Cloud computing business model: Yet another tough transition
Business model makeovers are never easy, and the cloud computing business model continues that tradition.
First, some background: Three decades ago, many resellers began the transition from box-pusher to systems integrator or solutions provider. The change was much more than a matter of rebranding. Companies needed to add consulting staff, build project management skills and adopt new sales tactics. The newly recast integrators, however, soon found themselves facing another bridge to cross as mainframes and minicomputers gave way to client-server architectures. And then came the managed services shift, which called for channel partners to embrace subscription-based sales and remote monitoring versus on-premises installation.
The cloud computing business model transition may prove the most challenging of the lot. TechTarget's 2016 Channel Directions survey, which polled 565 channel partners worldwide, found that more than half of the respondents had yet to offer their first cloud service. That's a rather troubling statistic given that cloud computing has been around, in various forms, for more than a decade.
But it is easy to understand the hesitancy. The cloud presents a multidimensional challenge to channel companies that need to learn how to sell, deliver and monetize the technology. In addition, partners have concerns regarding cash flow disruption and whether the cloud will cannibalize existing businesses. And there's the technical aspect of navigating multicloud environments and learning how to integrate a customer's on-premises gear in hybrid cloud deployments.
But there's an even more fundamental question for would-be cloud service providers: Where to begin? Scores of as-a-service offerings are available in the cloud marketplace, and the list seemingly grows every day. Is there a logical cloud starter service for the uninitiated? What steps should a channel partner take to retrain employees or hire new talent? Does it make sense to seek help from distributors, vendors or other cloud-enablement companies?
This handbook aims to raise questions and suggest answers with the goal of helping channel companies launch their initial forays into the cloud computing business model.