Changing Channels


Changing Channels

By Erik Linask, Group Editorial Director  |  May 17, 2013

While meeting with a number of vendors recently at the Channel Partners event in Las Vegas, it quickly became evident that one topic outweighed all others in terms of conversation density – the cloud. 

For some time, there has been debate over exactly how to define “The Cloud.” There’s This-as-a-Service, That-as-a-Service, Something-Else-as-a-Service, Can-We-Deliver-This-as-a-Service? Each has a different purpose and is actually more different than similar – the similarity is they are all delivered from somewhere else (a.k.a., the cloud).

“The question used to be, ‘What is cloud?’ but that has evolved into, ‘How can it help me? What can I do with it?” explains Paul Hoffman, senior director, Cloud & Technology Solutions, at Ingram Micro (News - Alert).

Indeed, it’s critical to ask the right questions and, now that the market is asking the right questions about cloud, that model is becoming a significant opportunity for providers of various types, and it will help increase effective cloud adoption – as opposed to a cloud buffet model where companies try as many different services as they can, throw some away, and go back for more from others. In many ways, it’s not unlike the UC phenomenon – as soon as everyone (the media world included) stopped trying to achieve a common definition for UC, looking instead at the business benefits, adoption started to increase.

The cloud market has now reached a point where businesses understand they need to have a cloud strategy in place – they just aren’t sure what it should be, so they are approaching their VARs and integrators to help them decide. What it means is vendors have to understand not only the cloud, but also become intimately familiar with their customers’ businesses, in order to be able to appropriately guide them on a path to success.

For the reseller community, this presents an opportunity to build a recurring revenue stream by adding cloud services to their existing offers. For telecom VARs, it’s an easy change but, for IT VARs, it is much more of a struggle, as they have built their businesses on an initial up-front cost model and have to adapt to a recurring model, including getting reps to understand it’s long-term positive impact on their paychecks.

If that happens, cloud can become a great equalizer that allows the entire channel community to build upon it and compete on service quality – as it should be. So far, Ingram Micro has increased its cloud capabilities, now offering somewhere in the neighborhood of 150 products from more than 50 vendors. The secret, though, is understanding how to combine them into an integrated offering.

“It’s about elevating the conversation,” says Hoffman. “It’s not about one thing/service; it’s about combining and integrating and creating more stickiness.”

Cbeyond’s (News - Alert) Zane Long agrees that bundled offerings are the way to succeed in a cloud marketplace. Cbeyond, in fact, has combined its cloud services with its fiber offering, creating a “buy the cloud, get the bandwidth” deal, which has met with positive feedback from channel partners, who see tremendous value in the integrated services approach. For Cbeyond, it is also now able to differentiate its offers from both its cloud-only competitors and its bandwidth-only competitors, theoretically driving its market share up.

Long says, though, much in agreement with Hoffman (News - Alert), the competition is really in the channel manager mindshare market, who is suddenly faced with a more complicated sales process than previously, which is why he adds that the channel program must be simple and easy to understand, if you expect partners to buy in.

The fact is that the SMB market as a whole is struggling to wrap its arms around the new world of IT and BYOD, distracting it from its customers and their needs. Cloud is their opportunity to divest themselves of much of the IT challenge and reinvest efforts on their core businesses – likely even increasing operational efficiency in the process.

Earthlink (News - Alert) Business is singing a similar tune, looking to become more involved in its customers’ challenges and developing products address their pain points. It originally acquired its TechCare business to support its own operations, but because of its high quality hands-on approach, quickly realized its value as a managed service. Earthlink’s J.R. Cook agrees that partners often face challenges with the volume of services available today, but notes: “It’s our motto to teach them and give them the support they need. We want to create a one-stop shop for the virtualized business.”

There’s no doubt the channel is changing and moving to the cloud. The question is which vendors are willing to spend the extra time developing a comprehensive new cloud program with its partners to ensure success. Those that don’t will find themselves thinking (as Jimmy Buffett sings in “Changing Channels”), “Strange how they all behave like it’s another world.”

Edited by Stefania Viscusi
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