BoB Conference: Cloud Computing Wreaking Havoc On Old IT Models3:59 PM EST Wed. Oct. 17, 2012
The cloud computing twister is picking up speed, wreaking havoc on both businesses and solution providers that are not getting with the cloud program.
That was the big takeaway Wednesday from a cloud integrator forum panel at UBM Channel's Best of Breed (BoB) Conference aimed at helping solution providers retool for the cloud computing era.
"We see the rate of change accelerating," said Ron Dupler, the CEO of GreenPages, a Kittery, Maine-based national cloud integrator that has made big investments in a cloud management platform. "We see today very large corporations with internal mandates to get their SAP environments out into the cloud immediately. That is pretty important. That is their family jewels."
Dupler said he sees more intense pressure than ever before on solution providers and customers sticking with the old IT model. "If you are a CIO of an organization that isn't on the move and reacting and deploying these solutions today, you have got intense pressure on you," said Dupler. "To me, every force in the market is driving this. Whether you are VMware, HP, Cisco, a solution provider or a customer, the rate of change is putting pressure on everybody to adapt, and the organizations that do that well are going to win."
The pressure on old IT models was highlighted Tuesday with both Intel and IBM being hit by a hardware sales falloff. Intel Tuesday reported that third-quarter PC sales "grew approximately half of the seasonal norm." IBM, meanwhile, said its third-quarter hardware product sales from its Systems and Technology business were down 13 percent in the third quarter.
"We are now starting to see the shift we have been talking about for the past several years, where people stuck to old paradigm revenue models are going to feel increasing pressure," added Dupler. "Any company that is living off a product-centric revenue stream and dependent on that for their profitability and success better be on the move, or they are going to be gone."
Dupler said the pressure on those that have not made the move to embrace the cloud is only going to get more intense. "It is going to start as a pain in the leg, and all of a sudden they are going to have to amputate their leg," he said.
NEXT: How Cloud Integrators Are Winning In the Market
Cloud integrators on the panel said they are benefiting from the increased pace of businesses adopting cloud computing models.
Ira Bell, the COO of Nimbo, a New York cloud integrator, said businesses are embracing the cloud to find new ways to reach their customers." The talk about infrastructure puts me to sleep," said Bell. "I don't know of any CIO bragging about the fact that they keep email up and running. What they care about is new applications or something that helps them reach their customers in new ways."
Rafi Moskowitz, a partner with Network Doctor, a New York solution provider advising small business customers with 20 to 100 employees, said he is winning by advising small businesses on the risk and rewards of moving to the cloud. "We are in the boardroom with senior management getting involved from the beginning on building out a cloud strategy," he said.
Dave Rice, the CTO of TrueCloud, a NetSuite ERP software-as-a-service (SaaS) partner, said he is seeing big cloud sales adoption from small and midsized business that are looking to upgrade from on-premise applications like Peachtree or Intuit accounting software. "A lot of these customers have been underserved," said Rice. He said those customers are embracing the ability to get a robust enterprise-class cloud ERP solution on a per-user subscription model.
New Signature, a Washington D.C. cloud integrator, is driving big cloud sales growth by doing the intense, no-nonsense economic analysis on which applications to move to the cloud, said Christopher Hertz, the founder and CEO of New Signature.
"CIOs sometimes look at the lowest hanging fruit, which is a red herring," said Hertz. "The easiest [application] to move [to the cloud] might be email, but the highest value may be CRM or ERP. CIOs are distracted by low hanging fruit and instead should be focused on where they can get the highest value by moving to the cloud."
Solution providers that have not shifted their business model in the last several years to embrace the cloud are "getting crushed right now," said Hertz.
"Anyone in this marketplace not growing at double digits has a problem because right now the entire business world is transforming their infrastructure to move to the cloud," he said. "How could you not have double digit growth? This is the biggest wave of cash hitting our industry in the last two decades."
PUBLISHED OCT. 17, 2012