Integrating two or more applications in a productive way was once almost always a difficult and costly process, seemingly the preserve of enterprise-size organisations and large systems specialists with plenty of technical resources.
The advent of cloud computing has been changing all this inch by inch in ways which, if they don’t exactly herald the death of systems integration exactly, certainly suggest the field is now open to many more types of channel partner, and is no longer too high-flown a goal for smaller customer businesses either.
This is not just because cloud computing promises productivity improvements and cost reduction, but because getting cloud applications to work together and communicate back and forth can be much easier than doing so on-premise.
Mark Herbert, business development director at SaaS vendor intY, agrees that cloud does open up the market for integration and aggregation to some degree.
“It takes away the need to have racks of spinning hardware. But they still need to do the work,” Herbert (pictured, right) says. “It does open things up: more smaller companies can compete in the big-company space. It allows smaller players to punch above their weight.”
The message to intY’s channel is that if you are small, you can play in the mid-market, and if you’re medium sized, you can play in corporates.
Traditional SIs still have a role, he notes, it is just that there are more options, and smaller players will still need to focus on a niche – and reinvest in that specialisation – if not sticking to integration of the more generic cloud applications.
The likes of Dell and Fujitsu are cottoning on, and beginning to find ways to work with SaaS players such as intY, adds Herbert, because people are not buying servers any more. Even Intel has launched a branded hybrid cloud offering.
“SIs need to strategically rethink what they do,” says Herbert. “And they have had it relatively easy until now.”
Barrie Desmond, director of marketing and global accounts at distributor Exclusive Networks, says a whole new wave of IT-as-a-service is continuing to change the integration game in less “predictable and deterministic” ways than even a few years ago.
“I think the destination finally is some sort of aggregated hybrid infrastructure, and there is value to be had initially in getting people to go on that journey, and through that journey to that destination,” he says.
“What is value-add? Value is something I’ve got and you haven’t, and that is what the integration services need. Maybe integrators will provide a single pane of glass into this, with a view of some sort of business intelligence [software] model, to get that self-service.
"There will be some customisation needed to go on this journey.”
That is one approach channel partners moving into cloud provision could apply to develop their own value-add. Self service – as part of a more human-focused IT – that eases the way forward will be one key. It will not be about technology per se.
It may take several iterations – quite possibly, the early adopters might develop part of what is needed, allowing the later arrivals to take the prize – but there is a profitable path there to be followed.
“And at the distribution level as well, we have to adapt,” Desmond says.
Race to the bottom
Paul Byrne, chief executive of cloud aggregator and distributor ChannelCloud, says certainly there are emerging possibilities – although, potentially, too many resellers are taking the path of least resistance, relying on cloud apps that do not ultimately provide enough margin in themselves.
Byrne says the channel player striving to become a cloud company or managed services provider needs to be certain any value-adding to boost margin really does add value from the customer’s perspective.
“We see [resellers] going the Office 365 or Google Enterprise route, and we see this as a race to the bottom,” Byrne said.
“Resellers can bill it and add margin but Microsoft still has the central relationship with the end user, and that for me is a big wake-up call… I think we will see a lot of [reseller] failures in our industry in the next three to five years.”
Microsoft, he notes, recently announced an expansion into hosted desktops and cloud services – another area which may threaten the world of the VAR or services provider.
If there is not enough margin in the product itself, it is easy to understand why even a large vendor, historically reliant on many thousands of resellers around the world, might take that route.
Cloud is still the answer, it is just that resellers need to work that bit harder to find a business model that will deliver the profits. Byrne says that ChannelCloud puts together a multi-vendor, integrated cloud offering for its customers based on Citrix, Microsoft, and whatever the customer has in-house.
This kind of offering can be white-labelled through resellers, and is a good jumping-off point for a VAR slowly trying to evolve, he says.
Such offerings can be part of an overall VAR portfolio – in the short or medium term perhaps freeing up a reseller’s resources to develop its own cloud platform, services provider or integration capabilities.
Richard Britton, chief executive of cloud integrator CloudSense, confirms that his company has grown very quickly to 120 staff – suggesting the opportunities really are out there.
“We have grown more than 100 per cent in terms of revenue in a year. Last year we turned over $10m (£6.5m), and we are on track for this year,” he says. “We are seeing a massive demand.”
Traditional SIs, according to Britton, just cannot offer the same level of services in the same format.
Furthermore, providers need to be able to develop new capabilities, as required by the customer, essentially on the fly. Whatever the channel provides – be it services, integration or apps – it must happen faster than ever before.
The only way to do that, Britton says, is through cloud.
“With a [custom] iPad app [for example] by adding a PaaS layer, you can change things quickly,” says Britton. “Customers now need to see results within weeks.”
IntY’s Herbert had cited Fujitsu and Dell as vendors moving fast to cover their bases as the market evolves.
Fujitsu did not respond to enquiries, but Dell’s EMEA director of cloud services, Nick Hyner, was happy to speak about cloud integration and PaaS versus traditional SI.
“Dell is doing three main things around cloud. We are building clouds for customers and partners, and that is probably about 40 per cent of the enterprise infrastructure business in the UK,” he confirms.
“We help customers with cloud services and we provide cloud services from our own and from partners’ datacentres – including data-as-a-service, and compute-as-a-service, mainly to the mid-market and larger. And we are helping customers operate a multi-cloud environment.”
Recent acquisitions, such as Enstratius, Quest and Boomi were all geared towards boosting Dell’s cloud offering – and there will still be a role for value-added partners of various kinds, Hyner indicates.
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