What’s the channel for cloud computing?

see all

Organizations are adopting cloud computing because when it is done right it lowers total costs, reduces CAPEX in favor of predictable opex, improves IT productivity, and accelerates solution deployment. However, in the rush to the cloud, the value and role of intermediaries have largely been ignored.

Cloud vendors that understand and take an active role in creating a cloud intermediary eco-system will better and sooner sidestep cloud hype and solve real business problems for their customers.

Traditional IT channels generated value by providing services such as expertise, knowledge of (and proximity to) the customer, customization, implementation and maintenance services, inventorying, etc. The channel created demand with end users and provided specification, fulfillment, installation, and support services. These services were originally paid for through the profit of the product sale, and subsequent revenue streams from their share of annual maintenance contracts.

Because most cloud solutions have less technology to be managed, classic VARs and SIs are not currently well aligned with the cloud business model. Many are looking to adapt to the new reality, by partnering with cloud vendors that understand channel value and support the new realities.

Cloud computing represents a wide range of technology and services needed to get it all working. Simple offerings require no IT or other special involvement. Other systems require integration and related services. Smaller companies may use cloud technology as-is while enterprises are more likely to take advantage of APIs to make a cloud solution even more productive for their organization.

Gartner has identified Cloud Services Brokerages (CSBs) as organizations that help companies locate, consume, and maintain cloud services that span multiple providers. Cloud services brokerages or CSBs face enormous growth and potential. They can be divided into three areas:

  • Aggregator brokers, which fill a role similar to IT distributors;
  • Integration brokers, which are like traditional IT systems integrators;
  • And customization brokers, which are similar to ISVs.

The observation that the “web is the channel” is limited and partially misleading, in particular for enterprise software. Complex products and buying processes may be simplified by cloud solutions (by reducing certain steps and completely eliminating others), but there is still a large and valued role for trusted advisors.

The cloud is changing who the intermediaries are. Any enterprise considering cloud solutions is advised to look beyond the surface of product features and functions, and beyond the free 30-day trial, to the vendor’s strategy and practice relating to intermediaries such as CSBs, recognizing that a healthy ecosystem will help guarantee your initial and ongoing success.


About David

"Transforming Your Contact Center Into an Essential Corporate Contributor" Cloud Computing: 4 Ways to Overcome IT Resistance

Recent Posts


see all

Subscribe to our Newsletter