From The Editor | April 23, 2010

Finding Opportunity In The Cloud


By Gennifer Biggs, security, storage, and managed services editor

One hot topic at the Ingram Micro VTN event has been finding the opportunity in the cloud if you are a VAR or MSP. Justin Crotty, VP of services at Ingram Micro, presented on just that topic on Thursday. Later in the day, he and Jason Beal, director of sales, services, sat down with me to talk cloud.

One key message from Crotty's presentation was not confusing ease of acquisition with ease of application. In other words, just because an end user can go and access a service through the cloud doesn't mean the solution is quick and easy and there is no room for VARs. Rather, the channel is key to helping end users find the true value in those cloud-delivered services.

"If anything, these solutions can be more complex and more confusing, and there is a lot of heavy lifting involved in fully utilizing the solutions. That is the role of the VAR," says Crotty. Not only does he believe VARs should get educated in order to better leverage cloud-delivered solutions, he wants them to consider their role in integrating those solutions with legacy technology on-premise. That is especially good advice given that most research firms expect customers to adopt a hybrid approach to technology, with some solutions in the cloud and some in the server room.

Beal adds that many VARs are still struggling with the sales pitch for cloud because they don't know how to talk about it in terms of solutions rather than "cloud computing." But helping them along is strong customer awareness, which should open some doors for VARs and MSPs. "Resellers have a better opportunity with the cloud than when we all started talking about managed services, which was a nebulous industry term that end users didn't understand," he says.

The two agree that resellers must sell a solution to end users rather than "the cloud." "You need to talk to them about value, not the delivery model," says Crotty. "You can leverage the term ‘cloud' to get their attention, but in the end it is the solution you are selling."

When asked to forecast the impact of the cloud, Crotty says solutions providers must take the cloud into consideration; it's going to have an impact on their business. "I think the cloud will be significant enough in the next two years that providers need to offer those options to their customers," he says.

As for the impact of cloud on the revenue flows of providers, Beal says there may be some pain for some VARs. "MSPs that have already adjusted from the big pops they used to get on projects and products are ready and willing to leverage the cloud; they are used to the recurring revenue model," says Beal. "But for those VARs that are still selling on projects and products, there is going to be some short-term pain as they move to the recurring revenue model that comes with the cloud. But they have to adjust. And in the long run, they will make more money."

How? Don't line item your services and cloud offerings; rather, bundle your offering into one package, propose a monthly price, and your customers will be less likely to shop you — a message reinforced by Tiffani Bova, Gartner research, in her presentation about the state of the market. (Read about her presentation here).

Want to learn more about the cloud and the value propositions working best for your peers? Ingram will be hosting a Cloud Summit on June 7 in Dallas. Attendees will be exposed to training, education, user cases, and strategic and tactical assistance to help capture opportunity in the cloud.

Listen to Jason Beal's advice on selling cloud-delivered solutions.

Listen to Justin Crotty talk about successfully adding cloud-based solutions to your IT line card.