Page 3 of 3
Part of that new model will be embracing the channel. Alvarez said many will adopt an agent model where partners can add value. They can become a broker and be a hands-on resource for end users.
Jeff Hine, analyst for Enterprise Strategy Group, said CenturyLink's Savvis buy and other telcos ramping their cloud efforts has created a sort of "awakening" that the indirect channel is a solid go-to-market for cloud services. That renewed interest in the channel comes after years of service providers being "all over the place" with their indirect sales strategies.
"Over the last year, the philosophy of the service providers has been changing pretty radically from 'we don't need the channel, we can go direct' to 'I think we need channel partners to get to market' and they start putting programs into place," Hine said.
Burns said major telcos like CenturyLink and Verizon have the ability and the reach to have a strong direct play, but wrapping in hosting and cloud would require them to better leverage the channel.
CenturyLink buying Savvis also raises the question of what's next as telcos storm the cloud.
According to Alvarez, AT&T is one major service provider yet to make a massive cloud acquisition. Comcast, too, has been biding its time before striking. It's unclear what cloud providers AT&T or Comcast would target if they get the acquisition jones, but Alvarez said "Rackspace is the next sexy target."
Hine agreed. He said Rackspace could survive on its own and has established a massive presence, which could make it an attractive acquisition target for a carrier to retrofit into its footprint. OpSource and GoGrid could also be targets for telcos looking to add cloud through acquisition.
Another question is where the major vendors will play, Hine said. Dell has hinted that it will become a public cloud service provider in the near future. And HP has vowed it will be a cloud leader. HP and Dell moving into the public cloud space will put them in direct competition with the carriers and telcos and some channel partners.
Burns agreed that Dell and HP may break the pattern with key cloud provider acquisitions of their own as they hash out their respective cloud strategies.
And Network Doctor's Hilbert said the major vendors turning into cloud providers is more of a concern than the telcos, as the vendors have the ability to woo away deals from cloud solution providers.