Are You Funding Your Own Failure In The Cloud Transformation?


Recently, I was asked to do research for a startup focusing on big data that gave me access to 20 CIOs from large and medium-sized companies (for this discussion, a medium-sized business is 100 to 500 employees, and a large business has more than 500 employees). I talked with these CIOs about a variety of topics in order to understand how they were adopting big data and what value the channel and their existing relationships bring to that effort. I found there were some other key items that seem to be driving behavior in these organizations related to virtualization and cloud adoption.

Most of the CIOs cited cloud as one of their key initiatives, which is no surprise based on Gartner, Forrester and IDC surveys about cloud adoption. However, what I found interesting was they all told me they anticipated this would be the last time they would invest in hardware or on-premise solutions. They are in the process of buying hardware and solutions that enable them to modernize the last parts of their current environments and all expect they will be able to fully consume IaaS and PaaS in the next three years or less.

So, businesses both large and small are focused on the cloud, but for VARs today, the pressure is coming from service providers, which are replacing the traditional VAR in sub-50 user companies looking to consume business services without a hardware investment. Those same service providers have implemented middleware that allows them to provide data integration services to bring multiple SaaS-based solutions together to provide more value. It is clear the VARs of today are living on borrowed time as the market, competition, funding and the way customers buy are changing at Internet speeds.

What are you investing in today -- more sales engineers or solution architects to implement hardware and drive vendor certification for broader discounts or application developers? Where do you fit in the cloud ecosystem? Do you truly have something you can sell that is recurring revenue? How are you going to provide traditional reseller services that are now being provided by the service provider? What value do you add when there is no hardware to sell?

You must adapt to the speed and the way the new breed of small businesses operate. What do they look like? They are nimble -- they are only used to waiting one second on a Web page; can you respond at that speed? They are self-service oriented and expect to be able to interact digitally with their providers. They don't have compliance issues, so there is no roadblock, and don't create one! They don't want to buy hardware because they are mobile and working at all hours. They are connected socially, and their friends' recommendations matter. How are you going to create tremendous value for these customers when your business model relies on the sales of traditional solutions?

NEXT: Let's Start A Discussion