By Ian Moyse, sales director, Workbooks.com (Board Member Eurocloud & Governance board member Cloud Industry Forum)
Cloud solutions are levelling the playing field for SME customers. This enables smaller businesses the freedom of choice previously only allowed to enterprise clients. It was not so long ago that many vendor solutions were not a viable choice for the SME, as the setup costs of infrastructure deployment of hardware and databases priced them out of the customers reach. SMEs have more freedom of choice than ever before and more deployment options from on network, virtualised, private and public cloud solutions. They can manage these themselves or outsource to a managed service provider that can handle a small business using the tools available in today’s market.
Email and backup have proven to be the easiest form factors to adopt, making the most common sense to the customer due to the clear advantages of diverting spam off the network and holding backup data off site in multiple locations. The next transitionary stage will be an increase in core business applications being implemented as cloud solutions, delivering more power and flexibility to the SME and allowing them to focus on core business activities and less on running IT infrastructure.
Channel partners have a transitionary challenge with the cloud. Whether it be concern, nervousness, confusion or mistrust, a lot of negative attitudes have been generated in the channel. Yet there are also a growing number of channel cloud players, either from the traditional space or thoroughbred new-born channels who focus only on cloud.Questions I have heard from the reseller channel across events, meetings and roundtables over the past 12 months are wide and varied, however a key group of questions and concerns come up again and again focusing around;
o “Will vendors sell cloud direct?”
o “Where’s the services revenue for me as a reseller?”
o “There’s no differentiator for us as a reseller”
o “The margins are too low”
o “Customers can buy it online, why should we resell it?”
o “Why should I bill monthly for cloud when I get paid up front for products?”
o “How do I fund the transition period to get from lump-sum to over time billing?”
o “I don’t want my existing customers switching to cheaper cloud solutions!”
o “I want to bill my customer, not have the vendor do it!”
All of these concerns have some level of truth, but all can also be resolved if vendors and resellers work together. Surveys and reports from end users show they are lacking the knowledge about the cloud, so there is a strong opportunity for the channel to up their game, educate, understand and bring value to clients in a consultative manner. This brings margin, differentiation and customer value. It is therefore important that the channel, between the vendors and the customer, get to grips with cloud solutions, terminology and the value propositions they can bring and understand how to adapt in terms of selling, marketing, billing and showing their value to not only the customer in this new form factor, but also to the vendor. The longer that cloud is resisted by the channel, the more pressure there will be on vendors who have heavily invested in building expensive cloud infrastructures, to push it directly.
As cloud solutions move towards more competitive and flexible billing there will be challenges for the traditional reseller approach, but these are not insurmountable if the adoption starts now. Leave it too long and the transition will be painful like jumping off a cliff, rather than going down a gentle gradient as the landscape changes. What we will see is a change of the go-to market landscape – traditional resellers may find themselves having new competitors in this arena. It will not necessarily be one of their reseller peers bidding against them, but perhaps a managed service provider, an internet service provider or a telecoms reseller bidding cloud as part of their monthly billing solution set. These are supply channels that already understand the services model and it’s likely they already engage in term rather than up front billing.
Cloud offers opportunities for those that self-educate and certify themselves for the needs of the customer and employers, today and in the future. More cloud education is needed in all sectors to enable businesses to understand and utilise this important new technology to its advantage. Reselling cloud is about the willingness to adapt, learn and take part. There is money in those clouds if you are willing to work for it now.