Dale Neilly, Radiant’s VP of Sales was invited to present at the ChannelNext conference a couple of weeks ago, followed by a short interview seen below.
The presentation was a quick overview of cloud infrastructure but the theme was to engage the VAR community and identify what their role can be in the cloud ecosystem.
The Cloud VAR Dilemma
Most VARs have been struggling with the same issues around cloud computing that traditional software vendors have been up against. Their business model is about to change and they are unsure when to begin and how to manage that change.
- Commissions on the sale of software and hardware: The up-front revenue source from reselling on-premise hardware and software has always been a big boost to the bottom line. In many of the pay-as-you-go cloud models, there is no up-front sale so the commissions or residuals are smaller and are paid over time.
- Installation, customization and day-to-day management of the software: This has always been the bread and butter in the VAR world. On-premise software and hardware often required as much or more in the way of service contracts as the initial purchase amount. In the cloud world, there is no installation. Customization and day-to-day management are also minimized.
With the entire revenue model in jeopardy, most value added resellers have been slow in recommending cloud solutions to their customers.
The time is now
In the last 6 months and even in the couple of weeks since the ChannelNext Central conference there have been a number of happenings in the cloud ecosystem that make it clear now is the time for VARs to embrace cloud services and build a new business around them.
- Amazon Outage: This outage has made it abundantly clear that businesses need help with their cloud strategies. What cloud services are best for them? What are the risks and how can they be managed? How can cloud services be integrated with the business? There is a clear opportunity for expertise to be offered around the adoption and integration of cloud services.
- Consumer Cloud Message gets Stronger: In 2011, the Microsoft cloud message is turning up everywhere and even aimed at the consumer market. In June 2011, Apple launched their iCloud consumer service jumping on the cloud message bandwagon. These consumer cloud messages matter in the business cloud computing world because customers are now asking their VARs and consultants about cloud computing. How can we make use of cloud computing? Is it cheaper? Is it right for us? How can we start?
Why is now the time to figure out what your cloud opportunity is as a VAR? We now have three things coming together:
- Cloud growth: Nothing new here. It continues to plow along quickly. All the large incumbent software and hardware vendors are now unveiling their cloud strategies. The early adopting customers are well into figuring out how to take advantage of cloud services on their own.
- Opportunity: The highly publicized Amazon outage and the pervasive consumer cloud message means your customers will be asking you about cloud computing. What will your answer be? Will you be able to provide services that help them adopt cloud computing safely or will they find someone else?
- Timing: The business around reselling cloud services is about building up a recurring revenue stream. The VARs that get started early will be the winners here as it will take some time to build a profitable resale revenue stream.
As a value added reseller, make 2011 the year you roll out your cloud strategy.
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