XChange: Customer Buying Habits Favor As-A-Service Model


VARs planning for the economic rebound have no choice but to understand cloud computing and redefine their role as trusted adviser to customers, urged Rauline Ochs, senior vice president and general manager of Everything Channel's Institute for Partner Education and Development.

Speaking at a morning session at XChange Americas Monday in Dallas, Ochs reminded VARs that several vendors that have become cloud computing stalwarts weren't even around 10 years ago. What's emerging, she said, is a class of vendors offering Software-as-a-Service (SaaS) and Infrastructure-as-a-Service (IaaS), some of which use distributor and reseller or MSP channels, and some of which do not. VARs need to quickly identify how -- and with whom -- they can play.

"Don't let change happen to you," she urged.

Customer buying habits are rapidly starting to favor the as-a-service model, she said. According to IPED, the percentage of end customers' anticipated IT budgets devoted to off-premise hosted solutions will move, by 2012, to 17.5 from 14.7, and the percentage of pure cloud solutions will move to 12.5 from 6.9. More traditional on-premise product purchasing, under a reseller model, will decline to 43.5 percent from 49.7 percent. On-premise hosted solutions will also start to decline, expected to reach 26.7 percent from 28.7 percent today.

One of the biggest changes? No longer can VARs rely on post-sales support revenue, as "pick, pack and ship" doesn't apply to as-a-service solutions. Thirty percent to 40 percent of VARs in the U.S. are making money through post-sales only, Ochs said, but it's those VARs that'll be left shorthanded with cloud.

Instead, she advised solution providers to learn new capabilities and new skills, as well as what vendors are doing and what they expect their partners to do. Cloud integrators -- those solution providers who can stitch together various on-premise and off-premise solutions with a customer's existing infrastructure and make it all work seamlessly -- will be in high demand.

Kimberly D. Howe, vice president of business development for Intelek Technologies, a Norman, Okla.-based solution provider, said that Intelek had started looking at hosted solutions but in terms of cloud adoption was "definitely behind the 8-ball."

Intelek specializes in transport and logistics -- industries, Howe said, that are typically slow to adopt new models unless the cost savings and scalability are obvious. "They don't do anything until they're certain, and then they Band-Aid," she said. "We have to make sure everyone is convinced of the [cloud] concept."

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