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Regarding services, what types of services are hot and are they being sold alone or attached to hardware and software sales?
Some are accompanying a project with hardware and software, some are standalone. What's going well is integration and implementation [services] around storage and servers. That's where resellers are physically doing some install onsite. What's growing is interest in our cloud builder model where [VARs] help end users build out their private cloud. We're providing some of those types of services. We provide backup to them with expertise, with professional people. Then the other thing getting big interest is an annuity stream and managed around reselling cloud services. That's going slower than most people envisioned but it is moving along. The whole concept of reselling that cloud service, provisioning and invoicing and getting into an annuity model, I'd still characterize that as developing.
There's a lot of 'get ready' going on right now. People are busy building their own capabilities to take advantage of how this may evolve. We are looking at our portal to deliver, configure, and provision cloud services. Many other distributors are looking at the same type of tool. The resellers in cloud are quite entrepreneurial. Some resellers will provide [cloud services] themselves. Some are looking for a niche to provide in cloud, not mainstream software or applications, but they want to play in cloud. They're looking to [distribution] as the go-to aggregator for cloud services.
It seems most cloud solutions now are e-mail or other non-mission critical applications. Do you envision ERP or other mission critical apps moving to the cloud in next year, or beyond that, or maybe never?
That's one hard to predict. You're right in that today it's less mission critical apps going into the cloud. What may be the next step in my mind is more information driven and people beginning to want to buy storage on demand as an infrastructure service. What they choose to store there, whether it's certain BI or information, that's the logical next step. Certain independent software vendors are looking more to cloud delivery. It's important to note that all big ERP players are providing their apps in a cloud environment, but I'm not sure how traction will go. It may be more of the tier two or three players first, not the tier one players.
Arrow has bought a couple of big Avaya solution provider companies in the last couple years and now rebranded them as S3. What's your goal with them?
Starting with our overriding strategy, we've been looking to enter new segments of the market that provide us with profitable growth for ourselves and partners. When we looked at the unified communications market and saw how it was evolving, we took a tact to buy Cross Telecom because we felt the voice space in particular and also the video space that were areas to add to the portfolio. We haven't had any competitive situations [with VARs] really to date.
We also saw some synergies where we can go long term with services. We intend to build upon that capability and white label that to our VAR base.
We sell more remotely managed services to our partner base. That means taking more into telephony, storage, other parts of the data center focus. It's a stepping point where we will take our services strategy.
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