Channel Reincarnates in the Age of the CloudBy Michael Vizard | Print
NEWS ANALYSIS: Executives with long histories in the channel are running most of the solution providers that focus mainly on the cloud.
There's clearly a lot of interest these days in solution providers that are "born of the cloud," but as is often the case in the channel, these solution providers are not being born as much as reincarnated.
Operating under new names, most of the solution providers that focus mainly on the cloud are actually run by executives with long histories in the channel.
Case in point is Enzu, a cloud solution provider led by a management that has a lot of experience providing hosting services. In this latest incarnation, Enzu CTO Nick Rose said it simply makes more financial sense to leverage all the cloud infrastructure that already exists in the world.
"We'd rather use all the platforms that are already out there as much as possible," Rose said. "It's really our job to focus on filling in the gaps for the customer."
Meanwhile, InterCloud Systems, a unit of VaultLogix, is actually a roll-up of several solution providers and a provider of data protection software. While the company is squarely focused on cloud opportunities, the reality of enterprise IT is that there is no such thing as pure cloud, said Konstantin Babenko, vice president of software development for InterCloud Systems.
"Total greenfield opportunities are very rare," said Babenko. "Most everything anyone does is a brown-field opportunity."
Other solution providers that now focus mainly on the cloud simply re-appropriated an existing brand. Exigo Group CEO Stephanie Martin said using the same corporate entity was simply easier than starting up another company from scratch. But unlike many other solution providers, she is not vexed with having to support multiple business models. In fact, if there is anything that Martin regrets, it's not making the transition faster.
"Knowing what I know now about how profitable the business model is I would have added a lot more vendors to our line card a lot sooner," Martin said. "You can run faster because you don't have to spend a lot of time getting certified to install technologies such as servers."
Arguably, what has fundamentally changed, however, is the amount of attention that vendors are willing to give cloud solution providers that they perceive are now better aligned with their own business models.
For example, CenturyLink, a provider of infrastructure-as-a-service (IaaS) offerings, is making a concerted effort to recruit channel partners that have developed a business model around the cloud.
"We're looking to work with lots of different types of partners," said Blake Wetzel, vice president of channel alliances for CenturyLink. "We're seeing a lot of different types of workflows involving everyone from agents to VARs."
In fact, Gerardo Dada, vice president of product marketing and strategy for SolarWinds Cloud, said the rise of the cloud service provider has led to something of a bifurcated approach to the channel. In the wake of acquiring Librato and Pingdom, SolarWinds is now specifically looking for partners that have expertise selling cloud management software, Dada said.
"We see this as being a different market than our traditional on-premise software," Dada said. "Right now, we see a different type of customer moving most of their workloads into the cloud."
SugarCRM co-founder and CTO Clint Oram even goes so far as to say that alignment on business models actually determines with whom SugarCRM will actually make an effort to partner. "It makes a big difference," Oram said. "We know that they will have the same focus on renewals as we do when they have the same business model."
Whatever the approach to the cloud, one thing that is certain is that the channel—in one form or another—is thriving. In fact, as cloud computing continues to evolve, it may very well be the solution providers that have the expertise needed to master the cloud that wind up being more profitable per engagement than the vendors that provide the core services on which more complex IT solutions get layered on top of to provide greater business value.
Michael Vizard has been covering IT issues in the enterprise for 25 years as an editor and columnist for publications such as InfoWorld, eWEEK, Baseline, CRN, ComputerWorld and Digital Review.