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Partner return on Investment jumps to 86%, according to Forrester Total Economic Impact Study

Over the past year we’ve seen incredible changes in how people worked, but also how software developers and IT practitioners innovated. Customers are shifting their businesses well past infrastructure and migrating, in quickly forward, towards the next era of their cloud evolution.

Forrester predicts cloud spending to develop at 38% CAGR through 2022, which is 7% higher than initially projected. This accelerating growth in the market, combined with strong partner incentives and benefits, represents a rapidly growing business opportunity for Google Cloud companions. 

Google recently commissioned Forrester Consulting to conduct a Total Economic Impact™ (TEI) research to understand the business opportunity for companions that construct and scale Google Cloud solutions. Their analysis shows the potential for companions to achieve an 86% return on funding (ROI) – up from 50% in the previous research. 

Not only is ROI accelerating, but they also found: 

  • Partners make $5.70 (versus $5.20 in the previous research) in downstream revenues across sell, service, and construct revenue streams for every dollar a customer spends on Google Cloud consumption.

  • Partners included in the research shared that 50% or more of their business comes from existing clients. This tells us once a customer chooses to migrate to the cloud they are investing for the lengthy term. 

  • The practice break-even point is 14 months, a 33% decrease from the previous research.

  • Gross profit margins increase from 34% in Year 1 to 44% by Year 3.

The research also explored the key factors underpinning this growth in ROI, which included:

  • Incentives and certifications help companions thrive: According to the Forrester research, “Google’s straightforward incentives program has a significant impact on the practice’s margins and profitability.” Since the last Forrester research in 2019, Google Cloud has streamlined and strengthened our incentives portfolio.

    Partners also noted that incomes a Specialization allows them to differentiate themselves and opens doorways to new business opportunities. Our companions who achieve Specializations and certifications are able to provide the expertise that many clients don’t have in-house and need in order to modernize their infrastructure. 

  • Partners with the most profitable practices span Google Cloud Engagement Models: Sell, Service and Build. Partners are finding success across a variety of Engagement Models and the most successful companions are those building a broad range of professional services to support our technology, as well as those who are developing their own intellectual property on Google Cloud. 

  • Providing services helps companions’ businesses prosper 
    Forrester concluded that recurring choices, such as managed services on Google Cloud, provide significant and constant revenue for our companions. Revenue generated by recurring choices grew at a 73% CAGR

    Partners are successful when they provide an array of diverse services for clients. And services not only increase the general deal size but also the profit margin. Additionally, our companions who specialize in a technology resolution, such as Kubernetes or DevOps, can provide this expertise as an added service and it helps ensure the success of the project. Forrester noted that revenue from reselling and providing services around Google Cloud represents 76% of total partner revenue.

We see a shiny and prosperous prospective ahead for our companions. Our companions are key to delivering the solutions that clients need to accelerate their journey to the cloud and ultimately help them transform their businesses. To learn more, download and read Forrester’s full TEI research, “The Google Cloud Business Opportunity for Partners,” here. To learn more about Partner Advantage, visit https://cloud.google.com/companions/become-a-partner

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