Cloud or bust
As the entire channel tries to work out if and how it wants to become a cloud player, we talk to eight of the UK's biggest VARs to see if they are blazing a trail
The IT industry seems to have long since decided that the last one to the cloud is a rotten egg.
Pretty much all resellers may have at least started the journey, but the routes being taken, and what VARs expect to find along the way, seem to differ greatly. ChannelWeb talked to senior figures at eight of the country's top integrators to find out if, and how, they intend to lead the cloud charge from the front.
The word that cropped up most frequently was "industrialisation". Simon Daykin, chief technology officer at Logicalis, claimed that, for a year or two, investments in cloud can be seen as a loss leader.
"One of the key aspects to a cloud strategy is industrialisation, which can only come after the first round of innovation, once you have built up your service platforms," he said.
Rhys Sharp, chief technology officer at SCC, agreed that the standardisation, industrialisation and automation of your capability is absolutely key to the cloud world. "It drives out cost and improves consistency and capability," he said.
But Nick Grossman, business development director at 2e2, stated that his firm is seeing the bulk of activity and demand in more bespoke approaches.
"There are complex solutions in there that are not suitable for deployment in [an industrialised] way. Certainly not at this stage, and I am not sure they would ever be," he explained.
Invest for success
Most companies pegged their investment in cloud so far as being at least an eight-figure sum. SCC reports its investment in datacentres, new personnel and man-hours stands at more than £35m and rising.
Many revealed that early investments and offerings would build on long-standing competencies. Ashley Gatehouse, EMEA vice president of marketing at Insight, stated that his firm's cloud sales would initially revolve around SaaS.
"It can be expensive to crusade. We need to ensure we have a compelling offer at the right time for the right number of our clients," he added. "I have no doubt that we will continue to invest, particularly in the SaaS play, for the next year or two and then, as the volume of demand increases, in other areas."
Andy Eccles, chief technology officer at Kelway, said that its investment for this year is in the multimillions of pounds.
"There is such a large amount of investment required, I wonder how our competition is viewing that requirement," he added. "We have lots of discussions with other resellers, and those lines of communication will remain open. It will be interesting to see how the possibilities around white-labelling develop over the next year to 18 months."
Dimension Data, which recently launched a wide range of compute-as-a-service (CaaS) cloud offerings and consultancy services globally, is looking to work with a handful of partners.
UK managing director Calvin Goom said: "We are making it available for tier-two and tier-three service providers. It is a section of the market we want to be able to address, though I would not say it is our primary route to market."
Almost all the UK's top resellers agreed that gearing up staff - particularly the sales force - to operate in a cloud world is crucial to success. Paul Casey, practice leader for cloud, virtualisation and automation at Computacenter, explained that he had worked to ensure his firm made it as commercially attractive to sell a cloud service as it is to sell infrastructure hardware.
"When we were working on our cloud strategy, everybody thought the number-one issue in my risk plan was going to be technology, but actually it is pay plans. Salespeople are coin-operated, aren't they? Typically these things have longer sales cycles as well. We had to make some modifications to allow people to campaign and take customers on a journey," he said.
Product sales unaffected for now
Most of the UK's leading integrators seemed to agree that, at least for the short term, cloud need not affect product sales. Daykin at Logicalis said that "if anything, cloud is improving" product sales, as enterprises invest in the requisite private cloud infrastructure.
Sam Routledge, solutions director at Softcat, claimed that his firm will augment our on-premise strength with cloud services, where appropriate.
"I have been in the industry long enough to remember ASPs, which were going to wipe us out within two years, and that did not happen; there is still room for the traditional play," he said.
"That might diminish over time, and we will find a slightly new business model over time. But we will not pivot on the spot and magically become a cloud provider overnight."
Below is a more detailed breakdown of how our eight players stack up against each other.
