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Preparing the Channel for cloud-based services

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An over view of what the cloud can do for you and the opportunities

As the market for new cloud-based services continues to grow,there is some nervousness among many channel partners about their role in the value chain,

often because when vendors deliver solutions like Software-as-a-service (SaaS) they feel it could cut them out of the loop. However, while there is no denying that traditional channel business models will be impacted by the move to cloud-based services, there are also a host of benefits for those channel partners willing to embrace the change. It is a golden opportunity for service providers to position themselves as ‘trusted advisors’ as end users look to embrace this emerging technology.

 

End users see Value Added Resellers (VARs) as their advisors, to help them better understand all the latest technology trends. The path to cloud deployment, for example, is dependent on the current state of each organisation’s IT, resources, business objectives and priorities and strategies for risk mitigation. Each journey has to be tailored to a particular customer’s situation, working to assess, evaluate, and determine the most appropriate path that accelerates the transformation and produces the highest business value to the organisation, while appropriately offsetting risks. In some cases, a bespoke, tailored offering may be required and in others, a more standardised, transactional approach to cloud services may be the more cost-effective option, particularly for simple applications such as email.

The best cloud-based services do not offer a ‘one size fits all’ model. Every end-user will have different requirements and this demands flexibility and services that truly reflect their needs. This represents an ideal opportunity for channel partners to demonstrate their knowledge of the latest technologies available and provide insight on what would work best for the customers’ business, whether that is a cloud-based approach or in some cases, where this may not be suitable, using more traditional methods of delivery. VARs are ideally suited to be able to guide, advise and ultimately deliver these services.

No matter how IT services are delivered or what the specific solution may be, customers will always need expertise in what IT solution is right for their business and a local presence that understands their unique needs. As such, the relationship between agents and resellers and their customers must evolve from being purely transactional to being based on informed and trusted consultancy. Those channel partners that are able to advise on the issues presented by cloud-based services and offer solutions that strike a balance between security, cost and compliance will be well placed to make the most of this opportunity.

In addition, by adopting a more consultative role in selling cloud services, channel partners will have the ability to market and sell complementary offerings. It is not a one-touch sales process, but an ongoing relationship involving in-depth consultancy and tailored sales offerings. Channel partners can also set their own commercial terms with customers, manage all customer billing, and thereby grow the depth of existing client relationships. Partners will also benefit from recurring revenue streams for the lifetime of the customer, making it easier to sustain growth. Even accounting for customer churn, the majority of a VAR’s cloud services revenue will be secure year-on-year whereas under the more traditional sales model, VARs will have to refresh their entire sales pipeline each year in order to sustain growth.

For the channel, the question is simple: “Are you ready to redefine your business to take advantage of the pay-as-you-go and scalability benefits that cloud services and infrastructure offers, and to capitalise on these opportunities?” This revolution will not happen overnight – it will be a gradual process and not every customer will completely migrate to an external service model. As such, VARs can also help their customers to build their own private or hybrid cloud implementations, depending on their needs.

Today, for VARs it is not about replacing entire systems with cloud-based solutions, it is about working closely with end customers to assess their needs and supplement traditional systems with cloud services where appropriate. There are plenty of businesses out there that need help not only evaluating how to best utilise cloud services, but also implementing cloud-based solutions. It is those agents and resellers that can build a trusted and consultative relationship with their customers that will be best placed to capitalise on the disruptive potential of the flexible consumption model offered by cloud-based services.

Evolving from service provider to trusted consultant

By Gary Moore, European Partner Director, Colt