Resellers: Cloud is BIG, but it's a sales commission minefield We’ve all read about how cloud computing is "more than just a buzzword" or a passing phase. And we’re all well-versed in selling the benefits of cloud and managed services in terms of cost-savings, flexibility, managing complex tasks and only paying for what you use. There have also been plenty of wise words written about how …
Commissions are definitely a big barrier for salespeople to selling cloud services. For most companies the revenue from a cloud contract can only be recognised in the quarter in which it is delivered. A salesperson has a target for each quarter. That target combines licenses and services. In a cloud deal, the license component may be amortised over 2-3 years, i.e 8-12 quarters. So, for a given license deal, it requires about 10 cloud deals of a similar size to reach the same target. A salesperson has limited time to focus on deals to hit their targets. Where will they put their effort?
So, for those resellers who have made a commitment to the cloud either through investing in the infrastructure themselves or in partnership with another Service Provider, this is likely to be a big problem. I'm interested to hear from company principals and FD's to understand how they are incentivising their sales staff.
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