Developing relationships
ISV partnerships may prove a crucial part of the puzzle when it comes to entering the cloud market, finds Fleur Doidge
Smaller ISVs appear to be rising from relative channel obscurity to become crucial links in the supply chain for cloud. Once, it was primarily software giants such as IBM that hovered, ever hopeful for the next profitable acquisition or essential innovation, but ISVs are now engaging directly with the channel on SaaS.
Simon Draper, founder and chief executive of security as a service developer ResolutionsMSP, which launched in EMEA in January last year, says web based offerings that can be supported anywhere have a real advantage in today's market.
"We have gone down the distribution route, signing up with Avnet," Draper says. "They are big, and efficient to deal with. And they bought Bell [Micro], who were really good, entrepreneurial people."
Distribution is still valuable even in the cloud, particularly you are an ISV closely focused on development but perhaps with limited resources or inclination for the sales arena, Draper suggests.
"We are currently working with 10 or 15 partners, although it is early days. We have signed up customers already in the UK, mostly SMBs, but we are looking to recruit and work with new ones," he adds.
It has developed SaaS endpoint security, back-up, and a cloud platform - with more offerings to come. It has a UK datacentre and code cutting is done in Arizona. ResolutionsMSP bills monthly, because SMB end users prefer it and can focus on their specific needs for that month rather than keep dipping in and out of the offering, Draper says.
"We are big in churches and charities," he said. "It lends itself to people who don't want to part with all their cash straight away."
Endpoint security is delivered remotely to clients whether they are on the internal network or not, and can be easily monitored from the web console by the reseller and the service provider. Online backup is automated, with encrypted copies stored in two redundant sites hundreds of miles apart and restores achievable 24/7.
The SaaS offerings available for many verticals and horizontals are diversifying. There is everything from hosted PBX - such as inCloudOne - to digital signage as a service - such as Remote Media's Signagelive - as well as numerous online backup and archiving options. As ISVs explore more possibilities and develop new hosted applications that exploit specific market niches, the chance for the channel to play along also increases.
Many ISVs are still forming partnerships or being acquired by market giants such as HP, VMware and IBM. Alexis Richardson, chief executive officer of RabbitMQ and now a senior director at VMware, says his company developed an enterprise messaging system based on the Advanced Message Queuing Protocol (AMQP). It's a tool developers can use to create messaging applications.
"It was an ISV that I set up, and it was acquired [by VMware] about a year ago," he says. "We quickly found a niche in the market."
This is not about things like Gmail but middleware that assists with scaling, offloading work, integration, monitoring, event handling, routing, and other networking tasks.
Development of tools and applications that enable the integration of other applications and ease inter-application communication are critical for cloud in part because cloud abstracts the computer systems from the physical location, and to some extent the end user.
"So it's about service levels," says Richardson. "Everyone needs to get a good user experience, and that's really where providers need to design the app so they can have as many users as a business demands, and grow very quickly - perhaps to many 10s of 1,000s in just a day, if you want a real ‘poster child' example. People need to know that their app can change over time."
Aligning to customer needs
It is all about aligning IT more closely to customer needs. VMware has seen the value of this, and it acquired the firm as part of its own transition into PaaS offerings. RabbitMQ remains available to developers - including, of course, the more technically sophisticated channel players that do integration or work on their own solutions.
Chris Gabriel, marketing and solutions director at Logicalis, has been beating the drum for the company's own campaign to attract ISV partnerships - particularly around public sector cloud opportunities. He says ISVs are more important to the channel than ever before.
"Although it does depend what bit of the channel you're in," he adds. "For us, having our own datacentre and own cloud, working with things like [education network] Janet, ISVs are incredibly important."
Business analytics are a particular area of demand, he suggests. And Logicalis has been putting its money where its mouth is, buying IBM's largest UK Cognos partner recently. People buy computers so they can run the applications they find useful to them - so those applications need to be created, notes Gabriel.
"We are having an ISV open day in May," he adds. "People want the apps, and in our business we are really big on collaboration and UC, and we are on the Cisco adapter Quad programme, and have had an IBM Lotus practice for a while. For us, they are core."
Logicalis looks to work symbiotically with ISVs that can help it innovate more rapidly- such as do better collaboration for the private-cloud focused Virtual Compute Environment (VCE). This should also ultimately increase efficiency and cut costs for public sector customers.
"If we didn't add value and build partnerships, I think we would risk getting ever more isolated, rather than ever more joined up," Gabriel says. "And a lot of small businesses that are good at innovation and development are really bad at sales."
Ben Abraham, UK services divisional leader at Avnet, says it's an evolution rather than a revolution but ISV partnerships are definitely moving towards centre-stage. Avnet is aiming to facilitate those partnerships, not only helping ISVs get in front of the channel but helping VARs move more quickly beyond their own in-house expertise. It has about 50-70 ISV partners currently.
"We have got a programme called PartneRing, in reaction to most of the ISVs being in vendor-led programmes that distributors then got involved in. This is an Avnet programme," he says. "We are testing and sharing opportunities and this works both ways - it is critical that there is a joint approach and business plan."
Historically, the time to market for a new solution would be very slow. Also, margins are "healthy", he adds, with prepay available with a reduced margin to account for the increased risk. Lease arrangements with finance companies are also developing.
"The reseller needs no experience with SaaS, but they do need to understand the proposition of the technical offering they take to market. But the perceived pain of managing SaaS - the billing and so on - we handle that with the service provider," he says. "And with cloud, you can have the discussion in the morning, a demonstration by lunch time and potentially have an order the following day."
Logicalis feels a connection with Janet>> www.channelweb.co.uk/1937862