Channel Looks to the Cloud as Microsoft Courts SMB Partners

A report from research firm AMI-Partners found the rapid growth of
cloud computing is making it much easier for small to medium-size
business channel partners to provide a broader range of offerings on a
24/7 basis at a lower cost and with fewer IT staff, including services
such as SaaS and managed IT services. The report predicted that as a
result, SMB channel partners could lose more than 200,000 IT jobs over
the next decade.

According to AMI-Partners’ Cloud Computing Research studies, SMB
channel partners will play a critical role in bringing cloud-based
services to SMBs in the early years. However, as large companies scale
up cloud-based offerings in coming years, they will make greater use of
automation, reducing the need for IT staff employed by local channel
partners, who have traditionally dominated SMB market spending, leading
to significant attrition and consolidation in the industry.

While the channel partners will need additional sales and account
management personnel to grow their business, the report predicted
reduction in IT staff would “far outweigh” growth in other jobs. As a
result, AMI expects a net reduction of 200,000 – 250,000 jobs over the
next decade, out of the over 1.3 million people currently employed by
U.S. SMB channel partners.

“The great recession of the last year and a half has significantly
increased SMBs’ interest in adopting various cloud-based services as
they look for ways to meet their IT needs while keeping costs under
control,” says Anil Miglani, senior vice president of IT infrastructure
research at AMI-Partners. “However, cloud computing cuts two ways for
small SMB channel partners. It allows them to offer new kinds of
services and solutions to their SMB customers without having to incur
high initial capital expenditures. But automated service delivery via
the cloud will also reduce the need for internal IT staff.”

The report comes as Microsoft announced
a program to reach out to SMB channel partners operating in cloud
computing. ChannelWeb reported the new division, headed by ten-year
Microsoft veteran Cindy Bates, would enable the company to better
compete against companies such as Google. According to an internal memo
obtained by ChannelWeb, the division is intended to attract the
thousands of SMB solution providers that are "shaping up to be a very
competitive battleground" and ensure a "foundation for cloud and
annuity penetration."