Introduction: Are your channels cloud-ready?
We have all seen the data for several years. End customers are continuing to adopt on-demand consumption models, driving an increased IT market opportunity. IDC indicates public cloud services sales will near $70B in 2015 and the “greater cloud market” – including public, private clouds and enabling IT and services – will hit $118B*. However, as we will show in this report, the majority of partners’ revenues and profit from cloud is minimal. We conducted an online survey with 107 vendor and 240 solution provider respondents to answer the questions of what impact the cloud market is having on channel partners and what vendors should do to increase channel success.
The on-demand consumption model is producing new challenges for both vendors and partners. Partners will need some significant help developing profitable and sustainable businesses that not only adopt but also highly leverage cloud computing technologies.
Six key areas that will affect how vendors engage with partners in 2015 and beyond are:
1. With a very crowded technology marketplace, differentiation is growing in importance.
Vendors need to differentiate from their competitors not only their products/services but also their partnering model/program.
2. Partners need to get better at differentiating their offer in the market as they face more competition from new sources like digital marketing agencies.
3. Successful vendors will pay attention to partner profitability as partners awake to evaluating and measuring their profitability per vendor line.
4. Vendors are looking for partners who are able to make the transition into cloud business models and need to help partners learn to be profitable in this new consumption model.
5. Both partners and vendors should see services as key to differentiating and creating partner profitability. More focus will be placed on partners’ professional services capabilities, business process consulting in addition to implementation/integration.
6. In the end, it’s all about the soft side of the relationship: do vendors do what they say? Can they minimize channel conflict? Can they build effective relationships at the field level?
