Cloud Options Proliferate Across the Channel

By Michael Vizard

When it comes to cloud computing, solution providers have no shortage of options. They can either opt to build their own cloud to provide services to customers or resell any number of other cloud services. The challenge is figuring out the right mix of all those options.

For instance, a solution provider can opt to resell some of the more popular cloud services, such as Amazon Web Services. In that scenario, the solution provider essentially becomes the face of that cloud service to the end customer. That's not a bad approach because Amazon has shown little interest in customer service. In fact, the whole Amazon business model is predicated on reducing the number of customer service inquiries it needs to handle.

On the other end of the scale, vendors such as Hewlett-Packard, IBM, Dell and Oracle now offer cloud services through the channel. They provide much more in the way of customer support and platforms specifically designed to meet the needs of enterprise customers.

In addition, they give partners the flexibility needed to move workloads between not only private and public cloud computing services, but also managed hosting scenarios as well.

HP, for example, just launched a series of extensions to its CloudBuilder program, which includes a number of managed services designed to make it easier to manage cloud computing environments. "We're giving partners a common set of tools and platforms that will all share a published API," said Dan Baigent, senior director of business development for HP Cloud Services.

IBM is also offering a full range of cloud computing services. "With us, partners can choose to assemble their own cloud, buy one in a box, run a virtual private cloud or put in a public cloud," said Rich Lechner, IBM vice president of cloud and services marketing. "In fact, we see customers using multiple instances of thoses options all the time."

In between the Amazons and Googles on one hand and the IBMs and HPs on the other, a raft of cloud service providers are promising channel partners a lot more in the way of individual attention.

For example, Morphlabs just launched mCloud Osmium, a public cloud service that includes an OpenStack-based management framework. According to Morphlabs CEO Winston Damarillo, the objective is to give solution providers access to a set of cloud resources that makes heavy use of solid-state drives (SSDs) to outperform Amazon and do so at a lower cost.

"Our operating cost per virtual machine is lower," said Damarillo. "The end result is, we can afford to give the partner 50 percent margins."

Beyond the technology, smaller cloud providers said the customer experience is better than anything a solution provider is going to get from a major vendor.

"We have a 100 percent channel model," said Joe Barnas, director of channels for dinCloud, a provider of desktop virtualization services in the cloud. "Not only are our payouts higher over the long term, but we've also given the solution provider a lot more flexibility, control and consistency."

Similarly, Stephen Pace, vice president of channels and worldwide sales for SingleHop—another cloud service provider that allows solutions providers to white label the SingleHop services under their own brand names—said that in the age of the cloud, customer touch still matters.

"The relationship still matters, especially in the SMB [small and midsize business] market," said Pace. "Solution providers need to be able to reach out to someone when there's a problem—no matter how automated the technology might be."

The challenge, said Jeff Uphues, vice president of business development for Cbeyond, another cloud service provider with a focus on the channel, is to find the provider that best helps the solution provider make the switch to a recurring revenue model based on delivering cloud services.

"We own all our own fiber," said Uphues."That means we can deliver a true end-to-end cloud environment, where the commission streams are two times anything Amazon offers."

In a world where cloud computing is rapidly becoming a commodity, it may be that whoever owns the relationship with the customer will matter most of all.

"It's definitely a fight, but it's too early to know who is going to win that fight," said Diane Krakora, CEO of PartnerPath, a channel consulting firm. "Right now, vendors are having a tough time differentiating services."

As a result, many channel partners will probably have to develop a full range of cloud services—some of which they will build themselves while others will be provided by partnering with cloud service providers to deliver specific applications or provide additional cloud-bursting capabilities on demand.

"A lot will come down to [which cloud providers] solution providers currently have an affinity to do business with today," said Raymond Boggs, vice president of SMB research for IDC. "Partners will lean one way or another, depending on what they need to accomplish. So, for right now at least, they should be placing bets on all the types of cloud services."

This article was originally published on 2013-03-05