Report: Distributors can be the nexus of cloud computing

Channel's middlemen urged to invest in datacentre capacity

A report into the effect cloud computing might have on distributors has concluded that the channel's middlemen should still be sorely needed by both VARs and vendors if they play their cards right in the next few years.

A recent survey and whitepaper from industry body CompTIA finds that there is no reason why disties should not retain an important role in aggregation, hosting, and support of cloud services. The chance for distributors to move into offering datacentre capacity and hosting services is picked out as a key opportunity.

Asked what cloud-related services they want from their distribution partners, 57 per cent of VAR respondents said support. This was by far the most popular type of service, some way ahead of aggregation on (35 per cent ) and datacentre capacity and hosting (also 35 per cent).

A quarter of respondents wanted distributors to undertake relationship-brokering services with other providers or resellers of cloud services, while 23 per cent claimed they would continue to use distributors in a cloud world as they can offer a single bill.

Some 17 per cent want credit or financing options from their distribution partners of choice, while one in ten want white-labelling facilitation. The whitepaper also reveals that a total of 90 per cent of resellers and vendors have maintained or increased their engagement with their distribution partners in the last two years.

What's more half of respondents - including three quarters of vendors - believe cloud will have a positive effect on distribution. A further three in ten feel the impact will be negligible, and just 13 per cent anticipate a negative impact.

Host with the most?
A number of distribution players, including Arrow and Azlan, have talked up their plans in the field of cloud aggregation in recent months and years. Meanwhile Westcoast recently invested £1m in opening its own datacentre, in an apparent first for the UK distribution space.

The move was backed by HP and Microsoft, and CompTIA claims that distributors might represent more attractive hosting partners for cloud vendors than the huge market incumbents, who might offer competitive applications or services.

"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 offerered," says the whitepaper.

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

Much has been made of the declining margins inherent in the IT distribution sphere, but CompTIA claims that revenue and profitability levels compare favourably with wholesalers in any other industry. The industry body adds that the cloud world requires "a new type of provider" that can aggregate services from various vendors and provide security, reliability, and increased scale - across both virtual and physical worlds.

Carolyn April, director, industry analysis at CompTIA, said: "For the past 20 years, no one type of company has done that better than the industry's wholesale distributors. If they play their cards right, they could position themselves as the nexus of cloud computing."