Both Sides Of The Fence: Why The Hybrid Solution Provider Model Works Best


OPINION


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How long have we been talking about the cloud now? Is it five or 10 years now?

However long it's been, one thing is certain: The world is not moving wholesale to the cloud anytime soon, if ever.

It's clearly a business model that solution providers need to play in. That is, of course, if their intention is to build a long-term, viable entity. But like every major movement in high-tech since the 1980s, these things take more time than the pundits predict.

[Related: A Modern Solution Provider's Metrics For Success In The Cloud Era]

In this case, the argument has been made that at some point we will buy all of our computing the same way we buy electricity. Many have made the evolutionary analogy to electricity. In its infancy, users of electricity produced it themselves. But over time all that changed.

There is, however, a significant distinction between electricity and computing.

Electricity really only does one thing, and that is provide energy to power machines and lighting.

Computing, on the other hand, happens in so many different ways and brings in so many different elements to a solution that it's never going to be a single offering as simple as electricity. So what this means is that at the very least a hybrid model of public and private cloud will exist for decades to come.

For solution providers, this means there is plenty of runway in front of them for selling and supporting on-premise infrastructure. But they also should not ignore cloud and the recurring revenue it provides because cloud deployments may put server pricing pressure on all models and drive down margins.
The reality is that the cloud model, while exciting and a better place to be over the long term for business health, is not going to be the only way to deploy for a very long time.

Every major trend in this industry has taken a decade to take hold. Cloud is taking longer because it's a massive shift.

But unless you can accurately predict the twists and turns ahead and how they will impact margins and interest in the current model, it's best to have your feet in both camps.

Here at The Channel Company, a midmarket-size company, we have gone completely cloud. We made the jump when we were separating from the former owner and had to decide if we were going to build our own infrastructure.

So in some ways it was an easy decision for us as an end user who is a huge believer in the capabilities of the channel to provide quality infrastructure services.

I recently spent two days meeting with the senior management at Dell. On several occasions I heard various members of the team say they are seeing some degree of repatriation on cloud, with some large enterprise accounts pulling back on some of their cloud deployments and bringing them back in-house.

I'm sure this is happening, but it's not a major trend. Over the long run, the cloud is going to dominate the landscape. It's just that it's unlikely to be the only way we compute.

I think this boils down to what type of business you want to build as a solution provider. If you want to chase a model with recurring revenue and the ability to meet a customer's needs quickly and scale up and down, you need to have cloud offerings.

If you are more comfortable pitching on-premise deployment only, whether you pitch it as private cloud or not, then so be it. In the end, the best model for now is to be in both camps so that you give yourself the greatest chance of meeting the customer's needs. That's never a bad thing.

BACKTALK: Make something happen. Robert Faletra is CEO of The Channel Company. You can contact him via email at rfaletra@thechannelcompany.com.

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