Last month, Jack McCarthy, CRN’s cloud reporter, and I had the opportunity to attend a free business model transformation (BMT) session in the Bay Area hosted by Intelisys. The audience was made up of solution provider owners. The objective: to show a clear line of sight to and the business outcome of adding recurring revenue cloud-based services to the company line card. By adding cloud services to their line cards, the solution providers could initiate the transformation of their business models from Legacy (IT project-based, no recurring revenue) to Transformative (IT project-based with some recurring revenue).
IPED has been a longtime promoter of vendor-sponsored BMT investments. Though I have found only a handful of the largest server, storage or software vendors have invested in transformation curriculum to date, the good news is that industry associations and IT distributors are stepping in to assist the estimated 25,000 to 40,000 U.S. solution providers who have not yet and may not embrace recurring revenue offerings.
I found several things about the session surprising. First, by the time I followed up on the results of the day, all of the attendees had made a commitment to doing business with Intelisys -- recruitment in action. Second, Intelisys was not one of our traditional IT distributors but was in fact a distributor from the telecom/cable company ecosystem, known as a master agent. Third, the master agent not only offered access to critical managed and cloud services, but also had laid out pre- and post-sales support, invoicing, renewal management, and broadband service offerings that had been aggregated to offer solution providers access to capabilities both core and complementary to their existing businesses. IPED BMT research indicates a solution provider faces an easier transition with lower risk by staying close to core capabilities when expanding to complementary, yet new offerings.
The solutions available included managed virtual desktop, managed VoIP, Infrastructure-as-a-Service and remote management of mobile handheld and tablet devices, to name a few, all of which align with customer research indicating the first infrastructure workloads moved to a cloud or managed service.
Solution provider feedback indicated the aggregation of these capabilities did two things. One, it took away the burden of researching new managed or cloud service vendors. Two, there was no immediate requirement to train technical staff or certify to get started with new vendor technology. The master agent, a full-service cloud aggregator, indicated pre- and post-sales support was available, and it carried any necessary product certifications, effectively lowering the barrier to entry and the cost to play.
If you follow this column, you know I am a fan of what IT distributor Synnex has built as a full-service aggregator of cloud services. Cloudsolv is delivered via a portal for its solution providers to provision and manage myriad Hardware- and Software-as-a-Service capabilities. To date, I have not seen the other IT distributors follow suit in a comprehensive, end-to-end fashion, though new distributor cloud offerings are unveiled weekly.
Watch this space; it looks like a race to me. As IT vendor channel chiefs question the role and efficacy of distribution in the 25 percent of customer IT budget spent as a cloud service, enter telecom/cable company master agents with recurring revenue built into their DNA, the willingness to make it simple, and an appetite for IT solution providers.
BACKTALK: Contact SVP, IPED MarketBridge Alliance Rauline Ochs via e-mail at rauline.ochs@ubm.com.
