Cloud services are viewed by some VARs as nothing more than a fancy name for outsourcing. Naturally, there have been cloud doomsday prophesies for VARs and IT professionals alike.
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While cloud services such as Microsoft Office 365 have the potential to negatively impact VAR business, there are also a few ways that Web services can create VAR opportunities.
The revenue model shift
If most of your customers begin transitioning to cloud computing, you probably won’t sell as much hardware as you had in the past. Not only will server hardware demand decrease, but eventually PCs will probably give way to thin clients as organizations begin to use virtual desktop infrastructure (VDI). That’s why it’s important for VARs to begin making their revenue models less dependent on hardware sales.
Take note that VARs shouldn’t transition away from hardware sales completely. On-premises hardware will still be an important part of your portfolio, especially for customers who want to implement private clouds. But, a large percentage of your Microsoft customers may eventually transition to Office 365, so you should begin structuring your business to take advantage of this trend.
For now, VARs will want to focus on consulting services for customers on transitioning to Office 365. Consulting activities such as linking a customer’s existing Active Directory (AD) deployment is tedious. Microsoft provides plenty of documentation, such as the Microsoft Office 365 Deployment Readiness Tool, on the implementation process. But the various instructions, procedures and information are scattered across numerous TechNet articles, putting VARs in an ideal position to help customers sort through the clutter and make the transition.
What to do after an Office 365 migration
Helping customers move to Office 365 is a great way to make money now, but it probably won’t be a viable long-term revenue stream. Eventually, most of your customers will have already made the transition. Microsoft is also working to make the implementation process a lot easier.
For example the forthcoming Exchange Server 2010 Service Pack 2 (SP2) will contain a wizard designed to help customers link on-premises Exchange Server deployments to Office 365. According to Microsoft, the wizard largely automates the process by condensing the 46 required steps into six.
So what’s your next step after everyone has finished transitioning to Office 365? Your best bet will be to focus on helping customers manage on-premises portions of their networks. As customers begin using cloud services more heavily, they will become increasingly dependent on Internet bandwidth. This opens up bandwidth monitoring and management opportunities for VARs.
Another way to service your customers is providing identity management services. After transitioning to Office 365, customers will probably begin to use additional cloud services and a big challenge is providing end users with a seamless experience. Microsoft offers single sign-on capabilities for Office 365 through the AD Federation Service to create that experience. This same technique, however, may not work for these additional cloud services such as Salesforce. There is a lot of money to be made by helping your customers architect a seamless solution involving multiple cloud applications.
Be your own cloud
By using Office 365, your customer is saying that they want to reduce their network’s cost and complexity by moving high-maintenance services into the cloud. But you need to remind them that Office 365 isn’t a fully-comprehensive product. An organization can use Office 365 to run Exchange, Microsoft SharePoint and Lync in the cloud, but they will still usually need domain controllers, domain name system servers and other on-site infrastructure components. They may also be continuing to operate on-premises file servers and application servers.
Rather than wait for your customers to outsource these services, you could be proactive by creating your own Infrastructure as a Service cloud and helping your customers to migrate all but the most basic network services. Doing so will simplify the transition process for your customer, while also helping you to create a steady revenue stream.
As you can see, Microsoft Office 365 and other cloud services have the potential to drastically change IT and your job. But VARs can profit from this fundamental shift by offering valuable services during the transition to the cloud.
About the expert
Brien M. Posey, MCSE, is a six-time recipient of Microsoft's Most Valuable Professional award for his work with Exchange Server, Windows Server, Internet Information Services, file systems and storage. Posey has served as CIO for a nationwide chain of hospitals and was once responsible for the Department of Information Management at Fort Knox. As a freelance technical writer, he has written for TechTarget, Microsoft, MSD2D, Relevant Technologies and other technology companies. You can visit his website at www.brienposey.com.
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