Hurdle or pole vault?
For David Dixon, the director of Ozefax, which runs a cloud storage offering called OzeMozy on EMC’s Mozy platform, one of the biggest challenges lies in identifying the right cloud.
“We're not directly involved in 'developing' cloud-based solutions, however we do expend a great deal of time selecting a provider who we believe will deliver a high-quality service that our client database will find valuable for their own business operations,” Dixon said.
“One of the hurdles in this selection process is simply the growing number of providers who purport to offer a specific solution. We have the experience to be able to 'weed' out those services that would not 'cut' the bill for our own clients, thereby eliminating their research time and allowing them to continue focusing on their business operations. We inherently take on the support role and convey this information in simple terms.”
As is clear from Dixon’s approach, with relative immaturity in both the user and provider realms comes an opportunity to advise and derive consultative revenue.
Without a doubt, the biggest hurdle channel partners face is market maturity and trust, Microsoft developer and platform strategy director, Gianpaolo Carraro, said.
“However, momentum and time are on their side, as things are improving each day as more and more businesses begin to understand the cloud and gain confidence in working in this environment,” he said. “Early entrants to the cloud computing space are likely to sustain competitive advantage as the market matures.”
Ensuring this advantage is retained should not only be based on the initial advisory role and price. One of the key issues with cloud competition that often raises its head is the battle for customer loyalty through service level agreements (SLAs).
A promise of cloud computing is the ability for customers to easily and quickly change providers when they need or desire to. And while there are some barriers to this goal because of lock in and a lack of standards across cloud providers – for instance it is not that easy to migrate your data from one storage provider to another – there is considerable energy being put in to make it a reality.
As a result, many suggest the battle for cloud customers will not be over the kind of technology platform being used, but rather the service being offered.
“Building the right service involves understanding the needs of the market, while cost depends on the infrastructure deployed to deliver the service. The cheaper the architecture underpinning the service, the cheaper it can be offered,” Novell’s Kangro said.
“SLAs can also be used to compete in the marketplace. Offering better SLAs for the same service may prove more attractive to clients than cheaper prices. Managing your service to allow easy measurement of SLAs, as well as the inclusion of automated actions to ensure SLAs are met, will be a key differentiator for providers.”
An added challenge, however, is the internal changes that must take place and be accepted for those channel players used to getting their revenue from hardware and software licensing sales. These could even those already in a service or consulting operation. In short, the revenue model must change to a subscription based one, often just on a monthly basis.
"Traditionally, companies earn revenue based on a perpetual licence rather than an on-going subscription model,” Google partner and Devnet managing director Craig Deveson, said. “So while the customer acquisitions costs are the same, the reality is you're almost certainly going to make less money in that first year you transition to the subscription-based model."
A new set of skills
Like the changes in business model, cloud computing can demand a new set of skills within the workforce, particularly if the channel player is setting up their own infrastructure to use as a service platform. It’s also disruptive because of the Web-based realities of the cloud landscape.
“When you move to the cloud computing paradigm, you're working with Web-based technologies rather than the traditional desktop or client/server tools,” Devnet’s Deveson said. “The business challenge is to be able to keep training new staff in these ever-changing technologies and languages. Also, because you're revenue-per-customer is generally lower, you need to build a support infrastructure capable of managing more customers without increasing your staff numbers."
Managing the customers also means being able to provide the detailed ins and outs of the new service you are considering providing. For OzeMozy’s Dixon, this means stepping back from any ideas of being an “expert” for a moment.
“I guess this would involve stepping outside the 'developers' role, wearing a 'dummys hat' and start dissecting the application, beginning with 'Installation',” he said. “This is probably best achieved by offering free versions initially of your application to users, encouraging feedback and determining from those suggestions, which offer a nice balance between a wider benefit to the majority of users and commercial appeal.”
Whether you look to offer email, collaboration tools, storage, website hosting, customer relationship management (CRM), human resources solutions or any other kind of cloud offering, getting over the above hurdles should be a factor in any gameplan.
Some may continue to wince at the thought of cloud computing as a serious option in the ICT business landscape, but for those happy to take on the new challenge, now is the time to tender the seeds and nourish the shoots.
