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Gartner to Partners: ‘Don’t Ignore Cloud’

By Khali Henderson
January 13, 2011 - News

Channel partners ignore cloud services at their own peril, said Tiffani Bova, vice president of research for Gartner Inc., in her keynote address Thursday at Q.Marketplace 2011, the annual meeting for indirect sales agents who are part of the Qwest Business Partner Program.

Gartner's Tiffani Bova“Whether you believe the cloud hype, whether you believe Gartner’s numbers or anyone else’s numbers about the percentage of customers who are embracing cloud, I hope you will agree with me that the numbers aren’t zero," Bova said. “If it’s 1 percent of $3.6 trillion [the projected worldwide IT spend in 2011], it’s a lot. If it’s 5, 10, 15, 25 percent – depending on what market you are talking about – it’s very significant. So just don’t ignore cloud like it’s not happening to you since you are not hearing it today. Trust me, it’s not zero."

In the near term, she said private cloud services will have the most traction, but primarily because the adoption is coming from the enterprise. In seven to eight years, Gartner predicts that a hybrid model – incorporating private and public cloud – will dominate the marketplace.

She noted that as channel partners increasingly begin selling to IT decision makers who are “digital natives," or people in their 20s that have had mobile devices their entire lives, resistance to cloud will lessen. They increasingly will view recommendations for on-premises solutions with incredulity, she predicted.

Bova said that there are a few potential models for channel partners offering cloud services. These include channel broker and channel aggregator, and are an evolution in the channel continuum beyond agent, VAR, solutions provider and MSP.

Much like an agent, a channel broker resells the services of cloud services providers. A cloud aggregator goes one step further and aggregates services from multiple providers and offers them together with common SLAs and billing. She said that one is not better than the other, but it’s a choice.

Bova said that it is difficult for channel partners to straddle several business models in the continuum because the sales requirements and the customer targets often don’t mesh. She said partners need to make decisions about what their model is and make plans to get there, which may include firing sales staff and customers. She also suggested that setting up a subsidiary with a separate P&L and staff can provide the needed focus to transition from one model to another or to maintain both simultaneously. Putting them under one roof is unlikely to work without a clear transition plan.

Bova recommended agents consider cloud opportunities around hosted communications, CRM and mobility.

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