MARKET REVIEW
Movement to the cloud T
he cloud market should be a magnet to resellers wanting to be part of what has been described as a
modern industrial revolution. Like any opportunity, first mover advantage is key and resellers should act now, but the move is not risk-free. “It is critical for resellers to correctly and authoritively advise customers about cloud services or risk losing them to rivals, warns Simon Howitt, Channel Business Unit Director, Outsourcery. “If the reseller is not re- shaping its businesses to encompass a cloud model they could miss a window of opportunity that will develop over the next two years.”
Ian Moyse
The big question surrounding the cloud computing model is not whether it will take off, but when, meaning that resellers should read the writing on the wall and make a plan for widespread adoption of the cloud.
Research indicates that cloud computing will be the next big thing in IT and if resellers want to sustain a strong position they need to get on board now. This will involve skilling up in areas of technology that are unfamiliar. “What will be critical is the ability to provide sound advice and then deliver on that advice,” added Howitt. “We recognise that not every reseller has the resource to do this themselves so Outsourcery has factored this into its InPartnership scheme, providing reseller support.”
There are a number of areas that cloud solutions can help resellers and their customers. Cloud as a delivery mechanism for software services drives down the cost of deploying and consuming technology. Resellers can help customers improve productivity and competitiveness by offering the latest technology with less cost and more flexibility.
Solution mix There is a strong belief that everything will eventually go to the cloud, but this will not be the case, believes Ian Moyse, EMEA Channel Director at Webroot. “Instead we will see a utilisation of the right technology for the right function, relevant to individual business needs and budgets. We will see a mix of on-premise and cloud,” commented Moyse. “On-network solutions will continue as cloud, both private and public, as they provide customers
with a wider array of choices. It’s certainly not a case of ‘either or’ with cloud and on-premise.”
Revenues previously exclusive to on- network product solutions will be spread across software, appliance, private and public cloud deployments meaning the available spend is more distributed and puts resellers at risk of losing their historical status quo renewals, unless they step up and offer the new form factor options. “Demand for more mobility, device independence and lower maintenance costs will continue to drive cloud up the customers’ consideration list,” added Moyse.
Routes to market Channels and routes to market will evolve to the new mixed world, and new routes to market will develop for vendors through xsp and telco type providers. “Some resellers could find themselves at risk of failure from a combination of the recession, new threats and changing landscapes, as new channel competitors appear through start-ups and new business models challenge all involved,” added Moyse.
The good news for the channel is that this is a growth area where customers are looking for advice and help. The bad news is that many channel players are steering clear of the cloud for the wrong reasons. “Selling cloud will involve mastering new skills in areas such as sales, marketing, operations and billing and will require changes to commission schemes and revenue models,” commented Moyse. “However, many will find it easier than they expect once they embrace the opportunity. The longer resellers wait before starting the process the lower their chance of benefitting from this sizeable opportunity linked to one of the IT world’s fastest growing trends.”
As more businesses move their data off site onto cloud storage the market will see a shift towards the provision of hybrid data products (a combination of onsite and cloud services), believes Matthew Brennan,
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Business Development Manager, Netplan. “As companies deploy cloud virtualisation across their IT platforms resellers will have to become knowledgable about this new technology and allow their clients to make the most of pay as you go services,” said Brennan. “The mobility of cloud products means that the market will be more open than in the past, with clients able to move their business around to get the best service and performance.”
As VMWare Certified Professionals, Netplan is moving towards a PAYG model with its cloud servers. It’s clients can login and create virtual machines for specific applications and roll them out and be billed automatically, only for the nodes they have used. But despite movements towards the cloud many resellers are still unsure about how to position it without encouraging churn in their traditional estate. “There’s much deliberation in the channel about how to best position a service that will deliver the customer experience that they want, while making sure they make the same margin and provide a product which they can build a business on,” noted Brennan.
Netplan’s resellers use the company’s cloud services as a way of establishing further residual income streams from their client base. By offering hosted services such as Microsoft Office, Hosted Exchange and IP PBX, Netplan provides its channel partners with an all in one-stop-shop for total end-to-end business services. The company also offers WAN and LAN connectivity, domain names, website hosting and cloud servers.
By using Netplan to offer this range of white labelled solutions, resellers can move their business into new technologies while Netplan provides the back room support staff. Brennan commented: “Obviously, the more services that are provided to a company the stronger the relationship, and by leveraging our product line to offer maximum services resellers can create a package that fits their business model.” n
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