Ian Moyse, Sales Director at Workbooks.com, discusses the role of the channel for cloud service providers. This is the second of two articles in a series entitled ‘Can the channel come out to play?' Click here to see the first. This article will explain the challenges and opportunities for cloud resellers.
I have been building cloud channels for vendors for the past eight years and today we see an increasing number of vendors with cloud solutions on offer looking to figure out how to resell these through the channel. Having spent a great deal of money building, engineering and acquiring cloud solutions, many vendors have been struck with the realisation that their traditional supply-to-market (through an IT reseller channel) has not been as effective as they expected.
Some channel vendors even consider selling direct as they struggle to reach the end customer and grow their share of cloud sales to the levels they need and expect. There are a mix of reasons for this. Many resellers have shunned selling cloud - for reasons mentioned in the first article - resisting the change and only resorting to a transaction when the customer has forced their hand. I've spoken to plenty of people in the cloud vendor and distribution community and a common trend is that they are all looking for resellers. When they find someone willing, keen, able and perhaps already doing it they value them highly and are keen to engage and work with them. Why? Because there are not enough channel players representing the cloud who actually understand it. Providers are trying to find the help they need to reach the wide customer spread and get their share of the lucrative growth happening today.
We are seeing cloud solutions sold through Managed Service Providers (MSPs), telco resellers or traditional resellers of solutions who are expanding their reach and portfolio of services offered to clients. Newly founded cloud-only brokers and resellers are who understand the cloud model, the sales approach, the commission plans and the true value of annuity to their own businesses value are becoming ever-more prevalent in the market.
The traditional reseller has many people asking them to come and play; the vendors need market reach, need local trusted advisers representing them to clients and need people who understand cloud and are willing to sell it to clients. Many people are knocking on doors to be told ‘we're not coming out to play’; not until the customers ask us for it, not until we have to take part, or maybe not until it's too late.
We have seen this trend in other markets; traditional delivery methods and brands ignored a significant change to their peril. For example, Blockbuster Video failed to capitalise on the opportunity where Netflix, Lovefilm, Tower Records, HMV and others thrived in the online music world. The same can be said for Kodak who suffered because they didn't respond to the online shift that swept their industry. The IT sector is not immune, in fact it is at the core of this change; you can't ignore what is happening and the huge numbers relating to it. Telling yourself that you can protect your legacy sales and that it wont cannibalise your incumbent renewals will be an interesting and dangerous tactic to play.
Vendors are looking for resale channels that will embrace the cloud, work with them, educate and take valid cloud propositions to clients. End users are looking for agnostic providers who will advise them in their best interests of where / when to use the cloud. In the middle is the supply channel, needing to earn the right to demonstrate their value to both supplier and customer. Yes, it does need effort and a conscious decision that they are going to come out and play. And yes, it isn't always going to be easy and there will be some conflict and some losses along the way. But if you choose not to play you might be the one left by the waist-side, wishing you were were taking part.
Customers who hear more and more about cloud systems will find vendors or other suppliers who will help advise and supply them. Vendors will find new partners and channels who will take them to market. The world will continue and you may find that much of your existing business is lost and your future business is smaller. A great man once said "History will be kind to me, because I intend to write it". Your willingness to play in the cloud world and the effort you put in is up to you, no one can or will do it for you, but nothing can stop it happening at the break-neck speed we are seeing already.
Ian Moyse is Sales Director at Workbooks.com, Eurocloud UK Board Member & Cloud Industry Forum Governance Board Member. You can connect with Ian on LinkedIn.
