Data Centers Offering IaaS Solutions

Today, cloud is becoming one of the primary locations for businesses to store data, critical workloads and applications. Cloud-based technology has provided a robust solution for software companies and tech-based enterprises, empowering them to create innovative tools that empower other businesses in return. Enterprises across the globe are modernising their data platforms to leverage from this. In recent times, the cloud market has seen an upsurge and this is mainly driven by its ability to offer agility, flexibility and the ability to scale as per requirements while at the same time offering the ability to manage expenses effectively. In 2019, the industry was worth over US$ 229 billion and will most likely grow to US$ 500 billion by 2023. With this figure in mind, data centres are in the right position to benefit from offering infrastructure as a service (IaaS) solution in the local markets.  Data centres are geographically in the right place and are equipped with the right base infrastructure to cater to the requirements of the local cloud markets. They also understand the local data regulations, tax laws and also have strong existing relationships with many businesses and customers which works to their advantage while selling their cloud offerings. In short, they already possess all the key assets required to provide local cloud services.


Why is there a demand for local cloud services? Why are data centres best placed to offer these services?

Most businesses, start-ups and enterprises are rapidly adopting cloud technologies, due to their most obvious and widely known advantages – namely, reduction in capital and operating expenses, better storage management, flexibility in scaling up and scaling down of resources, and low latency.

  • Businesses prefer to hire infrastructure rather than purchasing it outright. It can reduce capital as well as operating expenses on server maintenance.
  • By moving to the cloud, they get the flexibility to scale up resources and scale down as required without financial losses. They pay only for what they use and can stop paying for what they don’t use.
  • With local data centres offering cloud services, local businesses and enterprises get low latency services.
  • Their demand for local currency billing can be easily met and there will be no foreign exchange costs to consider.

It’s been established that there’s a demand. It’s also been established that data centres offering IaaS solutions are the most aptly suited to cater to this demand.

How can data centres build a local public cloud service in a competitive market?

Getting started with a local cloud business requires the right mix of technology infrastructure and the ability to cater to the needs of the local market. As a data centre, you already possess these two key requirements. Even though the presence of the hyperscale cloud providers will always be there, their reach may be quite limited due to various factors such as the data localisation norms and availability of a large enough market for effective operations. To help you understand how you can leverage this to start you own local public cloud business, we have put together a detailed blog:

After you have set up a cloud business in your region, it’s time to think of techniques to monetise it. In our previous blog post, we have discussed how to target your first 20 enterprise customers. In this post, let’s delve into how you can effectively monetise your cloud and offer differentiated, localised services to your customers.


How will you monetise your cloud business?

As the demand for cloud services increases, there are a number of service providers who are diving into this business to provide localised public cloud services. With the presence of global hyperscalers and localised domestic cloud providers, here’s how you can monetise your cloud business:

1. Differentiate

Today’s best SaaS monetization models rest on the foundation of developing unique value propositions. For IaaS monetization models, it’s not significantly different. While 77% of the cloud market belongs to five giants— Amazon, Microsoft, Alibaba, Google, and IBM— smaller cloud service providers can give excellent benefits. 

Some benefits that data centers can capitalize on as cloud service providers include enhanced protection and reliability, given that a smaller player can provide more attention and care to a smaller sample. IaaS solutions also help clients save time and resources, given that smaller players can have more attention at a smaller cost. Differentiating a smaller IaaS reselling business to a big player is like comparing McDonald’s with a specialty burger shop. You may not have the size, but you have the advantage of customization and the boutique experience, in which many people would gladly invest.


2. Localize

In an age of advanced globalization, there seems to be a re-shifting back toward localization. In Africa, for instance, banks are starting to invest in artificial intelligence and machine learning tools to improve and contextualize the customer experience. With the growing demand for localized tech-based services, cloud service providers- even those in developing markets–can leverage the movement towards supporting local solutions.

Localizing your approach makes you an instant favorite for a profitable segment of the local tech market and a possible forerunner as one of your local community’s most notable technology partners. In an age where companies take their businesses global, there is still power in building your business up to be a champion for the local. Build awareness amongst smaller firms in need of IaaS providers or tech-based companies and larger corporations that use cloud-based technology.


3. Incentivize

One substantial advantage that localized players have over global brands is their understanding of the local community’s felt needs. This edge gives them better insight into what additional incentives might get companies to switch over to smaller cloud service providers and data centers.

Local cloud services offer many benefits already, but smaller data centers can sweeten the deal more by further incentivizing their offers. Some great monetization strategy examples around incentivizing include adding think dev platforms, containers, data pipelines, machine learning, DevOps, automation, and other services. One other way to incentivize is to provide cheaper plans for longer subscriptions, such as giving a sizeable discount when clients sign up for a year instead of a month’s worth of services.


4. Inform

In the realm of service as a software and infrastructure as a software, information can be the deciding factor to a long term relationship with a client. In the case of billing for instance, customers can often lose trust towards a provider after experiencing one or two bill shocks. 

Another idea around this strategy would be to build a tool-based community both online and offline that can share best practices and ideas around business productivity, technology, and other topics around the context of work. Providing real-time reports on billings, deals, news, offerings, and other business opportunities can help create strong long-term relationships with clients and partners. Data centers should also provide real-time notifications on essential account activity or critical usage that clients should be aware of at any point.


5. Reward

Smaller providers also have the added boutique-experience edge of rewarding clients with highly-customized expressions of gratitude. Provide your customers with limited period bonus services every time they cross a certain usage level or criterion. Some bonuses can include a period of free services, free upgrades, a free limited subscription to an adjacent service, and many other ideas. The sky’s the limit when it comes to creatively rewarding loyal customers.

Where cloud services are going?

cloud services

There is a long list of cloud management software solutionsStill, as the need for more cloud-based services continues to grow with time, a portion of the market will start looking towards more easily accessible localized data centres that can deliver cloud services. This is the main reason that localised cloud services will be the solution that enterprises seek. Extreme agility and accessibility along with the ability to keep operating costs low, make it an appealing option as compared to owning the infrastructure. This increasing demand is exactly why data centres offering cloud solutions are in the right position to take up this opportunity. Effectively monetizing these cloud services can give another income-stream for data centres and solve sustaining operations for the many years to come.

IndiQus has helped a number of data centres across the globe to offer localised services, monetise their offerings and derive ROI too. If you are a data centre and would like to know more about how you can develop a monetisation strategy for your IaaS services, you can reach out to us and our cloud consultants will be happy to help!