Channel resellers need to make sure they choose the right route to market
Channel resellers need to make strategic decisions to reap the benefits of increased cloud uptake among end-users
According to the IDC (International Data Corporation) Worldwide Quarterly Cloud IT Infrastructure Tracker, total cloud spending will grow by 21 per cent year-on-year in 2015 and it will account for approximately 33 per cent of all IT infrastructure spending. Private cloud IT spending will grow by 16 per cent year-on-year in 2015, while public cloud IT spending will grow by 25 per cent.
In light of these findings, Piers Linney, Co-CEO of Cloud Services Provider (CSP) and Microsoft Gold Partner, Outsourcery, has said that time is running out for channel companies that have, until now, struggled to transition to selling cloud-based solutions.
“We are reaching a significant point in the IT and communications markets. Until now, cloud has captured a growing, but still immature part of the market. There has therefore been a continuing source of business revenue for those selling traditional on-premises IT. The market has been pretty forgiving for channel companies that have only dabbled in selling cloud services to date, but not fully transitioned. These latest figures from the IDC show that this period is coming to end."
As cloud gains an ever greater share of the IT market, channel companies that fail to move to the cloud will be at a competitive disadvantage.
Piers Linney, Co-CEO at Outsourcery
“Channel resellers that have not yet made the cloud central to their business proposition need to look at the growth in demand for cloud services and take action to evolve their market offer. They need to make sure they are picking the right partners that will enable them to tackle the challenges of cloud IT and communications head on and meet end-user needs.”
“While we are seeing many channel providers try to adapt to cloud technology, there are many challenges along the way when adopting a completely new business model that has significant selling differences to traditional on-premises IT.”
Challenges to transitioning to sell cloud include adjusting to a payment structure for the continuing provision of a service, rather than larger initial cash injection gained from selling IT as an asset. Channel businesses also need to adjust their culture and business model to be more service orientated – customers are not going to go away but continue to be in a financial relationship long after the contract has been signed.
However, most importantly is the need to invest in building stronger partner relationships – a close and responsive relationship with channel partners will significantly improve service levels for the end customer.
As a Microsoft partner, Outsourcery participates in the Microsoft Cloud Solution Provider Programme, which enables them to provide direct billing to customers, while managing and supporting its Microsoft Cloud offerings, such as Office 365. With the programme, Outsourcery is at the centre of the customer relationship, helping the customer to take advantage of cloud services by owning the entire billing process with direct support from the reseller.
Linney concludes: “Many channel resellers are seeking the support of trusted suppliers to help them navigate through their uptake of the cloud. Channel resellers will need to make sure that they are signing up to the right cloud provider – one that is able to firstly develop their capability of reselling the cloud service and essentially provide them with a suitable service offering that can meet end-user demands. Those suppliers that have the right mix of IT skills and technical services capability will find it easier to win channel resellers and feed the cloud supply chain.”
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