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Ignorance will not be bliss when it comes to the cloud

I know this probably sounds vaguely obsessive, but I spend a lot of time worrying about how technology solution providers are coping with the slow, but sure transition of computing into the cloud.

That is because, frankly, I continue to hear the sort of collective denial that could be bad, very bad, for business survival. People, you don’t have to like the cloud, but you do have to be ready for it. Even deciding not to offer cloud services is a justifiable decision; ignoring the impact of cloud services means you’re letting circumstances decide your fate.

SOOOO, I was glad to hear, then, the cloud business models were a big part of the discussion during the recent 2010 summit gathering of the HTG Peer Groups. There are at least two special interest groups investigating the impact on channel business models.

Scott Scrogin, president of HTG, says there are far more VARs, resellers, systems integrators and other members of the technology channel evaluating the cloud NOW than just three or four months ago. Some, he says, are pretty far down the path of figuring out how to transition their operating business model. Others intend to use it as an opportunity to exit the industry, because they don’t have the stomach to deal with the multi-year transition that moving to the cloud will require. “Some don’t want to go through this,” he says.

In Scrogin’s mind, those who are considering how to integrate the cloud into their business model — either by selling cloud infrastructure services OR by providing development and integration services for various software as a service (SaaS) offerings — are coming to two very clear conclusions:

  1. Operational discipline will be even more important than ever. Every little bit of inefficiency that can be squeezed out of your business processes is crucial.
  2. Cloud requires focus. “You will need to narrow down the cloud infrastructure vendors that you represent,” Scrogin says.

That could make things very interesting for technology vendors, as they try to woo existing and new partners to represent their own cloud offerings. In that context, I want to point you two some new research from channel market intelligence firm Amazon Consulting that could be valuable in your planning services.

Beth Vanni, director of market intelligence for Amazon, says the two briefs that Amazon has published are a result of conversations with everyone from infrastructure providers to SaaS integrators to hardware systems integrators. As you might expect, at least some of the channel-type companies that were interviewed by Amazon are worried about the idea that they might be dis-intermediated during the transition. The trick will lie, Vanni says, in the creation of new value added services that matter to the consumer of cloud services. Two examples: integration of cloud applications and capabilities with on-premise technology solutions, and the creation of unified identity management and sign-on security services. Not to mention, a rational approach to billing.

Here’s Amazon’s brief about the various solution provider business models that will “matter” as we move to the cloud model of computing. This second document provides a look at what vendors are thinking about from a partner support standpoint. Vanni has some more succinct comments in her blog.

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