Cloud Computing Driving Revenue Growth: CompTIA Report

By Nathan Eddy  |  Print this article Print

The study suggests that much work needs to be done within the channel as the evolution of cloud computing accelerates.

Cloud computing is generating significant revenue streams for IT channel companies, which plan to boost their cloud investments in the next year, according to research from CompTIA, a nonprofit trade association for the IT industry. Among IT channel companies offering cloud computing solutions, 46 percent report deriving 50 percent or more of their annual revenue from cloud-related products and services in the last 12 months, according to the survey. The large majority of these companies (85 percent) expect cloud sales to grow in the next 12 months.

"This clearly underscores the momentum cloud is having on the marketplace and the variety of opportunity avenues available to the channel," said Carolyn April, director of industry analysis for CompTIA. April noted nearly half of the channel firms surveyed for CompTIA’s Second Annual Trends in Cloud Computing study plan to bump their investment in cloud business by between 10 and 15 percent in the next 12 months. Last year, less than a third said they were upping their investment to that degree.

Current revenue-generating cloud solutions for channel companies include the "low-hanging fruit" of cloud-based email, storage, backup and recovery, and business productivity applications. These solutions are in high demand among customers, but are relatively simple for channel companies to deliver, the study found. Nearly six in 10 channel companies with $20 million or more in annual revenue reaped revenue from mobile application development as a result of their cloud-based sales.

Despite describing themselves as having "light involvement" with cloud, nearly four in 10 said they made money from cloud integration work in the last 12 months, and eight in 10 value-added resellers (VARs) reaped post-sale integration work from the cloud last year. More sophisticated services, such as collaboration and analytics, are also on the horizon for cloud solution providers, according to April. "These are lucrative opportunity areas that generate significant integration work between internal and cloud-based systems and applications and other clouds," she said.

Despite what appears to be a more trusting attitude from customers toward putting sensitive applications and data into the cloud, six in 10 channel companies report security concerns are the main roadblock to a cloud sale, consistent among customers of all sizes. "In all likelihood, the security concerns are a function of cloud’s relative immaturity, and that as adoption increases and more demonstrable examples of cloud implementations come to bear, the apprehension over security issues will lessen," April said.

The CompTIA study also suggests that much foundational work needs to be done within the IT channel as the evolution of cloud computing accelerates. Roughly one in five channel firms said they have either a partial roadmap or no roadmap for their cloud business plans. Channel companies also face a number of challenges—primarily business-related—as they shift more of their focus to cloud. "For these firms, the next part of the process will be determining the role they will play in the cloud evolution and how they will implement steps needed to make the transition and deal with obstacles," said April.