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Enough For Everybody In Cloud Services
Gentry is confident that the telcos and carriers will embrace the channel and the channel will hug back, getting access to established networks and immeasurable opportunities to scale. He said as long as the deal registration process is clean, there shouldn’t be any poaching issues. And for telcos, strong partnerships put more feet on the street and create a sales force extension that could be impossible to deny.
“They’re cutting back in their services organizations and letting the partners do the work,” Gentry said. “They’ll never have enough people. If they think they can cover it all direct, they’re foolish and they’ll come back around.”
Gentry said there is enough money in the cloud computing business for everyone -- service providers and partners -- to get their fair share.
Morganville, N.J.-based Breakthrough Technology Group (BTG), the No. 1 revenue generator for AT&T’s business segment, resells a host of AT&T services, including voice, data, mobility, MPLS, IP networking, hosting and more, and offers design and implementation services. BTG supplements those carrier offerings by providing its own managed services from two different AT&T data centers -- services that include cloud computing, virtual desktops, SaaS and more with its AppsAnyplace portfolio.
Jeff Kaplan, founder and CEO of BTG, said this approach gives the company the ability to be the “end-to- end” provider while enabling it to scale. While Kaplan wouldn’t reveal what amount of revenue its AT&T relationship generates, knowing the carrier and the VAR sides of the business has generated solid rewards.
“We can really design and deploy an end-to-end solution that takes the best technologies,” he said. “I can help service an entire company and go in hand-in-hand with an AT&T rep and it’s a win-win for everybody.”
Tiffani Bova, analyst at research firm Gartner, said channel companies have to embrace the carrier cloud and see how it can benefit their businesses.
“As technology converges, so will partner types,” she said. “And as technology converges, so will strategies.”
According to Bova, carriers, telcos and cable companies expanding their portfolios with cloud offerings just makes sense. Service providers understand selling monthly services, which is a key attribute of the cloud.
“What they know better than anyone else in the world is monthly billing based on usage, and cloud is all about monthly billing based on usage,” Bova said.
Randy Bias, CTO of San Francisco-based cloud consultancy CloudScaling, said the cloud is tailor-made for telcos, which have the wireless networks, IP backbone and data centers to reach a broad market. CloudScaling helps build large-scale private and public clouds with a focus on telcos and service providers, in a bid to give traditional carriers an edge over consumer-focused cloud services like Amazon and Rackspace.
“The carriers have very good DNA to be successful,” he said. But where the telcos fall short is that they dismiss the Amazon and Google Web-based cloud model in favor of an enterprise, or legacy, cloud model. Essentially, to succeed, telcos and their partners have to “recognize that commodity-style clouds are the de facto [model] going forward,” Bias said. To embrace that model, carriers and telcos have to view IT as a utility service that provides a commodity at scale, a model Amazon has perfected.
Adding differentiated services on top of commoditized clouds is where telcos and their partners will reap rewards, according to Bias.
“[Carriers] and their partners have a greater reach as a group than Amazon has individually,” he said.
In a perfect world cloud scenario, the channel will worry less about what products it’s selling and focus more heavily on value-added services, said Gartner’s Bova. Teaming with the carriers can tell that story.
Offering disaster recovery, business continuity, strategic planning and more on top of AT&T, Verizon, CenturyLink or another provider’s cloud services lets solution providers drive attractive services revenues while getting a small percentage of the product margin.
New York-based cloud solution provider Bluewolf, which offers cloud professional services and consulting, works with carriers as customers, but Caryn Fried, senior director of professional services, said the company sees a future where VARs and carriers team up to offer a set of cloud products and services in concert.