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Despite the “just a load of hype” rhetoric that cloud computing has experienced in recent times, acceptance of this new IT model is gathering pace.
Gartner recently released its cloud predictions, forecasting the market will grow to $56bn in revenue this year alone. However, the analyst house’s view is that for at least another four years, the majority of this revenue will come from advertising. The ad-based revenue model is likely to be a stretch for even the most innovative of resellers, but does this mean the channel is ruled out of the cloud opportunity?
The concept of cloud computing has been around for years as a mainstream feature under various names such as hosting. Most people are familiar with it as off-premise computing in a centralised datacentre. This means that all computing resources, be they databases, applications or the latest trend of virtual desktop infrastructure, can be delivered externally from a cloud vendor.
This suggests that industry juggernauts with the biggest datacentres, such as Google, have the potential to bypass the traditional IT channel. In reality, few mainstream cloud vendors have the experience to take these services to business customers. Google’s recent challenges around Gmail outages confirm this.
Value in the cloud
Should resellers be building their own cloud to exploit the potential gap in the market? Definitely not. Building and managing cloud infrastructure is akin to resellers deciding to manufacture servers and PCs 20 years ago. Resellers should make the best use of their strengths: reselling and adding value.
There is a big opportunity for the channel to partner with cloud providers and resell infrastructure as a service, with other value-added services layered on top. For example, you can start off by providing a cloud-based desktop infrastructure service with familiar applications such as VoIP, a Windows desktop with Outlook, Word and Excel, and file storage on a monthly pay-as-you-go basis. This would result in a reliable recurring revenue stream. As customers gain confidence in this model, resellers can add applications such as Sage or a CRM database. Further value can be added through consultancy and management services.
Cloud services could become the heart of your entire business. Customer relationships would be transformed from a low-margin commodity play to high-value strategic partnerships generating high-margin recurring revenue. No longer will you need to stock and shift commodity tin.
In addition, the burden of managing this entire infrastructure is taken on by service providers, resulting in lower operational costs. Sales teams will become expert consultants who view customer value as something more than a one-off sale. This type of cloud model creates a huge revenue opportunity without a single pop-up or banner-ad in sight.
Embrace cloud now
While Gartner’s cloud predictions highlight a promising future for the IT industry, resellers do not have to wait four years for a slice of the action. The future is very much now.
We are already seeing significant interest from partners wanting our help to build their future cloud-based businesses. The paradigm shift rhetoric of old is actually applicable to cloud computing. But this change will only happen if the reseller community that made the first wave of business IT possible embraces this new channel model. ●