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The channel has changed dramatically over the last decade, with the bulk of those changes occurring in the last few years. It was bound to happen; after all, the channel in the IT space is driven by the technology on offer and the way in which companies are using those technologies. This in turn affects the way they are being sold and the relationships or partnerships that are being developed to accommodate this evolving approach. And of course, technology isn’t static — regardless of type, it is developing at such a rapid pace that the landscape looks completely different from one day to the next.
A case in point is the cloud; from its development as a concept in the 1950s, the advent of virtual machines in the 1970s and virtualised private networks, to mainstream adoption of private and public cloud options, and most recently a hybrid approach incorporating a mixture of these models — and the ability to manage this multi-cloud environment and shift workloads between them.
Cloud and the channel
How has cloud affected the channel? While there remains a place for hardware and on-premise resources, consider the popularity of the as-a-service IT environment and you can start to see the answer. In fact, SaaS is predicted to grow to a market size of $67 billion in 2018, while infrastructure as a service is already set to reach $16.5 billion this year.
Taking a step back, cloud computing has changed the way we do business — from operations and storage, to disaster recovery and development. As the technology matures and barriers, like concerns around security, are successfully overcome, the demand is greater. And more than that, the demand for additional services around the cloud is growing, too.
Over the last 18 months there’s been a transition by resellers, VARs and MSPs to move closer towards fully adopting cloud. And, to add to that, there’s been the general recognition, particularly by large licensing resellers, that in order to grow business and ensure success, there needs to be a stronger focus on the services around cloud.
The IT space is more crowded and competitive as a result; and how do VARs, vendors, and ISVs survive? How do you remain relevant in the market? By adding cloud to your product portfolio. Sounds simple enough. But is it really?
The aim of the channel is to add value. Traditionally this was done by staying on top of technology, understanding how they could benefit your customers, and then educating your customers about these advancements.
This same approach can be applied to cloud, except that it is now a learning curve for both your business and your customer. The shift to sell cloud incorporates so much more than merely adding it to your set of solutions.
Consider ISVs as an example — the move away from selling a physical product to selling a solution has been a significant transition for these businesses. In addition to better serving their existing customers, SaaS enablement gives them the opportunity to seek out new markets and grow their recurring revenue streams. While some have made the journey successfully and continue to evolve, many are finding that the move to cloud is more difficult than first anticipated. Firstly it requires an organisation-wide attitude change, affecting everything from sales cycles and training, to remuneration models and marketing campaigns.
As a business, you need to understand how the cloud affects your own organisation before you can fully comprehend how it will benefit your customers (and potential customers). And it is here that a partner, a cloud services provider, can play a part.
The role of the cloud services provider
There is little doubt that the opportunities in the cloud market are substantial, and successfully reaping that potential may mean working with a partner. Microsoft, for example, recently announced, at its partner conference in Toronto, that is had invested $220m (£164m) in the UK channel last year. This included $23m for marketing, $2m on training, and $6m on partner tools and programmes.
But it’s not just the likes of public cloud giants that should be considered. Instead, cloud partners of all sizes can help you bring benefit. Due to the popularity and demand for the services associated with cloud, the actual role of the cloud service provider has become more consultative. Adding these services on top of infrastructure offerings can help you differentiate yourself in a highly competitive and, let’s face it, clustered marketplace.
Service providers have the experience in the market, the technology expertise and the understanding required to help you add that value for your customers. There is also an element of brokering here — customers rarely buy all services from the same supplier, so there’s a need for skills to manage that estate and ensure a certain level of integration between them. This is not something that you’ll have the resource or knowledge to do yourself for your end customers.
The shift to selling cloud has tremendous benefits for your business. It’s important that your business, from your sales team to your marketing department, is making this change and understands what is needed. The benefits of cloud are widely known — flexibility, agility and cost savings — but in real terms, cloud can help your customers reduce their time to market, improve service levels and deploy solutions from anywhere. But, as a channel partner, education plays a crucial part, including for your own organisation, as well as what’s expected from your cloud service provider. You need to understand what your service providers can offer, how their solutions can help your customers, and how working closely with them will only complement your customer relationships. In such a highly competitive marketplace, you need a differentiator, which will come about in the way you work with your cloud partner — from design and delivery, all the way through to sales and marketing.