Cloud Computing’s Impact on the Channel
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IDC’s Chris Ilg, Director of Market Research, Infrastructure, Channels and Alliance discusses the impact the cloud will have on the channel moving forward.
Key points Chris makes during this video include the following:
- Resellers see private clouds as a great opportunity for value-added services and many are making the shift away from selling purely hardware as a result.
- Public Cloud Services providers are actively recruiting resellers as there is a land grab for market share right now.
- Professional Services is the greatest profit opportunity, with the reseller being the trusted advisor to move applications into the cloud and provide legacy system integration.
- Resellers need to move away from hardware and software margins now to stay financially viable; IDC surveys show a short runway to the move to services before a reseller shakeout begins.
- Converged architectures and convergent infrastructures are acting to disintermediate resellers in the short term according to IDC.
- Emerging opportunities for resellers today include unified communications and collaboration, mobile computing including tablets, security services and consulting, and digital signage.
- Distributors need to get beyond their traditional role of pick, pack, and ship operations and become knowledge leaders for the channel, delivering strategic services in the process. Providing guidance to resellers on how to make the transition to cloud services is critical.
- Vendor partner programs can be confusing and difficult to navigate. Distributors need to be the leaders on these programs, especially on certifications and specializations on behalf of resellers.
- Solutions Distributor is a term being used more and more as these businesses seek to differentiate from their traditional logistics and pick, pack and ship operations. Ingram Micro and Tech Data investing in advanced technologies divisions that set the foundation for services selling by resellers are cases in point. The goal of these divisions is to call at high levels in enterprises and sell services and programs that can scale across an entire business instead of just selling hardware or software.
- M&A activity is picking up in distribution to attain global reach and set the foundation for future Cloud Services selling.
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The advantage of cloud computing is the flexibility of price tag, without affecting the quality. E.g. earlier if we have to choose between good hardware at higher prices & inferior at lower prices. With cloud computing we just need to choose the space we require without affecting the quality of service. This will create a large market for IT infrastructure & also improves the efficiency.
I enjoyed these thoughts from Chris. I’ve referenced him a bit in a blog post I did on the impact of the cloud on professional services – http://wp.me/pZlIK-pg.
I’m interested in a smaller section of the channel than Chris – the solution provider serving large SMB and small enterprise markets. I think Chris’s comments about what will actually provide value in a world ruled by the cloud (consulting services rather than software sales) are key for that type of firm to understand how to adapt.