The ongoing march of technology leaves no business untouched. Over the last decade, a spattering of hosted and managed tools has exploded into a host of cloud computing solutions that touch everything from infrastructure to applications and email. “The cloud plays an important and growing role in business. It enables enormous performance improvements and cost savings. It represents a more efficient way to manage IT resources,” says Dave Seibert, CIO at Irvine, Calif.-based consulting and integration firm IT Innovators Inc.
For channel pros who have traditionally served as resellers and integrators, the cloud represents an entirely new frontier of business. Although most firms operating in the channel have some experience with clouds—particularly hosted infrastructure, email, and CRM—the technology introduces new challenges and different business and revenue models. As Paul Smith, partner at Walpole, Mass.-based Datasmith Network Solutions, explains: “The pie keeps getting smaller for traditional hardware and software. Channel pros are being forced to adapt and become more of an adviser and consultant.”
According to Gartner Inc., 50 percent of enterprises will use hybrid cloud services by 2017. The analyst firm also estimates that the public cloud services market grew by nearly 20 percent in 2013. Meanwhile, various studies show that infrastructure as a service (IaaS) has expanded at about a 40 percent annual clip over the last few years. “IT services providers … must consider these disproportionately large mature markets if they want to play a leading role in cloud services growth worldwide,” notes Ed Anderson, research director at Gartner.
So while it’s important to learn to navigate the cloud, the road to success is often paved with speed bumps, roadblocks, and detours. Success requires specialized knowledge and expertise, new partnerships, and a focus on providing ongoing services that deliver value. “Market dynamics are changing, and channel pros must change with the times,” says Prashant Rao, marketing manager at consulting and integration firm Computer Solutions East, of New Rochelle, N.Y.
Here’s a look at three leading channel companies and how they have built successful practices by incorporating cloud services into their product and services portfolio.
IT Innovators Takes a Clear View of Clouds
The way Seibert at IT Innovators sees it, cloud computing represents the next wave in IT. While many channel pros view the technology as a threat, he chooses to focus on the opportunities—and the reality that ignoring or minimizing cloud will not make the trend disappear. “Cloud services are everywhere. They’re easy to procure and, in many cases, they offer a richer experience. They also provide an attractive and cost-effective pricing model for clients. And, it’s relatively easy to onboard a client to cloud services,” he explains. “It’s a market that we decided we cannot ignore.”
Although Seibert’s firm has offered various managed and hosted services for more than a decade, it has made a concerted effort to focus on the cloud computing market over the last few years. “We adopted the position that the cloud is just another way to deliver information technology. We didn’t want to build a practice entirely based on the cloud, but we did need to embrace it and make it part of our offerings. We had to become a hybrid solutions provider.”
The company offers a variety of virtualization products and cloud services, including email, spam filtering, cybersecurity, infrastructure, and cloud backup services, along with disaster recovery. IT Innovators has forged numerous partnerships and strategic alliances with firms such as Dell, HP, Microsoft, Megapath, and Trend Micro. “For most channel firms,” Seibert says, “it’s best to start with basic services such as email, spam filtering, anti-virus, and website services, and as you gain expertise, take things to a higher level.” This includes unified communications, storage, and disaster recovery and business continuity. He says that his firm has focused on developing knowledge and experience—and wading in further as its internal expertise has grown.
That has also meant changing the questions executives ask when interviewing job candidates and looking for entirely different types of employees. “In the past, we would have asked if someone was familiar with Windows 7 or Windows 8 or troubleshooting PCs. Now we’re asking whether they know how to configure and install Office 365, manage disaster recovery in the cloud, or how to manage hosted DNS.” Finding the right person can prove challenging. “It’s a much smaller pool of engineers who have significant experience with cloud computing. So, it really requires both an internal and external focus on acquiring and developing talent and skills, including in areas such as digital security.”
Seibert says that a foray into the cloud translates into a need to build a new portfolio of strategic partners. “It changes the basic dynamics of the business because you’re no longer dealing with on-premises technology and solutions,” he explains. “You need to fully understand the features that service providers offer, along with service-level agreements and what expectations they have surrounding user experience. Some put a high emphasis on the quality of the end-user experience and others do not.” At the heart of the issue, Seibert adds, is that the cloud creates a substantially lower barrier to entry. “You really have to take the time to analyze and evaluate products, services, and pricing, and apply key performance indicators.”
Cutting through vendor marketing hype is key. “Every day there are new players and new possibilities,” Seibert explains. “Too many cloud vendors cannot do what they claim to do. They make promises they cannot keep.” Another problem? Tools and solutions may mean different things to different people. For example, “In one case, a vendor touted its ability to provide disaster recovery in the cloud. But when I asked, ‘If I have three servers and one dies, how do you handle that?’ they replied that they could put all three servers in the cloud. I had to point out that if only one server failed I don’t need to have all three servers in the cloud.”
In the end, Seibert views cloud computing as an opportunity to expand and grow the business. “It gives us more options and allows us to serve as a strategic partner for our clients,” he explains. “We can help SMBs with limited expertise and resources take things to a new level. We can help them map out a path to the future.”