Channeling New Cloud Opportunities
Channel companies must accept that the cloud fundamentally disrupts their traditional business models. They must recognize that meeting their customers' rising expectations requires transforming their go-to-market strategies and services. It changes the skills required, the sales tactics, the value propositions and service delivery methodologies.
11/09/12 5:00 AM PT
THINKstrategies, the Cloud Computing Showplace, and Rising Tide Media hosted our second annual Cloud Channel Summit earlier this week, giving executives from leading cloud and channel companies a peer-to-peer networking forum where they could share perspectives on how to forge successful partnerships to capitalize on the unprecedented opportunities created by the cloud.
This year's event attracted more speakers, sponsors, partners and attendees than our first event. More importantly, it brought together a greater mix of channel company executives to interact with those from various cloud companies.
Cloud company executives were the primary participants in our first Summit a year ago. They talked about what it would take to gain the trust and participation of existing and emerging channel partners to extend the reach of cloud services into new market segments. However, there was just a handful of channel company executives at the event because the vast majority of channel companies were not ready to respond to the growing interest in cloud alternatives.
At our second Cloud Channel Summit, held on Monday, a larger contingent of executives from a wide array of channel companies were on stage and in the audience. They shared information and insights about their rapidly evolving initiatives to respond to the rising demand for cloud solutions from customers of all sizes and across nearly every industry.
The Summit attracted executives from major distributors and resellers like Avnet, Ingram-Micro, Insight and Tech Data, as well as IT firms, cloud consultancies and managed service providers (MSPs) such as All Covered, Centerbeam, Cloud Sherpas and Spiceworks. Hosting and other service providers such as Comcast, Savvis and Rackspace also spoke.
What did they all have to say?
Although their cloud initiatives are still embryonic, all of the executives who participated in the Summit agreed that the channel must become more actively involved in the cloud movement for it to sustain its current growth rate and expand into new geographic and vertical markets.
The channel plays a critical role in educating customers, designing and delivering specialized solutions to meet their unique needs, and responding to their day-to-day support requirements.
Disruption and Transformation
However, the established channel companies are contending with the same challenges faced by legacy hardware and software vendors before them.
First, they must accept that the cloud fundamentally disrupts their traditional business models and be willing to take actions that will significantly change their current operations.
Second, they must recognize that meeting their customers' rising expectations requires transforming their go-to-market strategies and services. It changes the skills required, the sales tactics, the value propositions and service delivery methodologies. These changes will inevitably lead to structural and staffing shifts.
Third, migrating to cloud services will impact their financials, converting product revenues into subscription service fees that place greater economic pressure on the way channel companies operate.
Despite these significant challenges, the channel companies that participated in the second annual Cloud Channel Summit were proud of their progress and happy to share their experiences and success stories. They were also committed to making further investments into converting their operations to become more efficient and effective cloud service providers going forward.