XChange 2012: Transformational VARs Thrive In The Cloud

Channel partners fall into three types -- vintage, progressive or transformational -- that reflect how they are responding to the onset of cloud computing and how they will fare in the future, Robert Faletra, the CEO of UBM Channel, said Monday at UBM's XChange 2012 conference in Dallas, Texas.

"We've seen a lot of players go out of business," Faletra told about 400 attendees at the event. "This is a period when the business models and the technology models are changing."

Faletra described vintage VARs as following traditional on-premise, solution-based models with no intention to create recurring revenue with off-premise, hosted services.

Progressive partners, he said, generate much of their business through traditional on-premise solutions, but they are building off-premise and hosted business while building a recurring revenue model.

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Transformational partners are building cloud deployments and buying and selling services through these deployments.

[Related: CRN's Exclusive Coverage Of XChange 2012 ]

Transformational VARs are growing their businesses; the majority of partners remain in the progressive model and the vintage VARs are endangered, Faletra said. "The vintage bucket is going to be challenged," he said. "It's not a place you want to be."

In addition, service providers are creating changes in the channel market as they enhance their cloud services, Faletra said. "They come to us every day and ask, 'How can we further engage [customers],'" he said. "They have recurring revenue models."

One example of changing technology models is the onset of new devices for users to consume information, and Faletra asked Kelley Damore, editorial director of CRN, to describe the company's upcoming launch of CRN on iPad.

The CRN app will provide a mixture of printed and online content as well as exclusive investigative pieces, channel market analysis, special features such as the Solution Provider 500, and access to database information on the channel market, Damore said.

"It will have analysis, videos and exclusive iPad features you won’t see online," Damore said.

Faletra also introduced three business executives whose companies he said were thriving during this time of change in the channel market -- David Powell, vice president of managed services with TekLinks, a technology services and support company from Birmingham, Ala.; John Shaw, CEO of New York-based cloud services company Nimbo; and David Geevaratne, president of IT and cloud services company New Signature, of Washington, D.C.

Powell said his company appreciates innovative technology from new companies and is not bound to stick with established vendors. "We are always looking at smaller players," he said. "We have established relations with vendors, but if there is a new technology, we want to look at it."

Geevaratne said his company has hired an economist who can talk with customers' CFOs and CEOs about market trends when making spending plans. "It's not about IT value; it's about business value," he said

Shaw said his business was "born in the cloud" and as such does not focus on legacy infrastructure. "We talk about cloud migration," he said.