The general marching orders from business leaders to IT these days is lead them out of the data centre.
Most organisations now fully recognise the cost benefits and agility of moving applications and data to the cloud, trading CAPEX to OPEX expenditures through cloud subscription services. For the channel community, this means moving to an annuity-based revenue model, building out new types of cloud-based services that will replace large parts of their traditional on-premise business.
But to get there, resellers need to reduce their reliance on traditional and shrinking business models, whilst building out and developing new value-add services. As more organisations explore the cloud, a stable and robust but balanced approach is required to best serve their needs.
All this talk about cloud adoption is good news, right? Perhaps for the customer, but it’s difficult for resellers to restructure overnight. And not all partners have the agility to do this as quickly as they would like. As the sand shifts rapidly under their feet, they must redesign and adjust their solutions and sales models. How can they remain relevant and useful to customers that migrate to the cloud?
Likewise, channel partners must also evolve from Capex revenue models to monthly Opex subscriptions, which is easier said than done for sales reps who are accustomed to moving and closing one-time big deals. Resellers must not be agile to support ‘pay as you go’ services to their customers and adapt to the ups and downs of their businesses.
Experienced Scouts in an Unchartered Territory
Resellers have the opportunity to transition to this new territory by serving as experienced scouts to help their customers migrate to the cloud. This is especially true in the age of multi-cloud computing, where more companies are stacking clouds from multiple providers with little or no means to manage them.
Abandoning the maxim of "standardisation at all costs," businesses realise they can effectively mix on-premise and multi-cloud infrastructure resources to get the optimum combination of speed, affordability, compliance, and security. Recent research found 84 percent of companies have a multi-cloud strategy, and enterprises with a hybrid public-private cloud strategy grew from 51 percent in 2018 to 58 percent in 2019 – a clear direction of travel towards a hybrid, multi-cloud future.
This is all creating new opportunities for the channel, as cloud infrastructure services increase, and businesses integrate multiple providers with existing on-premise infrastructure. According to Canalys, cloud infrastructure services spending is set to surpass $143 billion globally in 2020, driven by IT channel partners. This means that a channel partner that manages a hybrid/multi-cloud environment is in a turnkey position with customers, to offer flexibility through its different providers, but maintaining the primary relationship on a subscription basis, cementing sustainable long-term revenues.
Teaming with Cloud Service Providers
Getting into this position to take advantage of this new world will require the channel to address how it works with Cloud Service Providers (CSPs) as well as customers. Companies are looking to use the strengths of different CSPs and deployment models, depending on their application, data, compliance, and performance requirements. The result they seek is a customised deployment that exactly meets the needs of the business. The challenge is in selecting the right options. That’s the point where the channel and CSP partners can team up and together offer the right kind of guidance.
That’s why future channel/CSP partnerships must double down on collaboration to offer a service that is seamless from the customer's point of view. This is especially critical when it comes to back up and disaster recovery (DR) services, which depends on trust and reliability for support and guidance when needed. There can't be an arms-length relationship between customer, channel, and CSP, it needs to be a true partnership.
When it comes to collaboration, channel businesses need to assess prospective CSP partners on what they will bring to the table. Can they assist with cloud scoping tools, concierge services for customer onboarding and migration? Do they have specialist skills that fit with a client’s industry needs like strong security and compliance? What they simplify cloud management and billing? At the bottom line, will they help close the deal and keep the customer happy?
Flexibility is another crucial CSP attribute. There’s no such thing as a customer “one-size-fits-all,” so flexibility is needed when delivering cloud services. Inflexible partners cause needless bumps in the road to building a strong customer relationship. Here at iland, we are in a firm position to support the channel. We have the knowledge and expertise to support growing annuity-based revenues while allowing our partners to own the relationship. Plus, we have just launched new partner services, including customised partner portals, 10 global data centres, and our Catalyst cloud sizing tool to help the partners develop their cloud environments without over- or under-provisioning resources.
There's no denying that there is a massive opportunity for the channel to secure sustainable long-term revenues from cloud deployments while still benefiting from its expertise in on-premise deployments. However, while everyone is talking cloud, many don't understand the intricacies and complications of moving to a cloud-based model and accurately sizing the cloud from day one. With the right CSP, the channel can differentiate and offer the skills and expertise customers need.