Cloud Computing

How Cloud is a game changer for channel business

Arun Mysore

The rise of cloud will rewrite channel ecosystem in three ways, says IDC.

The rise of cloud will rewrite channel ecosystem in three ways, says IDC.

Firstly, to re-sell public cloud services, a fundamental transformation in the business model of channel partners would be required. As public cloud services are subscription-based, Channel partners would need to develop an ongoing relationship with the customer to drive renewals. This is a drastic change from the transactional approach that most value-added resellers (VARs) currently follow.

Secondly, local partners would have to learn new skills – consulting, application architectures, migration tools and services – to cater to clients implementing cloud services.

Thirdly, due to annuity-based revenue stream return on investments for partners would be seen in two to three years time as opposed to the present six to 12 months.

“…Channels have to move away from just ‘clipping a ticket’ as they resell a product or service and getting a referral fee as a result. Channel partners who just view cloud services as another SKU to resell will struggle.,” says Philip Carter, a research director at IDC Asia/Pacific.

Philip advises, “Customers will also need to look at integrating cloud services into a broader service management strategy. Channel partners who work to build a solution along these lines and build out capabilities accordingly will thrive.”

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