Channel Chiefs Sound Off On Cloud Opportunities, New Business Models

Where Is The Greatest Growth in the Channel Right Now?

How can vendors and their channel partners leverage the cloud to deepen their relationships around startups, security and the data center? During a roundtable discussion hosted by CRN last month, top channel chiefs from Dell, NetSuite, Sophos, Toshiba and VMware talked about the health of the channel, the financial windfall from AWS' add-on security service and the push by solution providers to expand beyond their core competency.

Frank Vitagliano, vice president of North American channels at Dell

I would argue the channel as a whole is as healthy as I have ever seen it. … And the opportunity is large, and continues. … Obviously with our set, we're pretty broad. So I see it on the client side. A lot of that was driven last year by Microsoft conversion. I'm seeing it in the data center focus, tons of data center focus. The storage area is really, really hot right now. Server, storage, networking, it's really across the board.

Craig West, vice president of channel sales at NetSuite

We see it either from the traditional midmarket VAR, or the Microsoft VAR, the Sage VAR, the SAP VAR, those communities that want to have a pure cloud offering to bring to their customers. We also see [growth] in the accounting firms where cloud has been a great reuniter of those consultants back to ERP. … We [also] see a lot [of growth] in the entrepreneurial start-up community. Folks that have sold a Microsoft practice, or sold an SAP practice have to find their second act, are really coming to us and saying, "If I'm going to do this again, I'm not going to be encumbered by legacy, or on-premise revenue streams. I'm going to do this with a proper recurring revenue model." … 20 to 25 percent of the partners we'll add will be in that category.

Frank Rauch, vice president of the Americas Partner Organization at VMware

We're seeing [growth] in guys that really want to build businesses, and drive what I would consider to be creative revenue streams that they never had before. So in other words, basically, the data center guy is getting into mobility, getting into device management, getting into work space management, et cetera. Getting into big data. Guys that have never done security before partnering with Palo Alto Networks and VMware to be able to build out that business. So people that are like, "Hey, I've got a great core … selling servers, networking, compute, et cetera. Now I want to expand beyond that." And they're the guys that are doing really well.

Richard Vaughn, director of channel sales at Toshiba America Information Systems

We're actually seeing a lot of requirements for just pure notebooks. But with that we're also starting to see the need for more cloud-type devices. … As you're looking at the education market, you've got Chrome out there. That's purely the cloud environment. And that's definitely exploding, and you're starting to see that migrate into other areas of the business. We're seeing it in SMB, we're seeing it in health care, we're really seeing a lot of it in human resources groups and major corporations. … You're still having fantastic growth with the traditional DMRs, whether it be in an SMB-type environment, or a [medium-large] type environment, or health care environment, we're seeing good growth. The RFP pipeline right now has never been bigger. I've been here 18 years, and I've never seen the expansion that's going on right now.

Mike Valentine, senior vice president of worldwide sales at Sophos

The fastest growing cloud for us is [Amazon Web Services]. We're making a ton of money. And it's ramping faster. We're having to hire and build teams in Seattle, in New York, in Tokyo. That is, without question, almost out-of-control fast. … If you spin up a server at AWS, if you want security, check "secured," it's our firewall. … Now that's cost us all kinds of commission problems, quota problems, but the money is definitely there. … It's just a check box, right? You want to spin up 300 servers for 20 minutes, you want those secure? Everyone says yes. And they pay another six, eight, 10 dollars to secure it, and it's been fantastic business.