Channel needs to re-evaluate business model, according to Rise

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Channel firms need to start updating their business model in order to market and sell Cloud services, or risk falling behind the curve when it comes to Cloud adoption, according to James Henigan, product and IT services director at, Cloud services provider Rise.

New research published by the Cloud Industry Forum (CIF), has identified that over the past 18 months the UK market for Cloud services has seen an increase of 27 per cent amongst first time users, with approximately 75 per cent of UK business expecting to use at least one Cloud service by 2013.

Henigan commented: "The research issued by CIF focused on the end user, particularly SMBs, therefore it's not surprising that we are seeing organisations embrace Cloud. This will continue to grow as education and awareness increases and adopters continue to recognise the inherent benefits that can be achieved through implementing a Cloud solution within their business.

"However, what is interesting is the knock-on effect Cloud adoption is having on the channel, particularly how it is reacting to Cloud opportunities, notably that this is in response to customer demand, rather than proactively creating and embracing themselves. The result of this means that as end-users start to gain a better understanding of the Cloud and the benefits it brings, the channel are being forced to make changes to their business model in order to capitalise on the impending Cloud era.

"We are seeing that despite an increase in businesses embracing the Cloud, a lot of channel firms are still relying on out-dated business plans and models, with reluctance towards subscription based services which are enabled by Cloud technology. The impact of this is a major headache for sales teams as they continue to be torn between providing customers the most suitable solution from the Cloud and selling traditional solutions that is the most commercially rewarding for them in the short term.

"For technology service delivery companies such as VARs, MSPs, SIs and the like, failing to evolve their business model early could really impact them in the long run leaving them behind the adoption curve, while their competitors sprint ahead when it comes to the Cloud.

"In order to halt this potentially dangerous slide, business decision makers of these firms need to understand how they can re-evaluate their existing business plans to firstly ensure they have a compelling solution to offer the market and secondly incentivise Cloud sales – doing this will then allow them to take a successful proposition to market."

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