Cloud Driving Transformation for IT Distributors, CompTIA Study Shows
|Copyright 2014 by Virgo Publishing.|
|By: TC Doyle, T.C. Doyle|
|Posted on: 02/10/2014|
Cloud is driving transformation in IT distribution, according to a new study published this week by IT industry association CompTIA.
The study’s findings are significant for several reasons. For starters, they underscore how distributors have made important changes to embrace a technology phenomenon that was only recently assumed to be a significant challenge to their livelihood.
CompTIA’s study provides a more nuanced perspective. Here’s why:
When cloud technology first began to make inroads several years ago, companies such as Tech Data Corp., Ingram Micro Inc. and others were thought to be in the crosshairs of innovations that didn’t depend on traditional “pick, pack and ship" services. Think Salesforce.com, Amazon Web Services, Rackspace, Dropbox and others. But in recent years, IT distributors have rallied around cloud computing and now offer compelling services to help VARs, telecom agents, solution providers and consultants grow their cloud business portfolios.
How did they do it? By making strategic acquisitions, signing up new vendor partners and developing new revenue streams, according to CompTIA. Not that they necessarily wanted to, the study, “The Role of IT Distribution in a Cloud World," reveals. “Like anyone else transitioning from on premise to cloud services, you face cannibalizing your traditional business," said Jason Bystrak, sales director at Ingram Micro’s North American Services Division, in the research report. “Our original interest with cloud was to mitigate risk and not get disintermediated. But now we believe we can capitalize. We’ve gone from risk mitigation to opportunity."
Beginning late last year, CompTIA’s research team began asking VARs and vendors about the dynamics between distributors and their channel customers. In particular, it wanted to better understand what role distribution is expected to play in “facilitating cloud solutions and business models."
“The findings point pretty positively to a strengthening, symbiotic relationship in the years ahead, though challenges exist to bridge gaps in education and training as companies move to cloud, as well as to work out the new players on the competitive landscape," CompTIA concludes. “Also key is the relationship between vendors and distribution, and whether that dynamic remains stable or morphs in the wake of cloud and its enablement of different routes to market and customer touch."
To wit, half of the organizations that responded to the study predict the rise of cloud computing will have a positive effect on distributors, “enabling distributors to branch into new areas such as cloud services aggregation that will help channel firms in vetting and sourcing." In contrast, just 13 percent of respondents said they expect cloud computing to have a “mostly negative" effect on distributors.
The No. 1 thing channel companies want from distributors when it comes to cloud computing is technical support, followed cloud aggregation services, and then data center accessibility and hosting.
As encouraging as some of the findings are for distributors, not all of the news is positive for them. When survey respondents were asked what challenges distributors will face in the channel, nearly half said “overcoming the perception that distributors can be more than fulfillment/delivery intermediaries" (47 percent) and “convincing solution provider partners that they add value to cloud services offered by vendors" (46 percent).
These numbers surely would have been higher had it not been for the acquisitions distributors have made and the programs they have developed in recent years.