The cloud computing market boomed during 2010 with more and more organisations adopting cloud services. As a cloud provider, customers are coming to us and our partners because they are fed up with the cost and pain of managing certain aspects of their IT infrastructure. They want more choice and flexibility around IT and cloud delivers on this. However, just as the channel is starting to realise the recurring revenue potential from providing these services, so too are the big vendors who are launching competing cloud computing services directly into the market.
This year has seen the likes of Microsoft update its BPOS offering with Office 365, a package including SharePoint, Lync, Exchange and Office 2010 which will be based wholly in the cloud. It's also introduced a private cloud solution based on its Hyper-V technology. Google is fighting for a space in the market too by pushing its business applications like Gmail, Google Docs, Google Calendar and Google Sites.
As the Microsofts and Googles of this world battle for supremacy in the cloud, the casualties could well be in the channel. After all they might be able to resell their services, but will the margin be sufficient and will their customers be protected? The big vendors may 'play nice' by trying to build relations with customers alongside the channel, but equally they could turn the table and try to take customers directly as they have been doing
With this in mind, the channel should take guard and stand up against the big vendors. While the IT giants create solutions, only the channel has the expert market and customer knowledge that allows them to be sold on. They are the ones holding years of experience with vendor-neutral platforms, expertise in vertical market applications and strong customer relationships to create far more compelling cloud offerings for customers. In addition, some of the household names simply don't have a track record in this model of service delivery. If they fail, or decide to pull out because in the long-term this model impacts other revenue areas, customers will be left hanging.
Consequently, there is very much a place for the channel in the new cloud computing era. Customers of all sizes need to have a broad cloud solution addressing all their IT requirements, which will be restricted by using a single vendor. The channel knows that it's better to pull together different technologies from different vendors to ensure it meets customers' needs. What resellers need though is a way to deliver end-to-end cloud based IT services, not just the raw ingredients and also manage the customer's billing and back office pieces to make it simple and profitable. With this, they'll be able to offer a reliable solution from the best vendors combining a mix of software, which can be managed effectively and provisioned centrally. By taking this approach resellers will have the strength and ammunition to fight back from the vendors' "friendly fire".
Most importantly, those looking to help customers move to private, public or even hybrid cloud infrastructures must ensure interoperability and flexibility are at the core of their offering. Otherwise the benefit of greater business agility that comes from adopting cloud will quickly fade. In order to compete with the big-name vendors, the channel needs to think about whom to partner with now, before their businesses are destroyed and others take over the fort for good.
This was first published in March 2011