We All Should Be Paranoid

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A new year is upon us. At this point, your sales team is hunting for projects that are unlikely to begin before 2009's year-end. So are you optimistic about 2010? What bigger themes should you be thinking about?

Well, the answer to general optimism is an easy one. You wouldn't be an entrepreneur if you were not eternally optimistic with a healthy dose of paranoia that your competitors and sometimes your suppliers are out to get you. But I think you should also realize that the old saying, "Just because you're paranoid doesn't mean they aren't out to get you" is often true.

In 2010, you have to think about that. The evolving big-theme landscape is something you need to watch and contemplate how it will affect you over the long term.

We are seeing a lot of repositioning, reconfiguring and maneuvering by suppliers preparing for a cloud computing world. Let's not discount that the channel and individual channel companies will be impacted along the way. It isn't all going to be easy, and it isn't all going to be good.

So here's where my paranoia comes in. I believe no one does business with anyone who could remotely be considered a middleman because they like you. The only reason anyone does business with anyone in the delivery or acquisition pipeline is because it makes economic sense. And let's also remember that all salespeople would rather take the business direct than move it through an indirect channel. It's a question of control.

The reality is Cisco is maneuvering to be a cloud computing supplier. HP is a natural cloud player. IBM is less capable but certainly likes the model and wants in. Cloud computing is a long way from true large-scale deployment, but we are moving slowly to a world where computing power is sold and bought much like electricity is. I send in a check based on how much I used last month, and if I need more of it I'm plugged in and it's available.

Without question, this long-term trend is going to cause massive channel conflict. More immediately, solution providers are going to feel the heat from the major suppliers. Companies like Cisco, IBM, EMC and others are steeped in a direct-sales heritage. Sure, they have a channel and, certainly, they spend lots of money on channel development and execution.

The more cloud capable Cisco becomes and the more it can line up against HP the more you have to suspect that both companies are going to want to leverage their sales channel. And if you happen to be a solution provider that sells both you have to expect one or the other, or both, is going to say choose me or them. It's only natural at some point.

Farther down the road, can we expect more computing power to be sold direct rather than through the channel? It's probably too early to tell and, to some degree, cloud computing could actually increase the available market.

Next year is certainly not going to be the "year of cloud computing" or anywhere close to being the period where the cloud becomes a strong option. It will, however, be a year in which cloud computing continues to develop and that alone is going to cause issues for you.

You need to be moving down the cloud path as well, and you need to be evaluating and watching your suppliers with a skeptical eye, understanding all the while why they want to do business with you. That's not paranoia; it's business.


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