In the Cloud, Business Models Make the Difference

As I sat in the Industry Panel discussion – the first big general session at Breakaway 2010 – I heard two discussions: the evolving implementation of technology solutions as hybrid clouds and the need for solution providers to devise and implement better structured businesses.

The analyst panelists were in near universal agreement that technology is progressively moving toward cloud services, but debated the extent to which and when the cloud will consume all of traditional IT products. Ryan Morris, the principal consultant at Morris Management Partners, said it best, “The more we say cloud, the more we mean hybrid. The channel doesn’t become less important, but more important.”

In addition to Morris, the panel included channel analysts and observers Darren Bibby, program director for software channel research at IDC; Rauline Ochs, senior vice president and general manager at Everything Channel’s IPED; Chad Thompson, vice president of market strategy at AMI Partners; and Beth Vanni, director of market intelligence at Amazon Consulting.

While the conversation masterfully orchestrated by CompTIA’s research director Carolyn April touched on the technologies driving sales – and topping the list was cloud computing. But what will make the difference in cloud computing sales and channel success for solution providers? Time and again, the panelists kept returning to the organization, business plan and execution.

As I sat there among the hundreds of solution providers, I could sense a general recognition that the channel is going through a transformative period. Vanni and Ochs noted the business of product sales isn’t going away anytime soon, but conventional hardware and software products are increasing being sold with services. Call those services “the cloud” or whatever, they are increasingly bundled as recurring subscriptions and licensing packages.

Will the cloud subsume the old world of products and break/fix services? Perhaps. But transformation isn’t going to happen for another decade or more, the panelists said. During that evolutionary period, they agreed business consumers of IT goods and services would continue buying and deploying technologies that straddle on-premise and cloud implementations -- or hybrid solutions.

Bibby aptly stated that the challenge facing solution providers is transforming their businesses to become ambassadors of services. Ochs went a step further by stating that solution provider cannot afford to give up their position as “trusted advisors” to their customers. And Morris talked incisively about the need to capitalize on resources to take advantage of the services evolution.

Surviving and thriving in the next generation of the channel, the panelists concurred, required solid business planning, development and execution of business models, self-sufficient marketing, organic sales capacity and brand identity (or the cultivation of a brand around solution providers business). What rings true from a session such as the industry panel is that servers could just as easily be replaced with laundry or cars. It’s not about the technology delivered  as a service, but rather how the service is delivered by the provider.