As the IT industry moves from traditional on-premise solutions towards cloud-based and virtualised services, many resellers are struggling to position themselves and their existing product offering.
Many are losing confidence in their services fit and are failing to evolve in line with customer demand. Those not yet considering cloud and virtualisation technologies are at serious risk of falling behind. A number of high-profile resellers have recently entered administration.
However, striking up a relationship with the right cloud vendor may transform any reseller's falling sales into booming trade. Few resellers can justify spending on the construction of a private datacentre, but whitelabelling arrangements can be set up within weeks.
That is all very well. But placing trust in a third party, knowing that one wrong decision could put you out of business, cannot be easy.
Resellers should develop relationships with cloud vendors that have already established themselves within the industry as trusted partners. Choose a company that has dedicated time and effort to partner relationships, and has experience in working with VARs and ISVs.
VARs must also appreciate what type of licences could be required. You can avoid the trouble of learning about it yourself, by selecting a cloud computing partner that already has the necessary licensing expertise.
A partnership will only succeed and have appeal if both partners can readily identify a benefit both to themselves and to their target market. The whole must be greater than the sum of its parts.
The reseller must be able to take advantage of the cloud provider's technical expertise, facilities and experience, while the cloud vendor can enjoy greater market penetration and access for its customers to complementary offerings.
Engaging in any partner agreement requires commitment to the new way of doing business. This may well require a reshaping of practices and business models on both sides.
Having said this, both sides should stick to what they know, notwithstanding any potential need to change business models.
Partnering with a cloud vendor is a great way for a reseller to make more margin. Once a reseller becomes involved in a partner network, the scope for business expands considerably.
Partnering with businesses that operate in different verticals, industries and markets will help the reseller expand even further.
A reseller walking into a room with a partner and the partner's long-held customer is more likely to close deals than would be the case if the reseller were operating independently and pitching to the same client out of the blue. The partner has access to the history of that customer and may be in a position to share anything pertinent with the reseller.
Resellers are rightfully wary of cloud vendors that promise to transform their businesses. What if there is little return? Indeed, resellers have lost customers to large hosting providers in the past. So choose cloud vendors that promise customer contracts will stay with the reseller. The reseller knows the customer's history, quirks and requirements.
Keith Bates is chief executive officer of the Cloud Computing Centre
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