The challenges are high but rewarding for system houses that focus on cloud-based services.
It is still common belief by some CEOs that cloud computing is a side issue that only progresses slowly. In reality, cloud-based technology has rapidly progressed – it is already well-established in a large number of companies. And the market continues to grow. According to market researcher ISG, the German market for public cloud services has grown annually at about 26%. Resellers have already begun to feel the consequences of this development, especially those that still offer traditional IT services. They need to rethink their market strategy to keep pace with a shifting marketplace.
Many resellers are on the right track and have expanded their portfolios by including managed services like the Spamfilter Service or Advanced Threat Protection from Hornetsecurity. IT channels are also rapidly consolidating, as the buyout of Exabyters by Telcat prove (both are Hornetsecurity partners!). This merger represents the future of the IT channel which constantly needs to find new fields of business and offerings. Telcat plans to take over Exabyters‘ 30 employees and increase the managed service staff to 150 employees in the coming years.
Save costs, time and effort with cloud services
And there are good reasons for the growth of cloud-based solutions. Through cloud-based services, enterprises can drastically reduce both their internal hardware and software requirements which leads to saving time and money for IT administrators. IT managers are now able to concentrate on their core competences and projects. They can also develop their department to be more flexible by scaling their outsourced activities much more easily. Concerns about cloud services creating a lack in data security and losing control are minimized by waterproof contractual agreements and a continuous growth of professionalization of the providers.
While companies largely benefit from cloud services, resellers seeking to reorganize their portfolio will face massive changes in their organization, logistics and processes. First, there is the change from typical contracts with an annual or even multiannual duration to monthly contracts. Consequently, the cashflow will naturally change from large single payments to small monthly payments. This adjustment holds some advantages, as there will be a steady regular cashflow.
Changes can be hard but rewarding
Beyond that, resellers need to bring their service mentality to the next level, as customers are expecting a higher service quality when using cloud-based services. For example, they demand a very high quality of service, which ideally is available 24/7 on both a technical and sales level. For this, server capacities need to be created or increased, employees trained for the new services and possibly working in shifts. So, many challenges that require a huge amount of planning, assertiveness and even capital investment, wait for resellers.
Nonetheless, the struggle can pay off. Simply relying on existing technologies and not preparing for the future has rarely paid out, although in the future there will remain niches that resellers could occupy. The cloud with all its disruptions of prevalent technologies cannot be stopped. Channel executives should not evaluate the situation wrong, otherwise they will end like German emperor Wilhelm II., who is alleged to have said, “I believe in the horse. The automobile is only a temporary occurrence.“