Cloud Recurring Revenue Calculator

by myCloudSage.com

A cloud solution provider’s business is complex. We all know it takes an effort to build the right business model and execute it well. We all think that way. That said, technology decision makers think quite differently when it comes to revenue.
For example, technology business decision makers may think in the following way: “We need to grow our company by 10%. Can we do it by selling cloud services?” “We just got a cloud request. How should we price the proposal to be profitable?” It does not have to be so complex. But what if we flip your thinking with an end goal in mind? Let’s say, you want to make $250,000 revenue per year selling cloud solutions and services. The best way for you to do this is to work backwards to figure out what works the best for you. We know. This is hard. We got you covered.

The Cloud MRR Calculator is the solution:

We designed the Cloud MRR Calculator to help estimate your cloud revenues by playing with different levers to sell your cloud services.

Here is how you need to use the Cloud MRR Calculator to define your cloud opportunity:

  • Define the cloud solution that you want to sell to your customer.
  • Identify proof of concept (POC) pricing for your cloud services. It can be $5,000, $10,000, $20,000 or more. Keep it below $25,000 for any POC. This is a fixed price.
  • Identify cloud vendor products you will stitch together to estimate the monthly investment the customer needs to make to access the cloud solutions. Then, identify your margins. Hint: Work with your distributor or directly with your cloud vendor to secure the commission structure for reselling their cloud products.
  • Define your managed services. The best way to come up with a number is to identify the number of resources you may need and what their going rate in the market is. Put it all together. For example: Suppose we are offering a cloud app development service for a medium sized company where we have sold $10,000 for a proof of concept. To price our managed services, we would price for 1.5 people every month plus any tools subscriptions that may be needed. That comes to around $5,500 per month. We would recommend a ten-month contract for the customer.

Once you have all the numbers including the number of customers, you can identify the total cloud opportunity for your business. Keep playing with the Cloud MRR Calculator until you are satisfied. If you want to share your thinking with your team, download a PDF version. Also, click on the video to learn how to use the Cloud MRR Calculator to build your cloud business.

Also, please send feedback and ideas to improve this solution!

Read more...
1. Enter your Proof of Concept estimates:

# of Customers

(Using Your Solution)

Proof of Concept Costs

(Per Customer Setup)

2. Enter Your Product Resell estimates:

Monthly Cloud Product Resell

(Per Customer)

Estimated Margins

(Usually between 5% to 20%)

3. Enter Your Managed Services estimates:

Monthly Maintenance

(Per Customer)

Contract Period

(in months, max 36 months)

Total Cloud Opportunity Value

${{monthly_maintenance*contract_period* no_of_customers+no_of_customers*monthly_resell_volume/100*resell_margins+no_of_customers*solution_set_cost | number : fractionSize}}

