Cloud computing creates tremendous opportunities from the channel, and cloud vendors will rely heavily on the channel as the cloud drives a technological sea change, Google Enterprise Director of Channels and Business Development Stephen Cho said.
Cho, speaking at the Cloud Channel Summit in Mountain View, Calif., Monday, said Google and other cloud vendors don't have the sales, service and support reach required to capture the rapidly growing number of cloud opportunities, and the channel will play an integral role in extending that reach.
"We need you to serve the customer," Cho said, adding that the channel and solution providers will be the bridge to the cloud for vendors as advisors to help customers migrate to the cloud and vendors reach the market.
"This industry will be built, without question, around the channel," Cho said.
And for partners to enter into the cloud now, the market will provide depth and long-term success, if the channel knows how to attack the market.
"We are at the beginning of a very important and key trend here for the next couple of decades," Cho said, noting that the cloud market is estimated to reach $200 billion come 2013, roughly two-thirds of which will be services.
The cloud presents better and cheaper IT, but also requires solution providers to adjust their businesses to target the market. Cho said many cloud customers already know what they want, and it's up to the channel to give it to them and help them achieve the goals. And those goals may go against traditional on-premise IT.
"The users in a company are no longer going to be trapped by the private decisions of the IT department," he said, adding "they know exactly what they want and what they're getting."
To accommodate the shift, solution providers have to change their focus from providing operational help to providing value and move away from hardware and software sales model to a recurring revenue based services model.
According to Cho, making the move to the cloud requires focus on the part of the solution provider. Moving ahead timidly won't work, he said.
"Those who are dabbling, those who are putting a toe in the water … they are not successful," he said.
Partners also need to hone their cloud strategy and ditch the on-premise shackles of the past.
"It is complete and technological nonsense to build e-mail on premise today," he said.
Solution providers also must focus on atomization, as the services offered will be smaller and narrower. Cho said that firms that engage a customer with a seven-step migration that takes thousands of hours will fail. The channel must realize that the cloud creates an environment that doesn’t present 10 projects that are 1,000 hours each, but 100 projects that are 10 hours each.
And cloud success for the channel also requires specialization and a clear compensation plan where organizations determine who to pay sales staff based on the new business model. Cho called compensation an "unsolved nut," but said it is a conversation that has to be had.
Overall, Cho said, there is plenty of cloud opportunity to go around in the channel and those who grab hold now stand the best chance of being successful in the long term.
"It's something that goes against the grain of current economic cycles … We should all be feasting on the opportunities in front of us here," he said.