Channel Helps Customers Make Their Move to the Cloud
Using a mix of on-premise and cloud deployments, channel companies are making the transition to the cloud to help their end customers capitalize on its benefits such as reducing both costs and IT complexity.
As many enterprises opt for this mixed approach, partly because of concerns about cloud security and integration, cloud providers are beginning to realize that they need to tap the services and integration skills of managed services providers and value-added-resellers.
"IT VARs are much more aligned to IT; they understand the applications and they have the services and integration skills," said Jim Livingston, vice president of North American services for Arrow's Enterprise Computing Solutions business.
Enterprises are shifting their IT spending to more "as-a-service-based" consumption, or cloud services, to augment their traditional IT infrastructure on-premise in areas such as replication services, back-up services and storage, said Livingston.
"What's interesting about this fundamental shift is that our traditional channel partners are poised most effectively in terms of their alignment to IT and their skills and capabilities around services, including integration capability, assessment of applications and security," said Livingston. "They are the ones with the services, skills and knowledge to architect and design the solution and help get it implemented on behalf of their end-user customers."
Significant growth rates for global public and private IT cloud services spending are translating into big opportunities for managed service providers (MSPs), value-added resellers (VARs) and IT distributors.
Worldwide spending for public IT cloud services is projected to reach $47.4 billion in 2013 and exceed $107 billion in 2017, delivering a compound annual growth rate of nearly 24 percent, according to IDC. Growth rates are even higher for worldwide spending on hosted private cloud (HPC) services. IDC expects HPC service spending to reach more than $24 billion in 2016, with a CAGR rate of more than 50 percent from 2012 to 2016.
A recent report from CompTIA reveals that approximately half of channel firms polled see faster revenue gains and larger profits from cloud offerings, compared with traditional on-premise technology. Yet less than half of channel firms with cloud offerings described their cloud business as completely mature, which the study defines as "an established, strategic part of business plans."
The CompTIA study found that the main reasons to recommend cloud of on-premise solutions included customer desire to reduce complexity, increase mobile/remote access to company data, cut costs and add new features/services faster.
However, the CompTIA report stated, "Although adoption rates are high and market numbers are positive, there is still confusion related to cloud computing."
Many enterprises have questions about the what, where, when and how aspects of applying cloud to their business. This is where the channel can play a strong role, said Paul Edwards, director, infrastructure channels at IDC.
Traditional infrastructure partners and service providers are in a good position to help their end customers move some of their workloads to the cloud because they have been deploying, managing and supporting the on-premise infrastructures for many of their clients.
"The role of the channel for end clients has always been important, but the rate of change is creating a more urgent need to get more help from partners who are skilled in these new deployment models," said Tim FitzGerald, vice president, Cloud Solutions, Avnet Technology Solutions, Americas. "There is a tremendous opportunity for channel partners that are increasing their skill and competency in some of these areas to increase their value to their end clients."
Channel partners are starting to build their cloud product portfolios and services with the help of vendors and IT distributors. Many traditional infrastructure hardware and software vendors have been making a big push to get their partners to resell their cloud services.
Edwards believes that "no end customer is going to be 100 percent cloud. There is going to be a lot of mix and match going from on-premise to cloud."
This is where IT distributors can play a big role in helping their channel partners meet this kind of transformational impact through many of their training and enablement services. Many channel partners have the expertise in security, integration and assessment services, but they haven't yet developed a full catalog of capabilities around cloud , said distributors.
Major IT distributors, including Arrow and Avnet, have taken the lead by offering training, enablement and new service capabilities for the cloud.
Arrow has developed a cloud services program to help its channel partners solve some of these challenges. Centered on demand, enablement, branding and growth, the ArrowSphere cloud service brokerage and aggregation platform delivers a suite of services to help its provider partners build and sell cloud offerings.
Avnet also has been bolstering its cloud service capabilities, both organically and through acquisitions to help its partner community become more valuable to their end customers. The distributor has been actively acquiring service capabilities across system integration including application integration, security management and governance.
Gina Roos, a Channel Insider contributing writer, specializes in technology and the channel.