Is the cloud raining on the IT channel's parade?
By Simon Campbell-Young, CEO of Phoenix Distribution.
The cloud - the technology that, in simple terms, allows users to employ and access various applications, programs and files over the Internet from myriad devices - is changing the ecosystem of the entire IT channel. Before the cloud took shape, end-users could only gain access to the goods and services offered by vendors by - sometimes patiently - waiting for it to travel through the reseller community. These include value-added resellers (VARs), managed service providers (MSPs), consultants, systems integrators (Sis), original equipment manufacturers (OEMs) and distributors.
However, the cloud has enabled self-service. "These days, it doesn't matter whether you are an entrepreneur with a one-man operation or a CEO of an SME. Anyone with a valid credit card can buy whatever services or products they need," explains Simon Campbell-Young, CEO of Phoenix Distribution, a leading supplier of consumer-related electronics and software products in South Africa.
"If your IT department is too slow in providing you with that server you need to be hooked up to for e-mail, or for your company's Web site to function; or if your supplier or technology partner has hiked up its prices and has suddenly become too expensive for you, then you can simply whip out your credit card, punch in your details, and buy whatever you require straight from the Web."
This convenience and accessibility are why the uptake of the cloud has been so rapid, especially among smaller business owners, says Campbell-Young. Most of the major hardware manufacturers have dedicated account teams to serve and manage the needs of the large enterprises, such as the major conglomerates that invest multi-millions into IT annually.
But those account teams do not always serve smaller businesses, so the vendors never manage them directly. Instead, that's where the reseller comes into play. Since smaller businesses often do not have the means to sustain IT departments, resellers become the sole IT decision-makers and solutions providers for all those smaller companies they serve.
Many resellers are feeling threatened by potential clients bypassing them to get their goods and services. However, according to Campell-Young, the cloud needn't be seen as doom and gloom for the channel. "It could, in fact, have a silver lining if the channel learns to work with the cloud. Resellers can actually use the cloud as an opportunity," he says. "For example, resellers can offer to help SMEs migrate some of their IT systems to the many cloud-based servers out there, or they could expand their businesses by using the various benefits the cloud offers."
In short, VARs must find ways in which they can exploit the cloud's popularity to add the value back to their own offerings. "At the end of the day, most business owners and CEOs do not care how or where their IT services originate and exist. As long as it works as it is supposed to, is secure and delivery is speedy," Campbell-Young concludes.