10 Aug, 2020
Google Cloud partner ecosystem is thriving and valuable to partner companies, says IDC
Cloud

Companies basing their cloud infrastructure on Google’s services can expect to see $7.54 in revenue for every $1 spent by 2025.

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Google’s Cloud Partner Advantage program can deliver massive benefits to its members, to the tune of 35% year-over-year growth in the Google Cloud side of their businesses, said market analytics firm IDC.

Google Cloud Channel Chief Carolee Gearhart summed up IDC’s study succinctly in a blog post: “Demand for cloud technology and services is growing rapidly, as businesses embark on digital transformations, and Google Cloud partners are particularly well-positioned to help customers plan and execute their digital transformation strategies,” she said.

SEE: Top cloud providers in 2020: AWS, Microsoft Azure, and Google Cloud, hybrid, SaaS players (TechRepublic)

The IDC study itself paints a more detailed picture of how Google Cloud partners are benefitting from their membership in the program, and no better metric shows that than the net new partner revenue Google Cloud partners can expect to see over the next six years: $341 billion. 

“Looked at another way, for every $1 of Google Cloud technology sold in 2020, partners will generate $5.32, predominantly through their own offerings (services and software) but also from resale margin. By 2025, that number will top $7.54,” the report said. 

These numbers may come as a surprise in the midst of the global coronavirus pandemic, but IDC said that despite economic concerns, cloud growth and IT spending in general has been higher in 2020 than in 2019. 

Software spending has increased by 13%, hardware spending by 10%, and service spending is expected to increase by 9% over the course of the year. “I’ve seen firsthand how the global pandemic has further increased businesses’ needs for these capabilities, as they seek to quickly adapt or even to take this opportunity to accelerate their digital transformations,” Gearhart said. 

How partnership is benefitting Google Cloud partners

IDC said point blank that cloud partners are maximizing their growth: As mentioned above, the average partner is seeing 35% yoy growth, and in addition 20% are seeing yearly revenue growth over 75%.

Along with economic value, IDC reports that Google Cloud partners are also showing high rates of digital maturity, with a full 50% in the “late stages” of digital transformation, meaning they’re seeing significant results or have fully integrated their businesses. 

SEE: Server migration checklist (TechRepublic Premium)

Digitally mature organizations, which IDC defined in the report as “partners that have digitally transformed their businesses across sales, marketing, operations, and HR,” saw considerably more benefit from being a Google Cloud partner than the average business:

  • Mature organizations saw 13% higher Google Cloud Revenue as a percent of total business
  • An additional 12% were Google Cloud Build partners
  • Mature partners saw 10% higher YoY revenue growth
  • Mature partners had 12% higher YoY revenue growth related to Google Cloud. 

If your organization is considering becoming a Google Cloud partner, there are a few important things to take away from the report, namely that digital maturity is going to be a major differentiator between being an average partner and one that sees the greatest return in investment.

Google Cloud partners are, in many cases, organizations that are reselling Google Cloud services with their own products or services as an additional product. AI, infrastructure automation, analytics, IT support, and other services are common reseller businesses. 

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In less digitally mature cases, partners simply “lift-and-shift” (that is, move a client service to the cloud without making any changes). “The cloud market continues to evolve beyond lift-and-shift engagements to cloud-based solutions that address business outcomes,” the report said. 

Google Cloud partners mentioned in the report, like global partner EPAM Systems, start with lift-and-shift, but their digital maturity and ability to capitalize on Google Cloud’s services are what set them apart. “Partners are riding the wave of cloud adoption to engage customers across the life cycle, which has become a recipe for success for partners with a focus on their own services and software and the Google Cloud portfolio,” the report said.

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