2e2 - Pedigree
* Claims more than 30 per cent of revenue is cloud-based
* Points to its security, networking and comms credentials
"We stack up well against competitors, we have been doing it longer than some. That may not give us an advantage forever, but our foundation and heritage puts us in a very strong position. We have a large number of clients taking cloud delivery from us, and can point to some quite complicated business implementations, some of which have been working for two years or even longer. I think that stands us in extremely good stead compared to people that may have entered the market more recently."
Nick Grossman, business development director
Computacenter - Independece
* Now generates more profit from services than product
* Claims its operational and cost models can allow it to beat rivals on expeditiousness and price
"Solutions we have built and are building are very much designed and shaped with our customers. If you look at CSC, they are very much dependent on the V-block. Logicalis are very much dependent on what CA does in the market. If the market shifts, we can change. Our cloud proposition doesn't just do infrastructure-as-a-service, it does platform-as-a-service and software-as-a-service. I think we will be lower cost and we will have a stronger roadmap."
Paul Casey, practice leader for cloud, virtualisation and automation
Dimension Data - Reach
* Recent global rollout of range of CaaS offerings and related services
* Boosted cloud credentials with OpSource acquisition last year
"Our competitors are all very capable companies. But, for us, one of the key differentiators is around our global capability. Our Managed Cloud Platform is a global architecture so we are immediately able to offer that global cloud."
Calvin Goom, UK managing director
Insight - Familiarity
* Worldwide cloud deployments totalling more than one million seats
* Wants to aggregate its own services with those from major partners and provide customers with one bill
"When people go into the cloud, they see lots of services providers that they have never heard of before. We will make sure that all the brands they expect to see are in there. We want them to be able to procure and provision in real time online. We will give them one bill with all their usage; they only have to do one terms and conditions with our provider."
Ashley Gatehouse, EMEA vice president of marketing.
Kelway - Transparency
* Intent on becoming the UK's number one mid-market IT services provider. Target of becoming entirely services-centric in the near future
* Wants to allow customers to monitor the performance of their cloud services and applications in real-time
"We will be releasing to our customers full quality-of-experience metrics; you need to believe we are trustworthy. We are going to show you [the real-time performance of your service] in an easy to understand way - and not just your CPU usage and disk space. We are able to not only able to offer our own services, but aggregate others on top of that."
Andy Eccles, chief technology officer
Logicalis - Enterprise
* Launched dedicated cloud division in 2009
* Claims it is one of few to have a full enterprise grade cloud platform, and has enjoyed success in the higher education space
"We have been competing with the heavyweights in this space and are seen as a clear leader. We are not just offering virtual machines, we are offering an enterprise-grade cloud platform. [Suggesting we are too reliant on CA] demonstrates a little bit of naivete. CA gives us the architectural capability, and it is not just on the product side, it's how we invested in it. A lot of what Didata are doing is a ‘me-too'."
Simon Daykin, chief technology officer
SCC - Government
* Claims it continues invest, having spent more than £35m so far on technology and personnel
* Has attained a raft of government accreditations to position itself ahead of rivals
"For the public sector, we are a privately owned UK company with a UK-based datacentre. We have absolutely no issues around the Patriot Act or problems with where the data is held. For enterprises, we are a 30-year-old-plus company, with on-premise, colocation and managed hosting skills, and we have relationships with public cloud providers such as Microsoft and also Google. We have an award-winning green datacentre and can offer carbon-neutral services."
Rhys Sharp, chief technology officer
Softcat - Complementary
* Cites its strength in virtualisation, software asset management and licensing and private cloud building as potential cloud plays
* Believes strategic partnering will be central to its cloud offering
"We did not do what a lot of organisations did and say ‘we are going to stop being a reseller and start being a services company'. We have augmented our product business with services, and we will do the same thing with cloud. We are never going to have a service that will compete with Computacenter. They target the enterprise space, and we do very much target the SMB space. We wouldn't benchmark ourself against the big boys. I think cloud is a long play and, to some extent, taking a little bit of a watching brief is a sensible strategy."
Sam Routledge, solutions director