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The cloud market is large and growing rapidly. The largest cloud provider by far is Amazon Web Services, Seattle. Amazon's cloud business, according to research firm IDC, is expected to reach $1 billion in 2012, way ahead of any competitors, and the company has cut prices 19 times since AWS launched to try to ensure no one will beat it in that category.
But Amazon has a reputation for sometimes poor communication with partners, in keeping with its roots as an automated, online books retailer that doesn't expect personal interaction.
Also, Amazon, along with other cloud providers such as Rackspace, Google and Microsoft Windows Azure, have all suffered outages during which they failed to promptly communicate with partners.
Under these circumstances, partners can tap into significant opportunities to act as intermediaries for clients looking to the cloud. The gains are there to be had, experts say. The upheaval created by cloud computing is creating an opening for solution providers to become trusted partners or cloud brokers to businesses as they move to the cloud.
"The cloud is creating more than an opportunity for solution providers," said Rauline Ochs, a former Oracle channel chief and senior vice president of IPED MarketBridge Alliance, a research and consulting firm affiliated with UBM, the parent company of CRN. "It's an imperative. If they don't figure out how to participate, their revenue will not stay as it was."
The cloud business model differs from legacy IT equipment sales and instead follows a subscription-based business model to create a recurring revenue stream from services.
Ochs estimated that cloud services will grow five times faster than overall IT growth, or 19 percent annually through 2015. In addition, by 2014, 25 percent to 30 percent of IT spending will be used toward cloud-related services rather than traditional IT functions.
"The traditional reseller business isn't going away," she said. "But you should be prepared to capitalize on the 30 percent of the new business."
A study conducted by IPED MarketBridge and UBM and published in March 2012 showed that traditional data center growth will remain fairly steady but the cloud business model will increase significantly from 2011 to 2013, as shown in the following forecast:
Standard customer-owned data center use will decline slightly from 88 percent to 87 percent.
On-site managed services will increase from 54 percent to 55 percent.
Off-site managed services will grow from 51 percent to 59 percent.
Public cloud usage will jump from 32 percent to 41 percent.
Private cloud usage will rise from 40 percent to 50 percent.
Another IPED study estimated that the average gross margins for managed services providers will reach 54.1 percent, compared to 28.8 percent for on-premise product resales.