Solution Providers Reap Rewards Of 'Six Pillars Of The Cloud'


Solution providers that have aggressively adopted one of the six pillars of cloud business models are happier and so are their customers.

That was the takeaway from a panel of six top solution providers at the XChange Solution Provider conference hosted by The Channel Company CEO Robert Faletra, aimed at driving home the power of the six primary cloud business models identified by The Channel Company.

[Related: XChange Solution Provider 2014 Coverage]

Faletra said the six firmly established business models -- cloud consultant, cloud builder, cloud service provider, cloud agent, cloud broker and cloud application provider -- are a sign that the "revolutionary" disruption that hit the channel years ago with the onset of cloud computing has settled into an "evolutionary" period.

"The revolutionary  part of the cloud with a lot of confusion with partners not knowing what the right model was is largely behind us for the majority of the channel," he said.

Faletra said the six new standard pillars as established by The Channel Company mark a coming of age of sorts for well-defined and established channel cloud business models. "This is where we are going," he said. "This is where the model is."

The six pillars, Faletra said, are the cloud consultant, whose primary role is architecting a cloud solution; the cloud builder, which builds cloud infrastructure; the cloud service provider, which hosts and manages cloud services; cloud agents, which act as sales influencers to get customers to adopt specific cloud solutions; cloud brokers, which aggregate cloud services and bundle them up for customers; and cloud application providers, which develop and sell applications in the cloud.

Alex Brown, CEO of 10th Magnitude, a four-year-old Chicago-based cloud application provider that also does some cloud brokering business, said he made a conscious decision to get out of the old VAR business model because he wanted to get off the never-ending "treadmill" of constantly selling projects to move into a robust recurring revenue business. "We knew the world was changing and we knew we needed to help add value to our customers," he said. "I was frankly looking for a new model having been in the business for 25 years."

Brown said the custom-cloud-application-development-business decision has paid off in happier customers and a stronger business. "We can build up recurring revenue without needing to add more people to sell more hours to continue to grow the top line," he said. "We are very happy."

Brown said it is simply a "great time" to launch a solution provider business given the shift to the cloud. "Anytime there is confusion in the marketplace, we ought to be making money," he said. "There is a lot of confusion. The models are not settled. There is a lot of white space still out there."

NEXT: A Business Model That Leads To Higher Customer Satisfaction


See the latest cloud technologies, learn best practices, and interact with your peers at the channel’s first all-inclusive cloud event: NexGen Cloud Conference & Expo, December 4-5, 2014 at the San Diego Convention Center. Register now at  www.NexGenCloudCon.com