TORONTO – Infrastructure vendor EMC Corp. held its annual EMC Forum event here Tuesday. A survey of attendees showed big interest in cloud computing and big data, and it’s an interest the vendor is ready to fill – if the channel capacity is in place to do so.
At CDN’s recent Channel Elite Awards, Bruce Stuart of channel consultancy Channelcorp outlined what he termed an hourglass effect when it comes to the cloud: lots of vendor interest, lots of end user interest, but a slowness by partners to make the business model changes necessary to transition from a transactional revenue to recurring revenue model and bridge that vendor interest and customer demand.
Vendors such as EMC will rely on the channel having the capacity to bring their solutions to market and fulfill the interest they work to create in the market. Michael Sharun, country manager with EMC Canada, told CDN that some partners are ready, but not all of them are there yet.
“(Some) have been working very hard to make sure they’re providing not only the capital resell business, but also be in a position to work with clients (in a) recurring revenue model, whether it’s moving workloads to the cloud or becoming subject matter experts,” said Sharun. “The ones that aren’t, I think that’s a mistake. You’re going to see more and more of IT happening in the cloud, and less in the traditional ways we see today.”
How enterprises are buying and using technology is changing, said Sharun. Spending is focusing not just on business efficiency, but business transformation, through cloud computing and big data. They’re consuming technology differently, and they’re buying it differently as well. For partners, he said EMC has a number of programs to help partners make the shift, such as financing programs to help partners and customers pay for purchases when the payoff could be years down the road. There’s also education programs to help partners make the shift.
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“We’re also looking for new partners,” said Sharun. “We need partners who are tech savvy, but also application experts. They’re the new type of partner, driving solutions with insight into how the business operates.”
Partner partnering may be the future, said Sharun. A partner with telecom expertise, for example, may work hand-in-hand with a cloud partner, one providing the industry expertise and the other the cloud know-how. EMC is beginning to encourage this sort of partner collaboration.
“You’re going to see a lot more boutique partners in business with some of the larger traditional channel partners, going to market and attacking a space they can’t on their own,” said Sharun.
It’s a model that Thornhill, Ont.-based OnX Enterprise Solutions – an EMC partner — is already beginning to work with. Michael Cardy, CTO with OnX, said they’re beginning to work with other partners to grow their cloud business into more markets.
“We have some partners in geographic markets where we don’t have presence, and in specific verticals,” said Cardy. “We’re the backend, the ‘powered by OnX’ behind the scenes. Some stuff they own, and some we provide as they leverage our cloud solutions.”
While some partners are struggling with the shift to the cloud model, OnX has the advantage of being both a larger partner and being an early adopter – they’ve been in the managed services space since 1998 and had their first “cloud-like” offering in 2001. Cardy said it involved significant capital investment and major changes to business model and operational processes, but they jumped in with both feet and now have a mature cloud business. As in any market, being an early adopter has its advantages.
“We will continue to see consolidation go in in the (channel) marketplace,” said Cardy. “The organizations that stick to the traditional model of selling assets will slowly shrink away or maybe sustain themselves by brokering other cloud service provider offerings, but the pressure will be from cloud service providers to go direct. The organizations that offer choice, that can help transition clients from managing IT to a cloud strategy, will survive in the long run.”
OnX’s cloud expertise helped it win a silver award for best cloud computing solution at CDN‘s 2013 channel elite awards.
Another EMC partner that has already made the cloud transition is Toronto-based Softchoice, another large solution provider with the resources to make the shift. Loïc Calvez, a practice leader with Softchoice, said an important step in their transition was breaking down internal silos, and getting staff trained up with multiple vendor partners and practice areas.
“We used to maybe have a storage practice and a network practice; now we have a data centre practice,” said Calvez. “We’re less siloed.”
Many partners haven’t yet made the shift, which means for partners such as Softchoice there’s less competition for business with other partners on the cloud side than there is in the traditional IT solutions market.