The Real Cloud Opportunity for VARsBy Dave Sobel | Posted 2010-08-16 Email Print
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There's plenty of angst among VARs about the move to cloud computing and where they will fit in. But the real opportunity goes beyond reselling cloud-based services.
The cloud buzz continues to cause some angst around the channel. The buzz is both unnerving yet strangely empowering.
An HTG colleague, Reed Wilson from Palmetto Technology, recently sent over some notes on a marketing pitch he saw for a cloud software provider in the healthcare space. The pitch boiled down to essentially: "You were never trained to use Facebook or Gmail and you’ll never need to be trained on our software. That’s the beauty of Cloud Computing."
Reed intelligently continues with some analysis. He notes that it sets a very unrealistic expectation for the buyer. Comparing practice management software to Gmail or Facebook is unrealistic. Does the cloud application handle complex workflows and work processes? There is certainly high value for solution providers in assisting with the process and work flow management within technology.
It does, Reed continues, sell. And customers are buying.
My own sales team has been fighting this problem too. The perception is that cloud computing is automatically cheaper than going with an on-premise solution. When we compare the on-premise with cloud solutions, they are often very similar.
The true promise of cloud computing is not "simplicity" or "cheap", but in a wiser way to spend IT dollars, giving higher reliability and lower administration costs. That doesn’t necessarily result in "simple" or cheap".
This discussion expanded when Mike Ritsema with i3 Business Solutions chimed in. He brought some facts to bear.
"IBM made 84 percent of their profit last year from services and software. They’ve acquired over 100 companies in these areas over the last 10 years. Seven percent of their profit came from hardware. They love the complication of integrating disparate technology."
Mike's list of ways companies integrate into the cloud was dead on:
- Web browsing
- RFP / RFI
- Blogs, Social Networking
Mike outlined a recent win, showing where he brought value to a small business. "I just sold a small business a deal: QuickBooks, Fishbowl Distribution Software, EZ Connector integration software, ASP DOT NET eCommerce, Authorize .NET Credit Card Processing, Cloud email, IBM Server, Cisco Firewall, implementation services, and Redundant internet access. We make money by bolting and holding this stuff together for the next decade. Services. Period. This solution is integrated to the cloud all over the place. It’s as complicated or more complicated than an on premise solution. I want more of this."
Mike has hit the cloud nail on the head here. By focusing on assembling these complex solutions, i3 adds significant value to the customer, and manages the complexity for the customer.
As cloud computing’s buzz continues to grow, we’ll see more and more confusion in the market place. We’ll be educating our customers more and more on what it means to use these services, as Reed describes. Once we do, there is significant opportunity, like what Mike discusses, to deliver value.
Dave Sobel is CEO of Evolve Technologies, a Maryland-based solution provider, and regular contributing columnist to Channel Insider.