Can’t Live with ‘Em, Can’t Live Without ‘Em:

March 28, 2011 at 1:57 pm Leave a comment

Vendor/Partner Cloud Engagement Models Emerge

by Beth Vanni, Vice President

With both vendors and channel partners jumping on the bandwagon to evolve their services sales and delivery models to reflect a more holistic support offering to the customer, cloud solutions continue to come into the limelight.  And, despite the industry FUD about solution provider disintermediation in the cloud era, current research indicates vendors will continue their dependency on solution providers for customer management around cloud solutions.

The results of our 2011 State of Partnering Study reinforce the importance of close sales and support coordination between vendors and solution providers in promoting both public, private and hybrid cloud solutions in today’s market.  With input from 100 unique vendors, this year’s study results indicate maturing cloud delivery models among the IT vendor community, and expectation for partner involvement are coming into focus.

The majority of vendor respondents (53%) have formulated strategies to provide cloud services directly to end-users, with partners as either agents or brokers (27%).  In this model partners still have to find prospective customers, have the public, private or hybrid cloud conversation and scope the type of service(s) required.  Their role in end-user evangelism of SaaS, PaaS or IaaS offerings will be what it’s been for every other major technology innovation in the last 30 years – especially with SMB customers, who the vendor community has increasingly abdicated to partner coverage.

To the surprise of some, over a quarter of vendors also expect to use solution providers as full resellers of their cloud services.  Here, the partner is being given more control over setting price, bundling the cloud service with other infrastructure or application offerings and even “white-label” or privately brand some overall integrated cloud solution, with customer billing coming from the partner (not the vendor).   This model is great for partner empowerment, but does require the solution provider to have sophisticated billing and contract management capabilities.  However, some technology providers like Rackspace are providing customizable billing and provisioning tools for their partners to assist in billing automation.

Over a third of vendors professed their complete reliance on solution providers to build and deliver cloud solutions, and will opt to only sell enabling technology to the partner themselves to build out their infrastructure.   Several notable vendors including NetApp have made this definitive statement to not engaging with end-users directly at all.   These tend to be classic infrastructure product manufacturers.  Although software companies in the applications space like Oracle and SAP have a bifurcated approach, selling infrastructure to solution providers to build out cloud services AND offering a direct “on-demand” or SaaS offering directly to a subset of customers.

As evidence of the power of the cloud, only 13% of vendors surveyed indicated that have no established cloud partner strategy.   We actually think this number is a bit understated as the more traditional on-premise hardware and perpetual license software companies (Adobe) continue try to evolve their cloud strategy while not cannibalizing existing product sales.   Stay tuned for a lot more cloud engagement and support programs to emerge in the coming 12 months.

These statistics reflect the (not surprising) interdependence of vendors and their channel partners where cloud services are concerned.  This trend should also serve as a wake-up call to solution providers to drive their own development of cloud related assessment or integration services, and to look for key vendor programs in which to participate as the market matures. Investments and experimentation here will continue to make solution providers more valuable to vendors as they together mold and monitor evolving cloud customer demand.

You can access the Executive Brief of Amazon Consulting’s 5th Annual State of Partnering Study here.  This is THE most comprehensive analysis of the IT vendor community’s plans and priorities for their channel partners.  The complete report is available for free to all subscribers of the Amazon Consulting PartnerG2 market intelligence subscription service.  For full details go to www.amazonconsulting.com.

 

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Entry filed under: Industry Perspective, Partnering Tips, Uncategorized. Tags: , , , , , , , , , , , , , , , .

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