The Cloud: Distribution`s PerspectiveBy Lawrence Walsh | Posted 2010-05-05 Email Print
Cloud computing is changing the way individuals and businesses consume technology. Consequently, the cloud is forcing distributors to evolve their traditional “pick, box and ship” model to support VARs in delivering services and maintain their value proposition to vendors. Here’s what four distribution CEOs had to say about their role in cloud computing.
What is the role of distribution in the cloud world?
That’s the question I posed to several distribution CEOs attending this week’s meeting of the Global Distribution Technology Council in New York. Not surprising, each of these chief executives has a different view of their role in the cloud, and their views are reflective of their current penetration and state of cloud computing support.
Here’s a sampling of what four distribution CEOs had to say about the cloud computing.
Robert Dutkowsky, CEO, Tech Data
In today’s IT world, the bulk of computing power is concentrated in the data center, which is sandwiched between two competing layers—consumer (user-level) electronics and "the cloud." While conventional wisdom holds that power will shift from the data center to the cloud, Dutkowsky believes user devices will be the source of IT innovation and drive the rest of the infrastructure equation.
If you consider iPads, Android phones and netbooks endpoints for cloud access, the notion makes sense. Dutkowsky extends the theory by saying that endpoint devices' influence is growing on IT infrastructure and cloud services, since users are evolving from having a choice of what device they use to bringing their device to the workspace. As that happens, they will drive the types of applications and size of pipes needed to deliver cloud services.
So what role does distribution play in that cloud world? Dutkowsky sees distribution—and specifically Tech Data—as an enabler of cloud services by providing vendors with the coverage they need to reach the marketplace and VARs with the support they need in delivering value-add services. In other words, the role isn’t changing dramatically from the current distribution model.
"I don’t see the fundamentals changing rapidly from today," he said to me. "Cloud computing is just a sea change that’s going to happen in and around IT, and distribution may provide the business services behind cloud and services."
What he means by that is rather than providing the hosted infrastructure or the applications for delivering cloud computing, distribution could be the back office for VARs—providing the billing, technical support, financing and training that make cloud computing as a channel offering possible.
Roy Vallee, Chairman and CEO, Avnet
When it comes to cloud computing, Roy Vallee is a bit more pragmatic and reserved than his peers. His current estimation of cloud computing is that it’s immature and evolving, albeit rapidly. As for that reason, he tells me that it’s too soon to tell what shape, form and function distribution and the channel will play in the cloud world.
"It’s still early, and oftentimes things don’t manifest themselves the way that people anticipate," he said.
Prophetic, perhaps. But that doesn’t mean that Avnet is sitting idly by. Avnet this week launched "Cloud Ready," a program designed to inform and educate resellers about cloud computing services, operating requirements and opportunities. "Our role is to demystify and create programs to enable cloud services," he says.
Avnet is looking at the cloud from a "value" versus volume perspective, meaning that it sees opportunity for the channel in complex cloud services that require integration and customization. It’s not an unfounded notion; several vendors are already pushing simplified cloud services direct because there’s little need for an intermediary. Avnet’s position is that the channel’s traditional role of "value-add" will persist through the cloud era. Where distribution helps with that is providing the support services that allow VARs and MSPs to focus on cloud delivery.
"Cloud computing is still foggy, but the opportunity around services dwarfs the opportunity around cloud products—perhaps by 80/20 or 70/30," Vallee says.
Kevin Muari, President and CEO, Synnex
Synnex is one of the more active distributors in cloud and managed services, but Kevin Muari doesn’t believe the mystery of success in cloud computing has been solved. "Anyone who says they know what they’re doing in cloud computing really doesn’t understand the cloud," he says.
It’s that perspective that compels Muari to qualify Synnex’s cloud position as "a vision that’s evolving." Today, Synnex supports several cloud initiatives, including its PrintSolv service in managed print services. It’s currently building up capacity for hosting and supporting cloud programs and applications, and recently launched a cloud portal with SSO and activity monitoring capabilities to support VARs selling cloud services. And Mauri foresees a day when Synnex will act as an aggregator and integrator of cloud applications that VARs will sell to end users.
Now, here’s where Muari’s perspective gets interesting: distributors acting as a catalog clearinghouse of platform-agnostic applications. In other words, a cloud store similar to what Apple does with its App Store.
"At some point in time, applications are not going to be tied to a platform. At some point, they will be a third-party provider of applications that run on any platform," he says.
In Muari’s vision, VARs could conceivably sign into their Synnex online account, peruse through a vast catalog of agnostic business applications, and provision those apps for resale to their accounts.
Greg Spierkel, CEO, Ingram Micro
Ingram Micro, the world’s largest IT distributor, was one of the first distributors to jump into cloud computing and managed services with the founding of its Seismic division that offers hosted and managed services tools and applications. Today, Seismic is partner with 18 software and managed service tool companies to deliver cloud-based apps to end users through VARs and MSPs. By the end of this year, CEO Greg Spierkel expects the number of applications to double.
Does Ingram Micro have answers to all the cloud’s mysteries? Spierkel, like other distributors, says his company is feeling its way through the cloud, providing infrastructure and application expertise, as well as the support services that VARs need. But it’s also learning from its experiences in building and developing Seismic and other cloud initiatives.
"We’re committed to the cloud, and that’s why we’re getting a bloody nose early on," he says.
A critical role that Ingram and distribution play in the cloud computing equation is creating a point of critical mass where vendors and VARs can interact on developing and refining cloud applications. Recently, Microsoft signed up with Seismic for the delivery of BPOS applications through the channel. It’s a perfect example of that aggregation of mass Spierkel speaks of.
Every vendor needs market coverage, especially in reaching small and midmarket businesses. Spierkel says Microsoft is working with Ingram to reach a large number of resellers that will take its BPOS services to market. Simultaneously, Ingram is providing VARs safety in numbers; a distributor the size of Ingram will get more attention from Microsoft than any individual reseller.
"No one reseller is going to get mindshare from Microsoft or Symantec. [VARs] need support, and that’s one of the offerings we bring," Spierkel says.
The one common theme that each of the distribution executives share in cloud computing is that they remain relevant in the IT sales ecosystem, since vendors will always need the channel for market coverage and VARs will need a source point for applications and support. In some ways, they each said, in different ways, that the old "pick, box and ship" model of distribution won’t change, but rather evolve to the virtual cloud world.
LAWRENCE M. WALSH is a vice president and market expert specializing in security and channels at Ziff Davis Enterprise. His blog, Secure Channel, follows security technologies, vendors and trends in the channel. You can reach him at firstname.lastname@example.org; and follow him on Facebook and Twitter.