Month # Cumulative Revenue per Customer Cumulative Total Maintenance Revenue Total Resell Revenue Total Cloud Revenue
Month 1 ${{monthly_maintenance | number : fractionSize}} ${{monthly_maintenance * no_of_customers | number : fractionSize}} ${{no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}} ${{monthly_maintenance * no_of_customers+no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}}
Month 2 ${{monthly_maintenance*2 | number : fractionSize}} ${{monthly_maintenance*2 * no_of_customers | number : fractionSize}} ${{no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}} ${{monthly_maintenance*2 * no_of_customers+no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}}
Month 3 ${{monthly_maintenance*3 | number : fractionSize}} ${{monthly_maintenance*3 * no_of_customers | number : fractionSize}} ${{no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}} ${{monthly_maintenance*3 * no_of_customers+no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}}
Month 4 ${{monthly_maintenance*4 | number : fractionSize}} ${{monthly_maintenance*4 * no_of_customers | number : fractionSize}} ${{no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}} ${{monthly_maintenance*4 * no_of_customers+no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}}
Month 5 ${{monthly_maintenance*5 | number : fractionSize}} ${{monthly_maintenance*5 * no_of_customers | number : fractionSize}} ${{no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}} ${{monthly_maintenance*5 * no_of_customers+no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}}
Month 6 ${{monthly_maintenance*6 | number : fractionSize}} ${{monthly_maintenance*6 * no_of_customers | number : fractionSize}} ${{no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}} ${{monthly_maintenance*6 * no_of_customers+no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}}
Month 7 ${{monthly_maintenance*7 | number : fractionSize}} ${{monthly_maintenance*7 * no_of_customers | number : fractionSize}} ${{no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}} ${{monthly_maintenance*7 * no_of_customers+no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}}
Month 8 ${{monthly_maintenance*8 | number : fractionSize}} ${{monthly_maintenance*8 * no_of_customers | number : fractionSize}} ${{no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}} ${{monthly_maintenance*8 * no_of_customers+no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}}
Month 9 ${{monthly_maintenance*9 | number : fractionSize}} ${{monthly_maintenance*9 * no_of_customers | number : fractionSize}} ${{no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}} ${{monthly_maintenance*9 * no_of_customers+no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}}
Month 10 ${{monthly_maintenance*10 | number : fractionSize}} ${{monthly_maintenance*10 * no_of_customers | number : fractionSize}} ${{no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}} ${{monthly_maintenance*10 * no_of_customers+no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}}
Month 11 ${{monthly_maintenance*11 | number : fractionSize}} ${{monthly_maintenance*11 * no_of_customers | number : fractionSize}} ${{no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}} ${{monthly_maintenance*11 * no_of_customers+no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}}
Month 12 ${{monthly_maintenance*12 | number : fractionSize}} ${{monthly_maintenance*12 * no_of_customers | number : fractionSize}} ${{no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}} ${{monthly_maintenance*12 * no_of_customers+no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}}
Month 13 ${{monthly_maintenance*13 | number : fractionSize}} ${{monthly_maintenance*13 * no_of_customers | number : fractionSize}} ${{no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}} ${{monthly_maintenance*13 * no_of_customers+no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}}
Month 14 ${{monthly_maintenance*14 | number : fractionSize}} ${{monthly_maintenance*14 * no_of_customers | number : fractionSize}} ${{no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}} ${{monthly_maintenance*14 * no_of_customers+no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}}
Month 15 ${{monthly_maintenance*15 | number : fractionSize}} ${{monthly_maintenance*15 * no_of_customers | number : fractionSize}} ${{no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}} ${{monthly_maintenance*15 * no_of_customers+no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}}
Month 16 ${{monthly_maintenance*16 | number : fractionSize}} ${{monthly_maintenance*16 * no_of_customers | number : fractionSize}} ${{no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}} ${{monthly_maintenance*16 * no_of_customers+no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}}
Month 17 ${{monthly_maintenance*17 | number : fractionSize}} ${{monthly_maintenance*17 * no_of_customers | number : fractionSize}} ${{no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}} ${{monthly_maintenance*17 * no_of_customers+no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}}
Month 18 ${{monthly_maintenance*18 | number : fractionSize}} ${{monthly_maintenance*18 * no_of_customers | number : fractionSize}} ${{no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}} ${{monthly_maintenance*18 * no_of_customers+no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}}
Month 19 ${{monthly_maintenance*19 | number : fractionSize}} ${{monthly_maintenance*19 * no_of_customers | number : fractionSize}} ${{no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}} ${{monthly_maintenance*19 * no_of_customers+no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}}
Month 20 ${{monthly_maintenance*20 | number : fractionSize}} ${{monthly_maintenance*20 * no_of_customers | number : fractionSize}} ${{no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}} ${{monthly_maintenance*20 * no_of_customers+no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}}
Month 21 ${{monthly_maintenance*21 | number : fractionSize}} ${{monthly_maintenance*21 * no_of_customers | number : fractionSize}} ${{no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}} ${{monthly_maintenance*21 * no_of_customers+no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}}
Month 22 ${{monthly_maintenance*22 | number : fractionSize}} ${{monthly_maintenance*22 * no_of_customers | number : fractionSize}} ${{no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}} ${{monthly_maintenance*22 * no_of_customers+no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}}
Month 23 ${{monthly_maintenance*23 | number : fractionSize}} ${{monthly_maintenance*23 * no_of_customers | number : fractionSize}} ${{no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}} ${{monthly_maintenance*23 * no_of_customers+no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}}
Month 24 ${{monthly_maintenance*24 | number : fractionSize}} ${{monthly_maintenance*24 * no_of_customers | number : fractionSize}} ${{no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}} ${{monthly_maintenance*24 * no_of_customers+no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}}
Month 25 ${{monthly_maintenance*25 | number : fractionSize}} ${{monthly_maintenance*25 * no_of_customers | number : fractionSize}} ${{no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}} ${{monthly_maintenance*25 * no_of_customers+no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}}
Month 26 ${{monthly_maintenance*26 | number : fractionSize}} ${{monthly_maintenance*26 * no_of_customers | number : fractionSize}} ${{no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}} ${{monthly_maintenance*26 * no_of_customers+no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}}
Month 27 ${{monthly_maintenance*27 | number : fractionSize}} ${{monthly_maintenance*27 * no_of_customers | number : fractionSize}} ${{no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}} ${{monthly_maintenance*27 * no_of_customers+no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}}
Month 28 ${{monthly_maintenance*28 | number : fractionSize}} ${{monthly_maintenance*28 * no_of_customers | number : fractionSize}} ${{no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}} ${{monthly_maintenance*28 * no_of_customers+no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}}
Month 29 ${{monthly_maintenance*29 | number : fractionSize}} ${{monthly_maintenance*29 * no_of_customers | number : fractionSize}} ${{no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}} ${{monthly_maintenance*29 * no_of_customers+no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}}
Month 30 ${{monthly_maintenance*30 | number : fractionSize}} ${{monthly_maintenance*30 * no_of_customers | number : fractionSize}} ${{no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}} ${{monthly_maintenance*30 * no_of_customers+no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}}
Month 31 ${{monthly_maintenance*31 | number : fractionSize}} ${{monthly_maintenance*31 * no_of_customers | number : fractionSize}} ${{no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}} ${{monthly_maintenance*31 * no_of_customers+no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}}
Month 32 ${{monthly_maintenance*32 | number : fractionSize}} ${{monthly_maintenance*32 * no_of_customers | number : fractionSize}} ${{no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}} ${{monthly_maintenance*32 * no_of_customers+no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}}
Month 33 ${{monthly_maintenance*33 | number : fractionSize}} ${{monthly_maintenance*33 * no_of_customers | number : fractionSize}} ${{no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}} ${{monthly_maintenance*33 * no_of_customers+no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}}
Month 34 ${{monthly_maintenance*34 | number : fractionSize}} ${{monthly_maintenance*34 * no_of_customers | number : fractionSize}} ${{no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}} ${{monthly_maintenance*34 * no_of_customers+no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}}
Month 35 ${{monthly_maintenance*35 | number : fractionSize}} ${{monthly_maintenance*35 * no_of_customers | number : fractionSize}} ${{no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}} ${{monthly_maintenance*35 * no_of_customers+no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}}
Month 36 ${{monthly_maintenance*36 | number : fractionSize}} ${{monthly_maintenance*36 * no_of_customers | number : fractionSize}} ${{no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}} ${{monthly_maintenance*36 * no_of_customers+no_of_customers*monthly_resell_volume/100*resell_margins | number : fractionSize}}