Cannibals not welcome
Dale Vile looks at cross-selling opportunities in the cloud that can help channel firms survive
The notion of cloud computing taking more of the action in the market is of concern to resellers, system integrators and others in the IT channel. Service providers selling directly to end-user organisations can create confusion, and misguided direct models can give rise to unsustainably low-priced expectations, leaving little room to move margin-wise when the provider eventually figures out that the channel matters after all.
The fear is that solid, upfront payments from customers for hardware and software will be replaced by income that merely trickles in over an extended period of time and ultimately adds up to less. No cannibalisation is required.
Whether it makes sense to embrace cloud hosting in your core business sooner rather than later depends on what you are selling and to whom. If delivering more complex software apps that lend themselves to on-premise deployment because of integration requirements, there is less need to rush.
If your centre of gravity is commodity software, though, it is worth looking at utility services sooner, since this where a lot of the cloud action is unfolding.
The appetite for utility-style SaaS, by which we mean services that can be adopted with relatively little customisation and integration, might threaten some companies but can also represent an incremental opportunity. Such services often complement on-premise offerings very nicely, which is interesting when you consider that many customers tell us they are taking a blended approach to IT, working SaaS options into the mix selectively.
The upshot is a clear cross-sell opportunity. An example might be adding Mimecast's email archiving service into an Exchange upgrade exercise. Archiving is generally underappreciated and poorly understood by IT professionals outside large enterprises. Cloud archiving is easy to understand and buy, however, and can also add benefits.
With Mimecast, it is possible to provide user access to a cloud-based email repository via laptops, slates and smartphones. This reduces the need for huge PST files and other local email stores, which lowers management overheads and improves security.
Other channel-friendly players deliver data management and data protection services. Symantec is one of these, and has created a single portal that partners can control, bringing multiple services together in one place - also neutralising the commercial impact of choosing between cloud and on-premise.
Winning by increments
Whether you start with data protection or end-point security as part of a cross-sell from a desktop upgrade deal, the idea is that new cloud functionality can simply be switched on with the minimum of fuss, paperwork and immediate cost.
A less obvious example of an on-premise to cloud cross-sell opportunity is from a server deal to Office 365, which sounds a little odd until you consider that Windows Server 2012 comes with a set of hooks into Microsoft's cloud service offerings. You may not be able to persuade the customer to go for a full-blown Exchange upgrade, but by positioning a cloud service with greater functionality as something you can include as you refresh part of their broader server landscape, you just might get a bite.
These examples give you a flavour of what is possible as the market for more utility-style SaaS develops. There are also channel opportunities with emerging providers - such as Mindjet with its lightweight project/work management offering, a good cross-sell from a Microsoft desktop upgrade; and Moorepay, with its Moorepayhr service that includes access to HR and payroll expertise so you can move up the value stack without having to worry as much about the specialist business skills.
The important point is that it is incremental business, giving you a chance to embrace cloud options while minimising disruption to core revenue streams.
Dale Vile is an analyst at Freeform Dynamics