White-labelled cloud services seen as critical by the channel but must be matched supply-chain transparency, finds new research


The ability to white-label cloud services is increasingly important for the IT channel when determining which vendors to work with, according to a major market research project from the Cloud Industry Forum (CIF).

However, CIF has warned that while white-labelling enables resellers to protect their brands and maintain control of the customer relationship, resale arrangements must remain transparent to ensure customers are fully aware of what they are buying.

The research, conducted by Vanson Bourne in 2016 on behalf of CIF, polled 150 senior decision-makers from IT channel organisations (MSPs, technical VARs and Systems Integrators) regarding their attitudes and confidence in reselling cloud services. It found that the ability to white-label services is a key issue for the channel today. While the proportion deeming white-labelling as important has remained the same since the last time the research was conducted in 2012 (86 per cent), there has been a 20-percentage point increase in organisations that see white-labelling as either critical or very important.

According to CIF, it is critical that white-labelling arrangements are matched by a commitment to transparency in the supply chain and it is clear from the research that that transparency is lacking in many cases. Just a third (31%) of organisations proactively inform their customers about the third parties involved in the delivery of all of their services, with the remainder offering only a partial view or, in 3% of cases, no view at all.

Alex Hilton, CEO of the Cloud Industry Forum, said: "Many resellers have spent years building their brand and controlling the service that their customers receive, it is understandable that they will want to remain in control of that relationship. This is clearly a part of the business that they are proud of and naturally keen to protect. Therefore, the growing importance from organisations on white-labelled services should come as little surprise and vendors that don't offer the ability to white-label their services are going to struggle to make much headway with their partner programmes.

"But when white-labelled services are offered, it is important that the arrangements are completely transparent so that customers know precisely what they are buying and which parties are responsible for the delivery of their services. Unfortunately, the data suggests that there's much room for improvement in that regard. Ultimately, for cloud to be seen as a secure and trustworthy alternative to on-premise infrastructure, Cloud Service Providers (CSPs) need to be fully transparent about the services they are offering. This is a core tenet of our Code of Practice for CSP, which exists as an independent benchmark that credible CSPs should be able to measure up to to provide more assurance to the market."

Alex added: "There is no doubt that the channel recognises the benefits of the cloud but it is apparent that resellers need more support from vendors if they are going to be successful at selling cloud services. Vendors need to offer tailored levels of support and technical expertise and must understand that organisations want to protect their brand and remain in control and be individual.

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