Comcast: Does the Cloud Threaten the Channel?

Craig SchlagbaumBy Craig Schlagbaum

Recently, management consulting firm McKinsey & Company made some very compelling statements based on research it has done regarding the impact of cloud computing on the channel. 

They said that the move toward cloud computing will force the small to medium-sized business channel to either quickly change its model or die while in the process of trying to do so.” This speaks volumes about the future of our industry and the role VARs will play in it, assuming they make the changes necessary. 

In fact, weve been talking about this need for imminent change for a few months now. And we see it happening every day. Just this month, several of our Comcast Business Solutions Providers have held national VAR recruitment events where hundreds of VARs have turned out. They were seeking ways to partner and to bring the best solutions to their customers and also to add recurring revenue network communications services to the roster of offerings that they provide to their customers.

According to Kara Sprague, a principal with McKinsey & Company, “Hardware OEMs are increasingly turning to service partners to access the customers, at the same time that independent software vendors are using the SaaS model to go to the customer directly. This is bad news for VARs, integrators and distributors, many of whom are trying to either become cloud service providers themselves or move into a cloud brokerage model.”

Between the research that McKinsey is sharing and the massive recruitment efforts I am seeing firsthand, I believe we are experiencing a time in the channel like weve never seen. The implications of the cloud, the adoption of SaaS software and the rapidly-changing customer buying behavior creates an opportunity for aggressive and savvy companies in the channel to build a new future and for the traditional telecommunications channel of the past to remake itself. The channel will become a growing part of the total sales driven by the LEC and cable community of service providers as a result of these changes.

So, on the question of, Does the cloud really threaten the channel?” my take is: Only if youre not ready. 

Craig Schlagbaum is the vice president of indirect channel sales for

Comcast Business Class

. In this role, he manages Comcast’s indirect channel partner team and the overall indirect channel programs for business services. Prior to Comcast, Schlagbaum managed the indirect channel team for Level 3 Communications. He has spent more than 21 years in various indirect channel roles in sales, marketing and business development, and has been recognized as a top channel executive by Channel Partners magazine. He also is a member of

the 2012-13 Channel Partners Advisory Board.

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