Cloud and The Channel- Where's the space?
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Is Cloud a "Perfect Storm" or an "Amazing Opportunity" for the IT Channel. It's certainly shaking things up! Why? Because the delivery model and the business model are changing dramatically and the Channel is being forced by vendors to change the way they do business. Does this represent and opportunity and how does the Channel best take advantage of the opportunities to resell Cloud services? In this presentation- Justin Pirie, a SaaS and Cloud expert digs into the issues, presents data from Analysts and suggests a path forward for the Channel.
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Editor's Notes
- The Secrets of Successful Cloud Adoption: what they don’t tell you Cloud has a seemingly unstoppable momentum behind it- but is it clear at the outset what the benefits of Cloud are beyond the shift from cap-ex to op-ex? What exactly are these benefits and how do we access them to adopt Cloud successfully?
- Security
- Continutity
- Archive
- There has been so much talk about Cloud over the past few days
- The good news is that datacentres aren’t going away- it’s just getting a whole lot more interesting
- So- who’s using it?
- So- who’s using it?
- So- who’s using it?
- So- who’s using it?
- From the Mimecast Cloud Adoption Survey http://www.mimecast.com/events-press/press-releases/article/view/cloud-computing-delivering-on-its-promise-but-doubts-still-hold-back-adoption/462/
- From the Mimecast Cloud Adoption Survey http://www.mimecast.com/events-press/press-releases/article/view/cloud-computing-delivering-on-its-promise-but-doubts-still-hold-back-adoption/462/
- From the Mimecast Cloud Adoption Survey http://www.mimecast.com/events-press/press-releases/article/view/cloud-computing-delivering-on-its-promise-but-doubts-still-hold-back-adoption/462/
- From the Mimecast Cloud Adoption Survey http://www.mimecast.com/events-press/press-releases/article/view/cloud-computing-delivering-on-its-promise-but-doubts-still-hold-back-adoption/462/
- 2010 Gartner Hype Cycle for emerging technologies
- 2010 Gartner Hype Cycle for emerging technologies
- Let’s relate that back to the email market
- We’re at approximately 4% adoption today according to Gartner
- Rising to 10% at the end of 2012
- And 30% by the end of 2015- a big shift
- Double edged sword
- Cloud Represents a Perfect Storm for Channel partners
- Oh and subscription businesses are worth 2-3x a services business.
- Double edged sword
- A shift from Capex
- To Opex
- A shift in focus
- And a shift from a technology focus
- To a business focus
- So why is the cloud so scary for the channel?
- The cloud offers a lot of what the Channel used to.
- Disrupts the financial model
- And the skills
- We’ve seen this before in other industries
- Like the travel business- how many people go into a travel agency to book holidays these days?
- I can’t remember the last time I went to a travel agency- with kayak and comparison sites- I never go there.
- If you do it’s because you want service- a package, a solution, personalised without any hassle
- Although cloud adoption has been growing rapidly, it is still unclear where and how the channel can and will add value. Because of this, channel companies have been hesitant to invest, leaving end users with limited access to help when they need it.
- Just because Customers could do it themselves
- Doesn’t mean they will. It is not the end of the channel. It’s just going to be different Most people haven’t got the time or inclination to do it themselves. No one would have cleaners or builders if they did it themselves.
- The challenges facing enterprises building private cloud services or leveraging public cloud services are significantly more complicated than just the technology. Fundamental change is needed in culture, business models, IT architecture, service management and politics — all opportunity areas for the channel to provide business consulting, but very different from the channel's traditional role.
- Greenfield sites
- Business processes
- Hybrid architectures
- Mean professional services
- Cloud readyness- tidy up the ecosystem
- Carrot and stick
- Any company that relies on the product transaction (hardware or software) to drive attached services revenue supported by ongoing maintenance contracts will have to rethink how and what it offers its customers today and in two or three years.
- If traditional channel partners don't react quickly enough to the changes in the market, they will be replaced by other channel partners in their accounts.
