CRN Cloud Services Roundtable: Having The Right Conversations Around Cloud Is Making Partners Sit Up And Take Notice

Why Them?

Four cloud service provider executives shared how they are courting new channel partners during a roundtable at the XChange Solution Provider 2017 conference hosted by CRN parent The Channel Company. These providers aren't trying to compete with hyper-scale cloud providers, but the executives discussed how having the right conversations about cloud, offering consulting and embracing the channel – not trying to compete with partners – is helping them win business in today's crowded cloud market.

Scott Kinka, CTO and founding partner of Evolve IP; Keith Coker, CTO and founder of Green Cloud Technologies; Randy Jeter, CEO of RapidScale; and Andy Stewart, chief strategy officer for TierPoint, sat down with CRN during Xchange, and the following are excerpts from the conversation.

What must a cloud service provider offer in order to compete -- and differentiate -- from the hyper-scale cloud providers?

Scott Kinka: "If you look at the cloud space in tiers -- pure infrastructure, and then services on top of that, and then managed services on top of that, most [cloud providers] besides the big hyper-scale players have to be playing somewhere between services and managed services to compete. It's not about my costs per gig of disk versus the cost per gig of disk in AWS because customers are not going to get design, consulting [and] services that are wrapping it."

What must a cloud service provider offer in order to compete -- and differentiate -- from the hyper-scale cloud providers?

Andy Stewart: "It's about selling a really full suite of IT services, co-location, private cloud. Gartner says that for production-level workloads that are always on, that a private cloud could be 20 percent or 30 percent cheaper than going to AWS or Azure."

What must a cloud service provider offer in order to compete -- and differentiate -- from the hyper-scale cloud providers?

Randy Jeter: " Everybody tends to say, 'How can I buy and manage this at the lowest cost?' Really, what matters is the experience the client is getting and [how you] provide the best client experience because that's going to win.

"That client experience goes from designing the right solution for high availability and looking at [the customer's] budget to implementing the solution and managing that entire strategy from statement of work, to execution of that, and migration of the platform."

What kinds of conversations should partners be having with customers around cloud?

Andy Stewart: " The headlines on AWS having these massive, long-term outages are very helpful for us because it helps the C-suite wake up a little bit and say, 'Maybe I shouldn't have all my eggs in one basket.' 'Maybe I need to have a different strategy or understand where the real risks are.'

"That lends perfectly to our story around the consultative sales process. What workloads have to have high availability? Which ones do you not mind have a five-hour outage with? [Have] that conversation with customers, and not just taking an order and doing what they ask, but actually discussing the importance, bifurcating the different applications, different workloads, different sets of information and data, and giving them the best overall solution."

What kinds of conversations should partners be having with customers around cloud?

Keith Coker: " The partners that we bring on don't have Amazon [or] Azure expertise. They're looking for someone to sit down with them and help them build a cloud practice, help them understand the challenges in designing solutions. That's the core of our business.

"They're taking legacy applications and they want increased reliability, redundancy, and to get out of the cyclical hardware business. Take an outage like that, and then open it up to a collaborative discussion that cloud services are not perfect. Depending on how you design solutions and working with a partner, you can come up with something that's better than premise environments."

How are you conveying to partners that by working with you, channel conflict won't be an issue?

Andy Stewart: "We'll go in. We'll try to train an entire sales office on what it means to work with TierPoint, but more importantly, I think, what we do is also we'll team up a rep with a couple of the VAR reps directly. If they can get a couple of wins early on, the rest of the team starts seeing success of that. They realize it's a deal they may have lost outright if they hadn't gone to a service provider.

"We really started partnering up some of our better reps that were knowledgeable. They could do some of the ongoing training, and do some sales calls together [with the VAR to] get a few wins. Wins give everybody a level of comfort."

How are you conveying to partners that by working with you, channel conflict won't be an issue?

Keith Coker: "We have a very strong view that IT decisions are made locally, and that they're going to make decisions [with partners] that they trust and they know and they've worked with for a long period of time. Whether that's their local MSP, whether that's their technology consultant who has made recommendations in the past, they're going to be the influencers of where things are purchased.

"Out of the gate, we've tried to wed ourselves with those individuals who are influencing those decisions."

How are you conveying to partners that by working with you, channel conflict won't be an issue?

Scott Kinka: "I can't say we're doing anything specific other than [showing] good behaviors in the marketplace. Here's the good news. We've been at this for quite a while in the partner community, and nobody's going to go out there and be able to back up the fact that we've stolen a customer from them or stolen services from then. I think that quiets the market down pretty quickly."

How are you conveying to partners that by working with you, channel conflict won't be an issue?

Randy Jeter: "It's not the intent to take their clients whatsoever. The intent is to partner to create a great experience for [the partner's] clients. Again, what their clients care about is is [the service] delivered. The [client] wants you to support more, and so that experience is very key."

Is there an opportunity for channel partners around managing hyper-scale cloud offerings, such as AWS or Azure?

Scott Kinka: " I think that the partner would have to be prepared to deliver the services and/or the managed services, if they were going directly to an Amazon. The reality is that the Amazon, Azure, Google model isn't all that consumable by most businesses out there. Their workloads can't go from here to hhere without there being some mediation in the middle, whether it's a service tier, or whether we're rebuilding the workloads to play nice someplace else."

Is there an opportunity for channel partners around managing hyperscale cloud offerings, such as AWS or Azure?

Keith Coker: " We see [customers] moving back into something that they're more familiar with. So [cloud service providers] have the advantage. We chose VMware's Hypervisor, which is a well-known hypervisor, and so the fact that they can move back into something that's more comfortable, that's more knowledgeable to the IT staff, and gives them a place of refuge to leave the hyper-scale guys."

Where is the next big opportunity for channel partners in cloud selling?

Randy Jeter: "You have connectivity revenue and compute, which you get paid for, [and] you have compute consumption. Security and compliance is going to become a part of a commissionable piece as the market matures.

"If [VARs] sell and control the client experience as a consultant or as a partner providing it, there's a ton of commissionable revenue. There's a ton of revenue that they can grow within that account, step by step through the stages."

Where is the next big opportunity for channel partners in cloud selling?

Scott Kinka : "I think the market transition is ultimately helping the channel get and bring us slices of bigger companies [like Microsoft]. Here's the one thing that constantly you can count on in this business. … Companies with size and scale are not going to engage in these [service provider] conversations. That middle services tier is always going to be there.

"[Microsoft] finally became so successful with Office 365 that they decided they didn't want to sell it or support it anymore. Which is why … nearly everybody in this space has a reseller contract with a Tier 2 CSP. It's defensive revenue for us, but you've got to be there. That's the one thing that you can count on."