By Ian Moyse, Workbooks UK,
Sales Director, Eurocloud UK Board Member and Cloud Industry Forum Governance
Board Member
The big C when it comes to Cloud for the Channel is
Conflict. I have been presenting and visiting partners around Europe for the
past several years and listening to the opinions and input from vendors, Vars,
Resellers, MSP’s, ISP’s and a variety of channels by varying name definitions
and one things for sure, the Cloud has certainly stimulated debate.
Whether it be concern, nervousness, confusion or mistrust, a
lot of negative feelings have been generated in the channel by the C word. And
yet there also are a growing number of channel cloud players, either from the
traditional space finding their feet in Cloud solutions or thoroughbred
new-born channels who focus only cloud. Take a look at examples such as
Cloudmore from Sweden, Outsourcery in the UK, Jamcracker out of the USA,
SaaSplaza from the Netherlands and new entrant SaaSMax from the USA and you quickly get a vision of a new opportunity
that is presenting itself for a regeneration of the channels to market as we
have known them.
We also see traditional distributors building cloud
divisions, look at Ingram and Tech Data, both strategizing around cloud and
formulating aggregation strategies to keep
their hand in as much of the revenue we have known go through as product
(software and hardware) sales are combining to be spent on single cloud
solutions.
Customers will buy cloud, not because of the term or the
hype, but because of the business outcome and benefits it can bring, be they
rapid turn it on availability, more resilience, more flexibility in a world of
consumerisation and BYOD (Bring Your Own Device) or simply reduced cost of both
implementation and on-going usage.
It is therefore important that the channel between the
vendors and the customer get to grips with cloud solutions, terminology and the
value propositions they can bring and understand what they will need to adapt
to in terms of selling, marketing, billing and their value to not only the
customer in this new form factor, but also to the vendor. Shying away from this
will leave the customer and vendor with no option but to both court and find
each other. The more and longer cloud is resisted by the channel, the more
pressure there will be on vendors who have heavily invested in cloud to push
directly.
As cloud solutions move towards more competitive and
flexible billing their will of course be challenges for the traditional
reseller approach, but these are not insurmountable if the adoption and
adaption to these starts now. Leave it too far down the path and the transition
will be painful and like jumping off a cliff, rather than going down a gentle
gradient as the landscape changes.
There are already plenty of examples of pure play cloud
resellers, oft newly started by employees made redundant and deciding now is
the time to make their own path. They
are growing fast with low cost overheads, no legacy renewals or worry about
cannibalising existing business. Everything is upside to them and they are
showing the example that cloud can be a reseller success and drive profitable
revenue, different agreed, but why discount because of form factor and change.
I still hear it asked often by Cloud Vendors, do we need a
channel at all for cloud solutions and also occasionally this is coming from a
person with Channel firmly in their job title, a worrying trend. A belief that
the world has changed overnight, cloud can only be sold direct, there is no
need for a channel . Yes in retail cloud has enamoured change, and consumers
are changing buying patterns, particularly the young. But still there is a
place for the brick and mortar retailer. The supermarkets are booming, they
have taken on more ranges branching into videos, books, home appliances and
even banking and insurance. Being able
to adapt is key to survival and surely us as an educated species is capable of
doing this when it comes to Cloud.
What we will see for sure is a change of the go to market
landscape. Traditional resellers may find themselves having new competitors in
this arena. It will not necessarily be one of their reseller peers bidding
against them but perhaps a Managed Service Provider (MSP), an Internet Services
Provider (ISP) or a telecoms reseller bidding cloud as part of their monthly
billing solution set.
The Telco and Xsp type go to market channels are expanding
into cloud for many reasons. Key is the fact that they already have the billing
models and customer relationships in place. They already have customers who
they bill monthly for example for a range of services and much like with mobile
phones where the market has expanded from the basic access contract to a
variety of additional services such as TXT messaging, video download allowance,
web browsing, roaming hotspot service etc
the providers are now seeking additional services which they can offer
to their client relationships and billing cycles. Contrary to this the IT market in general has
been delivered on a supply and pay up front model historically. Cloud is
changing the model to one where IT is delivered online in a periodic billing
model and the value the channel brings is evolving. Telco’s as part of this
have a large base of customer relationships to leverage, the infrastructure and
funds to build out cloud services and the billing tools and relationships to
handle what customers will expect. IT channels are going to have to adapt to
this as they find new competition from the Telco and Xsp space. Also we are
likely to see an increase in Communication providers (those provide telephony
and the services and billing around this) and theoretically anyone who has a large
spread of customer billing relationships, perhaps we will even see cloud
services being sold through surprising channels down the line such as the
supermarkets (perhaps selling cloud units, storage or credits much like mobile
phone credits today). After all, go back
20 years and no one would have believed that you would be banking and insuring
through this route to market.
Cloud is here to stay, under whatever name you wish to call
it (SaaS, Public, etc) and customers will increasingly become comfortable with
its form factor and delivery and as this happens if you as a channel have not
given them enough value to buy it though you, likelihood is they won’t. Leverage your customer relationships now,
talk to your clients about this new arena, educate yourself and work out the
sweet spot for you and execute against it.
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