By Barbara Spicek
The cloud industry is experiencing immense growth and is predicted to reach $107 billion in revenue by 2017. And, with customer adoption rising fast, vendors are tuning their game to develop the right mix of private, public and hybrid cloud solutions for their clientele.
As they target new revenue opportunities, channel partners often struggle to build the right business models and value propositions around the journey to the cloud. These challenges, common across the industry, include adjusting and aligning technical and human resources, developing corresponding support and managed service offerings, sales and compensation models, target verticals and product packaging.
Here are some key tips and considerations for channel partners to successfully create and deliver cloud services to their customers, and help avoid the cloud identify crisis.
Identify your ecosystem. Leveraging the right cloud ecosystem — usually a mix of vCloud, Amazon, OpenStack and Windows Azure — for the cloud infrastructure, developing a strong cloud consulting practice and bundling the right service offerings is paramount to success. Decisions like whether to invest in in-house hosting capacities as opposed to leveraging the vast and sometimes confusing ecosystem of service providers, or even deciding on the right hybrid mix, has become the most critical decision point for channel partners.
Be adaptable. The flexibility to align with new technologies, along with partners’ proximity to the customer, and their ability to recommend the most effective solution to align IT with business objectives is, and will always be, the key value proposition of the channel. Channel partners that learn and adapt will lead the charge in these disruptive times.
Show long-term value. Forcing a transition such as the restructuring and hiring of technical and sales professionals with the right expertise can be particularly challenging for channel partners. Demonstrating long-term value in a recurring revenue model is key to getting loyal sales executives on board with the new mode of doing business. And, it’s not insurmountable to provide the right compensation models and sales training, while demonstrating use cases along with business vision.
Promote your focused expertise. Channel partners have built their businesses on the trust of their customers. More often than not, a partner finds themselves with the particular expertise to service one vertical or type of customer over another. Channel partners should leverage this focused expertise when shaping their cloud product offerings. Wrapping the appropriate managed services (MS) strategy, from assessment to implementation and ongoing support, around cloud services offerings can prove to be not only profitable, but a huge differentiating factor for a partner. Channels that are not thinking about MS practices will be increasingly under pressure.
Look to SME market for new growth. SME markets are already reaping the benefits of cloud technology, such as faster time to market, operational efficiencies and the ability to transition capex to opex. These markets have traditionally only been served by the channel and represent one of the biggest opportunities for partners today and in the coming years.
Focus on differentiators. Recently, partner program requirements from vendors have shifted away from rebates and discounts to focus more on building essential elements of their partner program. This is important as vendors should be spending more time and effort on enabling differentiation based on the partner skillset and intellectual property, as well as guiding the transformation to the right business and sales model.
Despite these considerations, channel providers should not be expected to work alone to avert this cloud crisis. Software vendors play a role as well and can begin transforming the landscape by offering their specific cloud expertise to further educate, guide and provide leadership to their channel partners. A dedicated cloud innovation team can equip channel partners to build their own cloud blueprint – more personalized solutions, business models and go-to-market strategies – to reap the agility, flexibility, reliability, availability and ultimate cost savings that the cloud promises, while overcoming the cloud transformation challenges that hold so many partners back.
In her role as senior vice president of global system integrator and channel sales for ASG Software Solutions, Barbara Spicek is responsible for advancing ASG’s global routes to market expansion through recruitment of core system integrators, service providers, managed service partners and outsourcers worldwide. She heads the worldwide sales and marketing teams and carries responsibility for partner enablement and training, implementation of innovative programs and initiatives, as well as the expansion of professional service partnerships for ASG.