Taking on Cloud: What’s Your First Step?

No doubt there exist many channel opportunities related to the cloud model, among them new sales and customer engagement scenarios as well as the chance to build recurring revenue streams. This is all good business. But the fast-moving shift to cloud is also profoundly disruptive and challenging. Ready or not, many of today’s solution providers find themselves re-evaluating how they conduct basic business operations, regardless of whether they are planning an all-cloud transition (for now, a rarity) or opting to add some cloud services to the current mix of product offerings and services (more likely).

Either scenario can work for channel companies, but that’s not true of a third approach: Ignoring cloud altogether. In spite of the fact that we aren’t going to see a 100% cloud world anytime soon, or frankly ever, firms that turn a blind eye to cloud today in many ways run more risk to their long-term survival than those firms that embrace some level of cloud and begin the business transformation that it entails.

Many are making the move. CompTIA’s recently released, 3^rd Annual Trends in Cloud Computing, finds that 7 in 10 channel companies are offering some type of cloud services.

Growth is forecast as well. Over the next 12 months, 42 percent of channel firms expect the cloud portion of their business to grow significantly, defined as by 15 percent or more. This compares with last year when just 24 percent of channel companies cited expectations for this level of growth.



As adoption rates continue to accelerate across the channel, more practical questions arise about how these companies are integrating cloud into what they do today, how they retrain staff, decide what cloud services or offerings to sell and how to adapt their business models. The CompTIA study finds that most companies are – not surprisingly -- starting out by selling a single, entry-level cloud offering, mainly infrastructure such as storage services or data back-up. These areas have been the low-hanging fruit for many channel firms adding a cloud practice. Other obvious first moves into this space include using public cloud platforms to perform custom application development projects for clients, as well as reselling a vendor’s cloud applications such as Google Apps, for example.

Moving beyond Step 1 in the cloud transition, channel firms are considering a raft of different revenue models. One of the more notable takeaways from the findings involves the number of channel companies that are offering aggregation/brokering services that span IaaS, PaaS and SaaS. On average a third of respondents counted these activities as part of their business model in the last 12 months. Close to 4 in 10 plan to add these services in the next year. Aggregation allows the channel company to act as a one-stop shop to customers seeking cloud solutions that might come from a variety of sources. Channel firms aggregate the offerings, build a “menu” for customers, and along the way earn services revenue by making recommendations in a consultative manner.

As for biggest surprises channel companies have encountered along the way, there was no real standout in the survey. But nearly 20 percent of respondents cited internal cost savings – or more likely, the level of savings – as an unexpected result in adding cloud to their portfolios.

For more details, CompTIA members can find the full report in the member resource center section of www.comptia.org.