Making the transition from a transactional business to the cloud is tough.

That theme is echoing across the IT Best of Breed Conference in Orlando, Fla. this week, and a breakout session featuring Microsoft partner Rosebud Technologies was no exception.

Founded in 1995, Rosebud Technologies was a traditional on-premise partner, said Bryan Von Axelson, Office 365 Partner Lead at Microsoft, in a breakout session at the conference. The old model was still working for  Woodstock, Ga.-based Rosebud Technologies, he said, but the company recognized that the cloud was a "disrupter" and it would have to embrace the new model.

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When Roseubd Technologies looked to make the transition, Von Axelson said that it found its business model still fit, but key parts such as the delivery model had to be changed. As a result, Rosebud Technologies had to make some tough decisions around staff cuts and funneling more funds into marketing.

However, its efforts didn't go to waste. Five years later, Rosebud Technologies' customer base is up 100 percent and revenue is up 40 percent to 60 percent, he said. Productivity also is up 160 percent, he said.

"They made the decision to change the view of the partner, their business model. As they’ve come out of this transition, they have boosted their revenue and their leadership said it was absolutely the right move to cloud services," Von Axelson said.

Rosebud Technologies isn't alone in seeing massive growth from making a tough transition to the cloud. Showing numbers from Microsoft partners, Von Axelson said that cloud-oriented partners saw 1.6 times the gross profit of other partners, jumping to 52.3 percent gross profit from 31.8 percent. They also saw faster growth, 2.4 times that of other partners. Cloud partners are also better able to attract new customers, with 1.5 times higher customer acquisitions in the past 12 months, he said.

However, the transition isn't always a seamless one, Von Axelson said. He said he has seen partners struggling with figuring out how to compensate their sales force for cloud technologies, among other challenges.

cloud Microsoft is working to help partners figure out how to focus on delivering high-value services, including on-boarding, adopting and managing as well as enhancing their offerings. In particular, he said the transition was the driving reason behind Microsoft's push into what it calls the Cloud Service Provider model for licensing.

"It’s a way for all partners to transact in this new business model," Von Axelson said.

PUBLISHED OCT. 14, 2014