- More and more IT providers are attempting to go directly to end-user customers with their cloud solutions only to find out that customers need more than they are willing to provide. This will mean increasing channel capacity to meet demand.
- The two biggest challenges facing IT providers today are the lack of capabilities contained in their current partner ecosystem and the lack of new entrants with the skills required to further the adoption of various cloud services. Without these capabilities, the entire market will have slower adoption, regardless of the service.
- Cloud Pro Services in Europe today is $560 million in 2010
- European Enterprises Will Spend $8.2 Billion on Cloud Professional Services in 2015
- The new IT environments will have elements of traditional IT, private cloud, and public cloud, and management and integration will become a challenge for which European enterprises will typically choose to hire an external service provider, driving further growth in the cloud professional services market."
- IDC sees a clear trend that new outsourcing contracts include cloud services, and as much as 25% of cloud professional services will be delivered as part of outsourcing contracts. This has a major influence on the choice of provider for professional services as well as for cloud services: the provider needs to be able to manage both the traditional and the new environment under one contract and needs to be able to migrate larger parts to the new environment during the life of the contract.
- "Some believe that cloud is just plug and play, but that is not the case for the more complicated existing or new solutions. So professional services will not go away, but they will change and in the longer run beyond 2015 — when migration is complete — account for a much smaller proportion of IT costs.
- "Another important point is that service providers need to prepare for the rapidly growing request for cloud professional services and have the resources available. Right now, demand is mainly for business cases and roadmaps, requiring both business competence and architectural competence, but on a limited scale. But in a just slightly longer time frame, most if not all consultants need to understand cloud. Vendors have substantial investments ahead of them in creating the necessary capabilities to support this rapidly evolving market."
- So I think the Channel needs to embrace the Cloud
- Or face irrelevance….
- So what to do now?
- The most important thing is to retain the status of the trusted advisor
- Which means you need to be educating the customers, not them educating you
- Cloud is an Evolution and a Revolution
- So we can’t stay the same can we? Otherwise we could end up like King Canut trying to repel the tide. Obviously the channel needs to evolve http://en.wikipedia.org/wiki/File:Cnut_the_Great_Obverse.jpg
- Cloud Services Brokerage- where you aggregate Cloud Services and provide Solutions to your Clients
- Through 2015, cloud service brokerage (CSB) will represent the single largest revenue growth opportunity in cloud computing. The channel has an opportunity to play a significant role in aggregation and brokerage services, yet few have begun to invest in becoming a CSB.
- So this brokerage thing- let’s dig into that. Can you really start to make money from selling Cloud Services?
- BPOS- year one: 400 seats = £29,629 with £5333 margin
- 400 seats Office 365 £31,200 with £5,616 margin
- 400 seats Office 365 with Mimecast £53,050 with £9,926 margin
- Or 400 seats with Mimecast: £51,129 and £9,643 margin
- 400 seats Office 365 £31,200 with £1,890 margin
- 400 seats Office 365 with Mimecast £52,100 with £6,010 margin 318%
- Or 400 seats with Mimecast: £51,129 and £9,643 margin
- Eat your own dog food
- Selling Support
- And Services around cloud offerings
- Cross sell other Cloud Services- don’t lose budget
- Provide Due-Diligence to choose the right solutions
- Bring Cloud to the Customer’s network safely and smoothly
- Deliver On-ramp services, that enable customers to get to the cloud
- That Leverage Cloud and On Prem – “Hybrid” I hate that term!
- More focus on Business Consulting
- Customer Outcomes
- – not “how IT”
- but “Why IT”
- Double edged sword
- Cloud Represents a Perfect Storm for Channel partners
- Oh and subscription businesses are worth 2-3x a services business.
- The world is your oyster if you choose to adapt
- The Secrets of Successful Cloud Adoption: what they don’t tell you Cloud has a seemingly unstoppable momentum behind it- but is it clear at the outset what the benefits of Cloud are beyond the shift from cap-ex to op-ex? What exactly are these benefits and how do we access them to adopt Cloud successfully?