How to Make Profitable Margin on Public Cloud
This article aims to explain how a Profitable Margin can be attained when reselling Public Cloud. Cloud reselling revenue is generated through these levers:
1. Buy–Sell Margin
You buy services from Microsoft/AWS/GCP/resellers at your buy price and sell to customers at your sell price. There might be a margin offered by your Partner between the buy price and the sell price. Some offers, however, do not have this margin available and are offered with the same buy price and sell price.
2. Markups & Value‑Added Pricing
You add your own service margin on top of cloud usage:
- Add a % markup on products
- Add a % markup on product categories
- Use Pricing tiers (Base / Silver / Gold)
- Apply bundled support fees
- Apply managed‑service fees
3. Incentives, Rebates, and Credits
Vendors offer:
- Microsoft PEC/partner incentives
- AWS partner discounts, EDP terms
- GCP partner discounts and credits
- TD Synnex / Pax8 / Ingram promotions
Capturing and attributing these correctly means direct revenue uplift.
How to Make Revenue With Microsoft
Revenue Sources
- Azure Plan offers are often offered with a Partner Earned Credit (PEC), which is a discount on the price you pay as a partner.
- The CSP connector and price plan automatically take this into consideration if present.
- NCE Licences are offered with an Expected Retail Price (ERP), which is automatically applied in CloudBilling.
- Software Subscriptions have an ERP price, which can be achieved by setting up a standard markup in CloudBilling pricing rules.
- Azure Marketplace and Reserved Instances are discounted usage and are not offered with an ERP. A markup can be added to generate a Profitable Margin.
How to Make Revenue With AWS
Revenue Sources
- Margin on on‑demand usage
- Reserved Instances and Savings Plans arbitrage
(“Buy at rate X, sell allocation at Y”) - Cross‑account management fees
- Marketplace reselling margin
How to Make Revenue With Google Cloud (GCP)
Revenue Sources
- Partner pricing discounts
- Committed Use Discounts (CUDs)
- Markups on BigQuery/Compute/Storage
- Additional services (e.g., cost monitoring, tagging, reporting)
How to Make Revenue With Third‑Party Distributors (TD Synnex, Pax8, Ingram)
Revenue Sources
- Margin between distributor buy price and your sell price
- Distributor promotions & incentives
- Bundled service fees on licenses
To ensure a margin is generated, a standard markup can be set up in CloudBilling to generate a markup on products, product categories, or as management fees.