The Peer-to-Peer blog is a forum for Channel Partners readers with the goal of stimulating discussion among partners about important issues impacting their business. The opinions expressed here are those of the authors and not necessarily those of Channel Partners editors or publishers. If you are interested in submitting a blog, please contact Managing Editor Buffy Naylor, firstname.lastname@example.org.
Tech Vendors and the Cloud: Education Before Implementation
By Stacy Desrosiers
In 2012, the cloud officially arrived, making its way through nearly every business publication as a top buzzword. But as with most buzzwords, not everyone knew exactly what the cloud does or what kind of value it really offers. Nevertheless, customers have been plaguing partners about their plans to incorporate the cloud into their offerings, leaving sales staff precariously caught between their vendors and their buyers.
However, according to recent Forrester surveys, nearly 50 percent of all North American and European enterprises will set aside budget for private cloud investments this year. Most firms recognize that the switch to software-as-a-service (Saas) offers opportunity. But just because everyone seems to be doing it, doesn’t mean all firms should blindly jump on board.
Yes, there can be real benefits from utilizing the cloud — think reduced infrastructure costs, potentially fewer IT staff and improved security — but in order to maximize outcome, firms must first consider if the cloud really does fit well with their business model. After all, the switch from traditional technology offerings to SaaS isn’t just about the technical side — it also means organizational and financial changes.
For instance, while a traditional customer contract may have been based on a six- or 12-month agreement, now customers have the benefit of pay-per-use. For both the vendor and their partners, this lack of a predictable income can pose a serious risk. And given that most companies switching to the cloud experience some technical difficulty at the beginning, a firm with limited financial vitality at the time of the switch may very likely hang itself.
What’s more, selling a SaaS is both more comprehensive and high touch. Not only are vendors responsible for operations, they’re responsible for seamless operations. Disturbances in services will not be well received and could actually invite some level of liability. According to a CompTIA study released earlier this year, this means new job descriptions for positions such as departmental liaisons, integration specialists and cloud architects.
While partners will be forced to sell more aggressively and consistently because of the lack of long-term contracts, they cannot and will not sustain income for a product that was poorly developed, is built in a cloud with limited availability or that has an insufficiently staffed data center. Consequently, vendors will also need to be set up to closely monitor usage of their cloud-based solutions. With the proliferation of new SaaS solutions that will be available in 2013, customers simply won’t stand for anything less.
So while firms from all industries may be itching to get on board with this brilliant new capability and beat out competitors, their best option is to take a step back and learn before acting. Moving to the cloud isn’t just a simple plunge — it’s bucking against a system that has been in place for decades.
Technology vendors need to educate themselves and seriously consider the implications to their business model, including its impact on partners, before committing resources. This isn’t meant to warn against the cloud as an alternative platform; it is meant to raise a red flag against rushed, haphazard integration. The cloud can be an extremely valuable resource, but only if it leveraged correctly.
Stacy Desrosiers is an accomplished channel expert with nearly 20 years success in engaging, enabling and marketing with VARs for technology companies. Her work with Channeltivity, stems from the belief that having a strong foundation will enable any organization to successfully manage and support their growing partner base. Through her years in the channel, she continues to drive customized programs enabling her partners to achieve the revenue they require in the ever-changing world of technology .