Clouds Roll In, Vendors and VARs Adjust

By Jessica Davis  |  Print this article Print

IT solution providers are showing more comfort with the inevitability of cloud computing. But the unstoppable force is changing the market for VARs and vendors both.

What a difference a year makes. In last year’s CompTIA cloud survey – the first the organization ever did on cloud computing – 42 percent of channel companies said they were not involved in the cloud at all.

Perhaps some of that came from a misunderstanding about what the cloud was. Or perhaps there was some reticence over moving to a place where the revenues were lower, even if the profits were higher. But this year the numbers have shifted, and only 13 percent say they are not involved in the cloud at all.

Meanwhile a full 85 percent of channel companies said they were heavily to moderately involved in cloud computing this year, according to Carolyn April, director of industry analysis for CompTIA. April presented some of CompTIA’s most recent research results during a press conference at the CompTIA Breakaway conference in Washington, D.C., this week.

Channel partners are also expecting big changes to vendors' partner programs in the months and years ahead as cloud computing further disrupts the market.

"Vendors have raised the performance bar," April said. That means MDF funds are tougher to come by. You may have to prove that you have a marketing campaign. "You have to prove that not only will the program help your business, but will it also help your vendor’s business." The bar has been raised.

But even with the higher bar and tougher requirements now, partners are generally satisfied with their vendors’ partner programs, April said.

As for vendors, recent CompTIA research shows that they are looking for more than just fulfillment partners. Rather, they are looking for partners that are solution-oriented advisors. But vendors, too, acknowledge that today’s market presents challenges for the vendor-solution provider relationship. For instance, vendors acknowledge the channel conflict and challenges of today for solution providers, but they don’t have easy answers to these issues, April said.

And a new crop of competitors, telcos, are infringing on both vendor and solution provider markets.

To really create value solution providers are urged to specialized in a vertical market.

"The day of being simply a horizontal is over," April said. She pointed to one solution provider who is targeting solo healthcare and veterinary practitioners. These businesses are drowning in paper and file cabinets and are looking for someone to take over their IT operations. But to get ready, IT solution providers need to school up, said April. That means gaining an understanding of the regulations, the issues and the practices that these healthcare providers must follow.

Jessica Davis covers the channel for eWeek and Channel Insider. Her technology journalism career began well before anyone heard of the World Wide Web and has included stints at Infoworld, Electronic News/EDN, and the Philadelphia Business Journal. Her work has also appeared on CNN and Forbes.com. She has covered hardware, software and networking, as well as the business side of technology. She has won several journalism awards, including a national ASBPE award for best staff-written column, and was named Marketing Computers hardest working tech journalist on their inaugural list of top tech journalists. Jessica can be reached at jessica.davis@ziffdavisenterprise.com