Cloud Solution Provider Paradox: Promise and Problems

By Michael Vizard  |  Print this article Print
cloud transformation

ANALYSIS: Although cloud solution providers have made clear strides, a key issue for companies in the channel is finding the best spots to add value.

Cloud Solution Provider Business Model

In many instances, moving to the cloud also means combining multiple products into a single offering. Cloud solution providers are taking the lead in this area.

Case in point is Intermedia, which recently launched a revamped version of its SecuriSync file synchronization and sharing service that includes backup and recovery software.

"It's a full integrated solution," said Bojan Dusevic, director of product management for Intermedia. "Everything is accessible via one control panel."

At the same time, solution providers would also do well to take note of new players entering the channel ecosystem via the cloud. GE Healthcare, for example, is signing up both systems integrators and independent software vendors (ISVs) to drive cloud programs aimed at specific vertical industry.

"We're looking for partners that can add value on top of our stack," said GE Healthcare's Software Chief Technology Officer Evren Eryurek. "This allows them to get into the health care vertical without having to make a heavy investment."

Yet, for all the opportunities cloud programs afford, the biggest challenge for traditional solution providers may wind up being cash flow, said Michael O'Neil, principal analyst for boutique research firm InsightaaS.

"A lot of partners, when selling an on-premise solution, collect revenue from the customer and pay the vendor off later. In the meantime, they operate off the cash flow," O'Neil said. "In the cloud, all that goes away."

For that reason, it is critical for solution providers to get their business models aligned with the cloud.

"It's easier for a newer company than it is for legacy VAR," said Aric Bandy, president of Agosto, a solution provider that specializes in cloud applications. "But the most important thing to remember is to just get going."

Michael Vizard has been covering IT issues in the enterprise for more than 25 years as an editor and columnist for publications such as InfoWorld, eWEEK, Baseline, CRN, ComputerWorld and Digital Review.