Planning for the Future: Consider the PossibilitiesBy Howard M. Cohen | Print
With the cloud replacing many server and storage sales, what can channel partners that are dependent on these hardware sales do to replace them?
Nobody has enough salespeople. While that may not be how you thought this article would begin, it may indicate the reason why many current channel players will continue to survive and even thrive.
At midyear, we are getting closer to the day when everyone will agree that standing up their own servers doesn't make financial sense when they can use cloud-based infrastructure-as-a-service (IaaS) at so much less cost—and with better service. In fact, more and more of the services that integrators formerly installed on customer premises are now being delivered more cost-effectively via the cloud. And everybody is starting to acknowledge that.
This leaves VARs, resellers, integrators and other channel companies with a choice: Will you become a provider of cloud services, or will you sell them, or both?
Ostensibly, this should be a fairly easy choice for most. If you have a large staff of technology service providers, you'll be able to focus more completely on what you can do for customers instead of what you can sell to them. If, on the other hand, you have a sales organization but very little or no tech services resources, you can expand what you have available to sell to customers. Put more simply, you can choose to be a provider or a seller, or both.
Becoming an Integrator of the Providers' Services
Should you choose to be a seller, you will be in great demand among the new service providers. None of them have enough salespeople to reach all available markets. They will need you to sell the services they provide to a far broader market.
You will have the opportunity to become an integrator of many of these services, creating further opportunities to sell many of the providers' services that you represent to each customer. Every line-of-business (LoB) application you sell—such as retail point-of-sale, document management and enterprise resource planning—will also require security services, data backup and much more. Success in cloud sales has always been enhanced by bundling multiple services together to increase monthly recurring revenue.
You will be integrating services, making sure the services you represent all work well together. You won't need much in the way of hands-on provisioning, management or other technology services. You just need to make sure that your providers will play well with each other.
Smart resellers will also seek out partners that can perform all the upfront consulting, preparatory, deployment, migration, training and ongoing support services that enable or augment all these cloud subscriptions.
The New Age of Service Providers
The definition of the managed service provider (MSP) has been lost due to overuse. Those who monitor networks, those who repair broken gear, even those who rent skilled individuals are examples of the many kinds of providers that refer to themselves as an MSP. As more of these IT service providers (ITSPs) diversify, we'll see a variety of types emerge.
We've already seen cloud service providers (CSPs), and some of them create and sell their own IaaS and other cloud services. Others sell the cloud services of larger providers.
The continuing meteoric growth of big data and analytics will drive the need for highly talented and highly paid data scientists. Rather than trying to staff this unique role themselves, many large corporations will turn to data service providers (DSPs) to manage, analyze and actualize the results of their data collection activities.
Independent software vendors (ISVs) have already become the premier partners of choice to many large platform providers. Those who formerly developed specific bespoke solutions for specific customers' requirements will find themselves creating their own intellectual property (IP) and turning it into new products. Each of them will need to develop their own micro-channel to broaden their sales platform sufficiently to sell these products at scale.
Of course, the internet of things (IoT) will create new servicing opportunities for those who will install and deploy the technologies needed to manage and optimize the performance of the billions of new things that will be deployed in our environment.
There will be other new types of service providers arriving in the channel that we may not have conceived of yet. The one thing they will all have in common is that they will all need each other to continue creating complete solutions.
We've seen partnerships succeed for many years in the channel. So we should anticipate that the new partnering in the age of the sales integrator and the many forms of ITSP will create a completely new ecosystem that affords great opportunity for all.
The key question is, "How will you transform your ITSP company?"