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Channel Sales Forecast: Only Partly Cloudy

Every month it seems a new study highlights the increasing demand for technology delivered as a service via the cloud.

Recently, Forrester released their latest estimate of global IT spending, predicting that investment in technology products and services will increase moderately to $2.18 trillion by 2014. An increasing portion of this staggering investment will undoubtedly go toward new cloud services. But while the IT industry is in the midst of a modern-day gold rush, the channel is scrambling to catch up.

Every month it seems a new study highlights the increasing demand for technology delivered as a service via the cloud. Evolve IP released interesting results from a survey of more than 1,100 IT professionals from mid-market companies that confirmed, once again, that demand for cloud services is red-hot. According to Evolve IP, 43% of midmarket companies plan to increase their budget for cloud services in 2013, and more than 61% plan to do so in 2014.

While demand for cloud services is booming, adoption in the channel is relatively low. For most solution providers, cloud services still only account for a small portion of their revenue and profits. Many solution providers that have made their money implementing on-premise technology solutions for their clients are frantically building new cloud services businesses. It's unclear who will win and lose in the cloud services game; it is clear that there will be a shakeout.

Some traditional VARs will successfully transition to a new business model, whereas others will miss the opportunity as new, "born on the cloud" resellers emerge to fill the gaps and capture market share. With so much at stake, IT vendors are investing big bucks to help existing partners weather the storm while simultaneously recruiting new partners that have what it takes to succeed in the increasingly competitive cloud services marketplace. Unfortunately, vendor investments have not had the anticipated impact. While there is a lot of buzz in the channel about the cloud computing opportunity, actual sales of cloud services are too few and far between. Channel partners are getting plenty of marketing and technical support from vendors, but partner sales reps are asking for more help from their vendor counterparts.

Much has been written recently about the struggles IT channel partners are facing and the changes they are making to transform their businesses. Surprisingly little research, however, has focused on how IT vendors need to change their channel sales organizations to capitalize on the cloud services opportunity. After all, if your channel partners are reinventing their businesses, isn't it reasonable to assume that that your channel sales team also needs to change? Of course, the answer is a resounding yes. The real question is how?

You can see a summary of the research we recently conducted on this topic and the insights we drew from it in the recorded webinar, Channel Sales Forecast—Only Partly Cloudy. The webinar also highlights five critical considerations for vendors as they plan for 2014.

Sponsored by ZS Associates

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