It's Cloudy With A Chance Of Program Changes And Challenges

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You're going to be listening to the cloud computing hype and how to deal with it for years. Like all trends in this industry, it will take two to three times longer to play out than the analyst consensus predicts. I have a formula that is more accurate than the pundits. When the "Big
House Analysts" predict anything past a three-month time frame I divide by three and then cut that in half.

But regardless of when cloud computing will be the dominant delivery of computing resources, it is going to reshape much of what we know today over the long term.

The groundwork for cloud computing has been set by all the trends of
the past -- most recently the managed services play. Many businesses and even home users have been using cloud applications for years. Salesforce. com is a good example as are any of the mail or banking applications that home users boot into daily.

But cloud computing, or the ability to simply purchase more computing
power much like we buy electricity today, is the future step and is going to require many different approaches to sales models both direct and indirect. Today we readily use cloud applications; the future claims are that we will one day hook into the big computer in the sky and satisfy our computing needs just as we hook into the electric grid today.

This movement will spawn new competitors and kill off some old ones. The reason Cisco is picking a fight with HP and IBM while entering the server business is because it sees itself having to be a more complete solutions answer in order to deliver in the future cloud era.

Some new suppliers are already emerging, Amazon being an example of a company with vast computing resources it has opened up to others beyond its firewall. What's Google thinking long term?

There is certainly going to be a remaking of channel programs as we move through this in the coming years. Already the value and role of distribution is being questioned -- as if we haven't heard that before. Certainly the channel as a whole will face pundits claiming it is going away in the cloud era—again I've never heard that prediction before.
But, realistically, there are some core business challenges that need sorting through. Here are some of them:

How does a vendor stay relevant when its products are sold as a part of a utility that carries another brand and is sold by someone else?

If all I need is a connection to the broadband pipe -- be it hardwire or
wireless—to get access to whatever computing power I need, will the
Telcos be the real winners?

Will all suppliers to business and home users need to have a cloud solution or risk being disintermediated by those that may not have best of breed but do have a cost-effective bundle?

If we are headed toward a world where most distribution will be in the form of digital property and a declining amount of physical distribution of product, what is the role distribution will play and will it force consolidation of the category -- especially outside of North America?

How do today's channel program elements help or hinder the movement and how do they need to change?

In the end, as always, this is a long-term trend that may take more than a decade to be realized. But it's hard to argue that it won't play out in some fashion or that there are not going to be many changes and challenges over the short and long term as a result.

BACKTALK: Make something happen. Robert Faletra
is CEO of Everything Channel. You can contact him via
e-mail at

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