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Reinventing Channels in the Cloud

By Jeffrey M. Kaplan
Oct 14, 2011 5:00 AM PT

When people think of traditional channel companies in the tech industry, a wide array of distributors, systems integrators (SIs), or value-added resellers (VARs) usually comes to mind. While these players continue to have an important role in the cloud -- despite some dire predictions to the contrary -- a new form of cloud-enabled channel is also beginning to emerge.

Reinventing Channels in the Cloud

The traditional role of the channel has been to extend the reach of vendors into new geographic or vertical markets. The channel partner typically consisted of highly skilled technicians who could cater a generic product or meld together a set of products to meet the unique needs of a particular customer or industry.

Gartner has referred to a new generation of distributors, SIs and VARs as "cloud brokers" that can pull together various cloud offerings into a unified portfolio of on-demand solutions.

I'm seeing another set of channel players arise. These new players are specialized cloud vendors themselves whose highly targeted functional capabilities are becoming conduits for other cloud vendors to better deliver their on-demand services. In fact, in most cases these new cloud vendors are playing pivotal roles in the service delivery or customer deployment process.

Here are some specialized cloud companies that are addressing key concerns of many IT and business decision-makers, and opening a door for other cloud vendors to penetrate new customer accounts.

Security Concerns

The first issue is security, which SafeNet is addressing with a portfolio of authentication and encryption solutions. In the old world, these security capabilities were viewed primarily as defensive tools to fend off intruders and safeguard sensitive data from other threats. However, today's cloud-based authentication and encryption solutions come with more-robust reporting and analysis capabilities.

SafeNet can also validate the security of third-party vendors' software and services, making them more attractive to customers. This certification capability isn't new, but when it is combined with SafeNet's Sentinel software monetization solutions, third-party vendors can now enhance their product packaging, pricing and tracking capabilities, and push their solutions through SafeNet's ecosystem.

Companies like Okta and Ping Identity are taking the security concerns of IT and business decision-makers one step further by positioning their single sign-on (SSO) and identity management capabilities as an access mechanism into new customer accounts. In other words, become certified by these security companies and use them as a channel to market into more customer accounts.

The Integration Challenge

The second issue is integration, which Dell is attacking with its acquisition of Boomi. The company's cloud-based integration connectors, which it calls "Atoms," simplify and automate a growing number of mundane integration tasks.

Dell also initiated a certification program in the spring that has become the centerpiece of its new cloud business applications and small and medium business (SMB) solutions, which are pulling together and distributing a widening array of third-party SaaS applications. As I mentioned in my previous commentary in this space, Dell is increasingly viewing itself as a channel to market for other cloud solutions, and Boomi's integration capabilities have become a pivotal part of its go-to-market strategy.

Software Development

The third issue -- one that is quickly becoming a channel opportunity for cloud providers -- is software development. Software development platforms have always been an integral component of software vendors' partner programs, but in today's cloud environment, Platform as a Service (PaaS) offerings add another dimension to this market dynamic.

All you have to do is attend Salesforce.com's Dreamforce conference or follow the company's day-to-day marketing efforts to see how its Force.com PaaS has become a major channel to market for a growing assortment of startups and established vendors seeking to tap into the explosive growth of the cloud. These companies are using Force.com not only to accelerate their application development processes, but also to gain access to Salesforce.com's growing customer base.

These are just three areas where innovative cloud vendors are using their ability to address key customer concerns to provide new channels to market for others in the cloud industry.

Jeff Kaplan is the managing director of THINKstrategies and founder of the Cloud Computing Showplace. THINKstrategies is hosting the Cloud Channel Summit on Nov. 7 in Mountain View, Calif. Kaplan can be reached at jkaplan@thinkstrategies.com.

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