By Robert M. Cohen, president and business editor, Integrated mar.com
Robert: Keith, how do you define the Cloud?
Keith: It is about the ecosystem. There is still a range of offerings which may or may not be part of it. However, we are getting more narrow on the definition as we seem to be including: Infrastructure as a Service, SaaS, hosted services, Platform as a Service. Overall, it is about a switch in how end users use technology.
Robert: Do VARs understand the Cloud?
Keith: At the high level they understand it. Now, VARs need to be educated on what their major role is in the Cloud. They need to become advocates of the Cloud. We have to take the confusion out of the Cloud.
Robert: Do VARs fit into the Cloud?
Keith: VARs will never be disseminated. They help customers find the business solutions they need, as they relate to technology.
Robert: How is the Cloud going to change technology in the SMB space?
Keith: The less than 100 seat companies will be the early adopters because they are looking at IT as a service. The Cloud will provide them with the servers, computers, software, mobile devices, storage, security, etc., that they need. SMBs will be more comfortable with the public Cloud approach then having to host everything themselves. It will save them money, allow them to budget more accurately and they do not need IT people on staff.
The Next level, 101 — 1000 seats, will want a hybrid model where they will use public and private Clouds along with on site technology. This provides a great way for VARs to get into these companies as they will need integration services.
Robert: Is the Cloud here to stay?
Keith: Although the technology is similar to time sharing and data centers of the past, things change. Now the industry is more ready for to trust their data to outside bodies. The Cloud brings together the hardware, ISVs and applications. The Cloud is involved with applications that will be more sophisticated and better integrated. End users who are not comfortable with public Clouds will get a private Cloud which is just a virtualized, secured data centre solution. This happens because they don’t trust the public Clouds with their data.
Robert: Will Distribution be a key component in putting together Cloud solutions?
Keith: Over the next few years the changes to technology solutions, due to the Cloud, will be something that Distis cannot afford not to look at. The Cloud will be about 25% of technology solutions in SMB space.
Robert: What will be the role of Distribution?
Keith: Distis have to create a virtual marketplace so our VARs can find the Cloud service providers, just like we do now to help connect the VARs with the Vendors. We need some way of certifying the VARs on one side and ranking the service provides on the other side.
Robert: What is Ingram doing to secure its role in the Cloud?
Keith: We have already built an industry leading foundation with Seismic, our services brand. This gives Ingram Micro a huge head start in helping our partners get into cloud computing. We are the leading distributor in services. We have already helped over 1600 VARs move to managed services. We need to take Seismic to the next level so that we are ready when the market is ready. We have to help our Vendor and VAR partners move to the Cloud. We have to be the industry leader like we were 10 years ago with software licensing.
We have also created the Cloud Conduit Advisory Council to further accelerate industry adoption and build a greater understanding around Cloud computing. To establish a common ground for the IT industry’s cloud innovators to share their vision, seek new alliances and drive greater visibility into the opportunity, challenges and benefits that cloud computing brings to the IT channel at large. Together we will further enable our channel partners to clearly articulate and demonstrate the benefits of cloud computing to their customers.
Robert: Will Vendors by-pass Distributors?
Keith: No. Vendors will need to get to the SMBs via channel partners. To do this they will engage distribution, by getting on our line cards and then going through Ingram, and other distributors, to reach the channel. Like distribution always does, we will take some of the cost out of the process. Essentially, we will be providing the same basic services as we do now:
Providing a single source for most of the relationships that our VAR partners need.
Providing one invoice for Vendors rather than thousands of invoices.
Aggregating all types of services, including infrastructure, hardware and software and the service providers that our VAR partners need to run their businesses.
Providing tools, reach, etc.
Robert: Are you finding that some Vendors are leaving Distribution right now because they do not see the value you provide in the Cloud world?
Keith: Yes. We need to educate and enable the Vendors on how they need to look at the Cloud world without the services provided by the channel, which start with distribution. We have been spending a lot of time with our Vendor partners that are already in the Cloud, discussing how they can successfully to go to market with us. They also need to remember that VARs are the best placed people to service the SMB market. Reaching the VARs that own the relationships with the SMBs is a costly, but essential ingredient for successfully reaching and selling to SMBs. Distributors take costs out of the process for the Vendors due to our experience and relationships with VARs.
Robert: Where will Distributors get their new Vendor partners from?
Keith: ISVs will be the new customers for Distis. The Cloud provides a better way to reach the SMB market and thus will open up all sorts of new opportunities for SMBs to take advantage of tons of new apps.
Robert: What will be the role of channel partners in this new Cloud based world?
Keith: Their primary role will be enablers. They have to become Trusted Business Advisors to their customers, helping them find and use applications that will reduce costs and/or drive revenue for their SMB customers. Here in the US, the government stimulus programs are opening up a lot of vertical niches that need VARs to enable them: health care, local government and K 12 schools are perfect for Cloud solutions.
Robert: So overall, where will the channel fit into the Cloud?
Keith: Aggregating and enabling infrastructure, platform and software (apps) for SMBs.
Robert: What advice would you give to VARs regarding the Cloud?
Keith: Embrace the Cloud. It will be a great revenue model for you and a great add on for your customers. Get educated on the Cloud and educate your customers and prospects.
Robert Cohen, a passionate and enthusiastic channel advocate, is the founder of the ChannelLine Advisory Council as well as president and business editor of Integrated mar.com, publishers of Channel Advisor, eChannelLine and ConnectIT. Since 1980 he has worked with 350 IT vendors, distributors and resellers in developing and implementing strategic go-to-market programs, using a variety of direct, channel and hybrid models. Integrated mar.com, in conjunction with Robert has created the Trusted Business Advisor program.
Robert can be reached at 1-800-465-2059 or by email at rcohen@integratedmar.com.
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