Westcon deal underlines cloud distributor value

Distributors are continuing to play a relevant role in the brave new world of cloud, writes Michele Pepe

A report from industry body CompTIA foresaw earlier this year that distributors will continue to play a pivotal role in the cloud services arena.

Westcon Group's recent acquisition of Verecloud in the US offers further testimony that CompTIA's insights are proving right on the money.

Under the terms of the deal, Verecloud will become part of Westcon's Cloud Solutions practice, to be headed by John McCawley, former Verecloud CEO.

Verecloud brings to the table a carrier-grade cloud-services aggregation and brokerage platform that will sit at the crux of Westcon's cloud digital distribution solution.

"Westcon Group and Verecloud have ... co-developed a truly differentiated cloud go-to-market capability for the channel," says Dolph Westerbos, CEO of Westcon, Tarrytown, New York state.

"Coupling our channel cloud enablement services with the Verecloud acquisition will [allow our] Cloud Solutions [group] to drive the business models of tomorrow."

While there's been speculation in recent years that the cloud could disrupt the channel -- two-tier or otherwise -- by making it easier for vendors to sell directly to end users, both solution providers and disties appear to be reaping the benefits of the cloud.

According to the CompTIA survey and whitepaper, the most popular cloud-related service that VARs are seeking from distributors is support, cited by 57 per cent of respondents.

Thirty-five per cent said they turn to distributors for aggregation, datacentre capacity, or hosting; and a quarter want help with brokering relationships.

The report also pointed out that cloud vendors generally prefer to team up with distributors over other vendors for hosting, lest those vendors turn into competitors for cloud mindshare.

"While the Amazons and Googles of the world certainly have the datacentre might to handle most vendors' hosting needs, they also compete directly with those same vendors on many cloud services offered," the whitepaper saus.

On the other hand, "vendors and distributors ... have been working together ... for years in a supply-chain or go-to-market relationship. There's less chance that distributors plan to steal cloud app market share by rolling out their own set of productivity apps."

Interestingly enough, Ingram Micro did just that in April of this year when it became a cloud vendor in its own right.

At that time, the broadline distributor unveiled three home-grown cloud services-virtual private servers, hosted Microsoft Exchange email services, and web hosting services developed in response to its 2013 acquisition of Softcom.

Other distributors remain content, and profitable, as middlemen, at least for the time being.

Just a few examples. In June, Tech Data inked a deal with dinCloud, allowing it to offer channel partners dinCloud's offerings via TDCloud. Arrow has been talking up its cloud aggregation plans for quite some time now.

And Avnet, with its SolutionsPath CloudReady practice, offers a portfolio of tools and resources for channel players that want to boost their cloud expertise and profitability.