Don't wait any longer for cloud adoption

Phil Gunning says the channel has to embrace cloud services now or risk being left behind

A Cloud Industry Forum survey, Cloud: The Critical Role of Channel in Driving Cloud Adoption, has claimed that only 63 per cent of the UK and Ireland channel say they are offering cloud services, up two per cent from 2010.

But you only need to have read any magazine, online or printed, or been to a trade show to see a giant shift towards cloud computing in those 30 months. So how does this translate to a mere two per cent change in the channel?

I find it hard to believe that 37 per cent of the channel does not offer any cloud-based services. How can any business not have aligned itself with cloud-based CRM, backup, disaster recovery or email services, even if they do not want to get involved in full-scale IaaS?

We all know the story here; there are a number of reasons. First of all, the channel is used to selling hardware and enjoying those lucrative refresh cycles every 36 months. And there is a fear that the partner will not be needed any more in a new cloud services-based world. Thirdly, sales teams do not want to sell cloud services – although they are happy to use the buzzwords to open a door.

Until now, it has been just about possible to continue to sell hardware refreshes. Perhaps one of your customers did an upgrade in 2011, and did not feel that cloud offerings were sufficiently mature. I can understand that, but what happens in 2014 as adoption rates continue to rise faster within customer businesses than in the channel?

This is often a difficult pill for some companies to swallow, but those big hardware sales are going to happen less and less often. Even if the costs are identical for a cloud computing service and for a hardware purchase, what would you rather pay – £100,000 all at once or the same figure in monthly instalments, with the ability to change the offering if required?

And if you can see past this shift, there are lots of positives. Income from cloud services is steady, reliable and often offers better margin than hardware sales.

And it is not the case that by selling cloud services the channel will become irrelevant. If you chose the right IaaS partner, you will still be delivering all the support you always did from the OS up, but you now have a partner who has to make sure the VMs are up and running all the time, because their reputation depends on it.

Again, if you find the right partners, you can build an even stronger relationship with your customers, adding additional services, making sure they are getting value for money.

With all but the most simple, consumer-ready SaaS, someone is still needed to manage the cloud service. IaaS replaces the need for hardware on site and gives customers the flexibility to scale up for busy periods and down when business is slow.

In fact, on an operational level the channel needs to start learning how to manage cloud services, compared with a traditional on-site setup.

Sales teams are always keen to have something innovative to take out to customers. It makes their job much easier, but unless you are remunerating them appropriately, they will not make the effort to sell.

I know of at least a couple of very large businesses that are making a big internal effort to shift to cloud services and are offering commission accelerators to their sales teams to make that happen.

And those who do not make the push now will end up missing out to competitors when they try again to push single, big-ticket hardware sales over IaaS and other cloud services.

Phil Gunning is channel manager at Databarracks