As Jeffrey Kaplan has said “one of the misconceptions of the Software-as-a-Service (SaaS) and broader cloud computing market is that these new Web-based services will disintermediate the channel because of their simpler, more user-friendly solutions, and direct sales and delivery business models.”
It’s true that the channel will have to change, and make no mistake there will be winners and losers, and in a more dramatic way than in the last 20 years of the industry. It was Drucker who said that “In a time of rapid change distributors and distribution channels tend to change faster than anything else” and he also said that in these times of change it is not clear what kinds of (goods and) services will be sold through the changing channels. So don’t feel alone in being confused, that’s just how it is!
In this re-invention of the channel brought about by the “Cloud Shift” it’s a matter of disconnecting and then reconnecting the value offered by the channel to customers. Resellers need to reassess their assets, strengths, advantages and offers and then match those to customer, segments, people and clearly understand the benefits and value. From there messages, communication, marketing and sales – customer engagement – leads on to the new business.
That’s the big picture of the change, at the grass roots level today the Cloud presents some immediate opportunities.
AMI Partners recently reported an anticipated growth of “up to $95 billion in global SMB Cloud-related spending by 2014” and saw “companies like Microsoft and IBM who provide a convergence of on-premise and SaaS are clearing [security, privacy] concerns for interested SMBs who are trying to maximize the combination of cloud and on-premise issues”.
They believe that Email/messaging, Online storage/backup, and Document management/collaboration will be the pull from SMBs and that the Cloud plus on-premise vendors (think Microsoft Small Business Server, Exchange Server and SharePoint) have a distinct advantage in converting them to Cloud (think BPOS applications like Exchange Online and SharePoint Online).
Many MSPs have taken on board the Cloud Shift, and want to offer BPOS applications like Exchange Online and SharePoint Online but they worry about slim BPOS profit opportunities and lack of customer “control”. The later meaning that the customer will lessen their dependency and not be willing to spend money for support (and in the case of BPOS the customer is billed directly by Microsoft). In this thinking these MSPs are probably displaying their own business weaknesses as it’s well known that no-one “controls” a customer or account these days and it’s an old telco folly to think that billing “control” brings new business.
The reality is that customers are going to migrate anyway.
But they aren’t going to do it overnight and as an MSP you can help them plan that move and at the same time develop new opportunities – I laid out five steps in this post.
AMI also believe that “mobile cloud applications are set to make deep inroads into the SMB market”. This is the immediate opportunity for the channel in moving to support Cloud apps and Cloud conversion by their SMB clients. For example in the Microsoft Cloud world it is key to help customers understand the potential for integrating BPOS, CRM, & Azure – this provides powerful business and service opportunities.
MSP-driven mobile Cloud services opportunities
During the transiton period, which is on now, MSPs can work with their customers to help them decide which other Cloud and in particular mobile applications they need, would prefer to bundle, can be supplied or services provided by the MSP, and their price sensitivity.
Key applications used include mobile cloud CRM (customer relationship management), used by SMB sales staff to impact sales, improve time management, and better communicate via their smartphones. More widely, SMBs benefit from mobile cloud email (e.g., Blackberry), which is usually more dynamic than non-hosted Internet email systems and frequently less costly on a total cost of ownership (TCO) basis. SMBs are also making investments in enabling mobile access to their internal databases, inventory and related information, indicative of a broader need to have access to key data on the go.
This offers a channel driven play for hosters to tap into SMBs willingness to undertake expenditures to develop mobile capabilities. While enabling mobile access to SaaS applications already in use is a given, innovative business applications that allow SMBs to bypass physical infrastructure and yet operate in a highly collaborative manner will continue driving the utility of cloud mobility.
The key is that mobile cloud services have immediate value for many SMBs, since many have a mobile workforce and smartphone penetration is high and rising.
“This implies the end market for mobile cloud is adequately saturated with devices able to run mobile cloud applications and reap the benefits of hosted mobile services,” said Karen Nielsen, senior consultant and telecom analyst for AMI-Partners.
MSPs who show their willingness to help SMBs transition into the Cloud, in a planned way, and then build on the Cloud value with specific application and services, say in mobile, will cement their place in the Cloud channels of the future.