Building clouds capable of delivering scalable, multitenant applications to scores of distributed customers is a daunting task even for large enterprises such as Microsoft and Google. But solution providers of all shapes and sizes are looking to the heavens to find their place in the clouds for the next generation of computing.

Cloud computing is the next wave for the technology marketplace. Depending on which analyst firm you listen to, cloud computing will be a $60 billion to $100 billion market within the next three years. Vendors that cut their chops on hardware and software—Microsoft, Cisco, Hewlett-Packard, Dell, IBM—are racing to claim their place in the clouds. And nontraditional companies such as Google, Amazon.com and Activision are finding second life as the facilitator of cloud-based services.

While the concept is nothing new—we called it Web services and grid computing following the dot-com bust and application service providers (ASPs) in the ‘90s—“the cloud” remains clouded (for lack of a better word) on where traditional solution and managed service providers fit in the new paradigm. The challenge of divining a place in the clouds is especially daunting for smaller solution providers that lack both the capital and resources to create their own cloud computing storm front.

Channel Insider and HTG Peer Groups partnered to study the cloud computing revolution in a collaboration we called “Project Nimbus.” Our goal was to “crowd-source” real-world intelligence and experiences of solution providers either involved or looking to get involved in cloud computing. The first effort of this collaboration was to tackle the tricky issue of due diligence.

While cloud computing is touted for its ability to reduce costs and increase efficiencies, the cloud has a high barrier to entry. The required investments in infrastructure, redundancy, staffing and market development are often too much to bear for smaller companies. This barrier to entry is giving rise to new partnership opportunities in delivering and selling the cloud. Project Nimbus identified seven different cloud computing partnership models that provide solution providers with a place in the cloud with varying degrees of investment.

Partnering provides a path to adoption and a place in the cloud, but not all partnerships and vendors are equal in the cloud. Understanding the nature of the partnership, how services are delivered, what the true market opportunity is and how you as the solution provider makes money off someone else’s services is critical.

The Project Nimbus team drafted a white paper, “Finding Your Silver Lining in Cloud Computing,” which includes a series of questions across eight categories that make up a baseline due diligence exercise. These categories are market position and value, vendor financial health, required investments and potential ROI, adoption requirements (organizational changes), vendor performance track record, customer relationships (protecting your customers), market awareness and marketing support, and legal liabilities and regulatory requirements.

The due diligence process outlined by Project Nimbus is intended to give solution providers directional guidance in evaluating and establishing cloud computing partnerships. The list of questions is far from complete, and will evolve over time. The answers to these questions will vary from engagement to engagement, and what’s right for one solution provider may be inappropriate for another. The important thing is that solution providers use this and similar due diligence processes to ensure that they enter the cloud partnerships with eyes wide open.

Channel Insider and HTG Peer Groups have committed to moving forward with new cloud computing studies through Project Nimbus. Treads of the group’s discussions and deliberations can be found on our Channel Cloud Computing blog.

Lawrence M. Walsh is vice president and group publisher of Channel Insider. Click here to read his blog, Secure Channel, for the latest insights on security technology and policy trends affecting solution providers. 

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