Cloud Providers Profit by Serving Nonprofits

One of the sure signs of a maturing company, or even an entire industry, is the ability to offer free services to nonprofit organizations in order to demonstrate benevolence. However, such charitable acts aren’t just about being altruistic. As a growing number of cloud providers are discovering, there are plenty of new revenue and profit opportunities in the nonprofit sector.

I have a particular awareness of the fertile market opportunities associated with the nonprofit world because I started my career working for United Way, the nonprofit fundraising organization that has been doing business for more than 50 years.

Many know United Way from its long-standing relationship with the NFL and regular promotional messages during the football broadcasts. While those advertisements focus on the millions of volunteers that deliver services funded by the United Way, there is an equally impressive group of corporate executives on the boards and operating committees of United Way and its member nonprofit agencies who are responsible for governing the allocation process and quality of services.

Virtues of Virtual

As a staff person supporting the fundraising and allocations processes, I saw firsthand how those executives interacted with each other. Very often their discussions wandered from United Way issues to their own business challenges, and the volunteer executives were eager to share information and ideas. They would trade tips about products and services that met their needs, and casually promote their own products and services when appropriate.

Things haven’t changed in the more than 30 years since I joined the IT industry. Back in my United Way days, the volunteer committees were populated with bankers, lawyers, insurance company executives and other local businesspeople.

Today, software and other smart technology companies have discovered that doing good can be good for business. Cloud vendors have become the latest group to get involved, driven in part by the need to educate Main Street business people about the virtues of their virtual services.

Salesforce.com is the clearest example of this tactic. It has been giving away its CRM and other Software as a Service solutions to nonprofit agencies for years, and Marc Benioff routinely asks people from these agencies to stand and be recognized at Salesforce.com events.

Rewards of Doing Good

Scan any of the governing boards of these agencies, and you’ll find plenty of corporate executives who represent key prospects for Salesforce.com and are exposed to its solutions in their work with these nonprofit agencies. Salesforce.com’s hope is that this exposure not only will generate goodwill, but also encourage the volunteer board members to consider Salesforce.com’s solutions for their own corporate needs.

More cloud vendors are recognizing the positive impact of Salesforce.com’s strategy and adopting their own initiatives to unearth similar results. One of the most recent converts to this tactic is Box, which announced the creation of Box.org to give eligible nonprofits up to 10 Box licenses free as part of a special starter package.

Medium to large-size nonprofits requiring more than 10 free seats will get a 50 percent discount off official Box list prices. The new program makes it easier for nonprofits to take advantage of Box’s collaboration software, and it gives Box an opportunity to expose the corporate executives working with nonprofits to Box’s solutions.

These charitable programs are good for nonprofits and good business for cloud companies, creating a classic win-win situation for everyone involved!