Transformation in the Channel
For managed service providers (MSPs), value-added resellers (VARs), system integrators (SIs), distributors, and consultants – collectively referred to as the IT services channel – the rise of cloud computing represents a fundamental transformation of their business models. Public clouds in particular provide straightforward, pay-as-you-go self-service IT infrastructure and all manner of business applications – long the purview of the channel.
The good news for channel players, however, is that the channel is here to stay. Just because the cloud is self-service doesn’t mean there aren’t just as many opportunities for the channel than there were ten or twenty years ago.
One of the cloud’s primary value propositions is its self-service aspect – and in fact, self-service access to technology capabilities is a hallmark of digital applications across all industries. However, there are only so many tasks an individual might perform in the cloud in the context of a business-to-business interaction that doesn’t require broad-based technical expertise in addition to self-service capabilities.
But while the cloud hasn’t eliminated the channel, it has transformed it to its core. Even though cloud computing still represents only a fraction of total IT spending, the cloud is rapidly changing both technology delivery and consumption models. As cloud adoption grows, such transformation will continue unabated.
Before the cloud, VARs made money by combining hardware and software into solutions, and then they would augment their product-centric revenue through professional services like technical services and maintenance support. Today, in contrast, the rise of the cloud has limited the market for physical products like servers and shrink-wrapped software – but customers still need servers, and they still need software.
Over the last few years, the IT channel has adopted cloud services either as hosted products, or it has resold services to capitalize on new opportunities. And most of all, customers still need the professional services as before, only now the services are more likely to involve cloud-based assets than physical ones.
Read the entire white paper at https://app.box.com/whitepaper-cloud-brokerage.
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