Cloud Computing: However you see it, Sit Up and Think.

If you haven’t experienced cloud computing and its effects in the ICT Channel then you are a very rare breed. In fact, you’ve just lost your unique status if you are reading this post as the CowShed also resides in the cloud.

It shouldn’t come as a surprise to learn that cloud computing was with us even before it became the buzz word that now adorns the myriad of advertisements we see on billboards and in magazines. This term has always been used by technical professionals to describe  the processing of data in a non-specified, known, or static place(s). It is only now as the technology becomes more available, that the term ‘cloud’ has been coined by those able to commoditise it to the point where it risks over-simplification.

There are many well respected peers in our industry who selectively revoke the use of the term purely because its over-use allows many to overlook the finer points that determine its niche. And, whilst the popularity of the term is welcomed by those looking to open up new conversations, it’s important to remember that as a technology, it is cloud that enables services such as SaaS and the like to exist. As a market, we should be careful not to confuse the two despite their frequent interrelationships, although now, given that adverts like the one below are in circulation, highlighting this definition seems more like splitting hairs. Perhaps now, Cloud is no longer just a technology, but the ubiquitous classification for the revolution in the way in which we deliver technology to the markets?

The evolution of the technology that supports cloud services has allowed more traditional technologies to step aside for more affordable and consumable solutions to develop. Where our channel once thrived on conversations around predictable hardware and software purchases, new focus is placed on the services that evolve from the growth in these services and how it encourages early adoption. Even vendors who previously hedged their bets on three/four year hardware refreshes are forced to dramatically revise their approach to the way they survive and grow. For the majority, long gone is our dependency on the sale of ‘tin’ and in its place is the growing demand for the latest technology, at the lowest price, in a way which fuels the consumerisation of our trade: on-demand.

Cloud, virtualisation, Green IT, Social Media/Commerce, Business Intelligence, Digital Convergence, Mobility, et al, all require a new set of rules, roles, understanding, and a system that permits a collaborative way of thinking. Evangelists, pre-sales technical specialists, and Trusted Business Advisors (TBAs), will grow in popularity and replace those who still rely on the outdated just pick up the phone and sell sales technique. Those who continue to hire and train their staff without acknowledging the need to rejuvenate their sales people are giving themselves further cause for concern. Should your clients know more than your sales team do, or your business fails to raise the level of understanding for what this technology could offer within your client base, you risk either or both parties leaving your business in search of those who can.

Within our channel itself, the relationships forged between vendors and their partners have accelerated much of the interest shown within this market. Whilst it potentially could act as a double edged sword for their partners, vendors also choose to approach and advertise directly to end-users in order to drive further awareness and demand. Interestingly, as a key link in our supply chain, the role of distributors are still worryingly one, if not two years behind where they need to be in order to adequately support the needs of our channel. Traditional strategies of distribution choke at the prospect of adapting to new demands these technologies make that in turn require a dramatic overhaul of not only their internal structures as well as their mindsets.  With everyone trying to fight for a piece of the pie, it’s not just an unnerving prospect for the account manager whose only steady focus is now only their regular wage, but one that could unnecessarily encourage an overwhelmed customer to stick to what they know and thus sacrificing the potential these new opportunities offer.

This problem doesn’t just lay at the feet of account managers and their customers; with Microsoft BPOS/ Office 360, Google’s Application suite, as well as a whole host of third party cloud-based apps, our market risks encouraging the over-consumerisation of technology and therefore brings into focus the question of where the VARs and MSPs can add recognisable value. Thus presenting real opportunities for those wishing to move away from an MSP-centric approach and concentrate on doing what it takes to become a TBA instead.

Those responsible for the sale of technology in today’s market should be finding it more and more difficult to sell purely for short-term gains. Low-cost up-front capital investment dictates this and it is only in building a long-term relationship that will help establish long-term profitability. It’s now in our interests to give the client what they need, even if that means we have change of mindset from what they think they want.

The economic pressures we currently face can tempt many to shy away from this particular challenge because it requires a conversation that draws on something more than technological strategy (think unnecessary CPU upgrades that fail to address storage under-utilisation). It demands the case to be made that guarantees ROI that appeases more than just the IT Director. What is needed is a healthy and justified balance between the two so that the role of ICT within business can be seen as a key component to any business strategy. The coming months may be rough for some, but a long-term approach like this supported by achievable short-term goals will certainly help brace businesses over the next few years. In overlooking the bigger picture, VARs could easily label themselves as MSPs, and MSPs will not not have what it takes to become a TBA; and all because we ourselves are trying to consume new trending technologies without necessarily investing the time to develop an effective approach. If we are guilty of it, then who are we to try and re-educate our market? It’s time to take eating our own dog food to another level.

Sales and marketing departments must rethink their methodologies to suit this new landscape created by technology and this in turn will lead to their management revisiting the way they recognise success. Where there was once a compelling reason for VARs to adopt their Vendors’ co-branding, the big guys in our channel now have agendas so independent at times of their small counter-parts that it forces serious consideration before any new communication strategy is devised.

Ironically, whilst some distributors are necessarily sufficiently prepared, they are, for vendors, a reliable vehicle for reaching out to their partner base. Vendors that fund  and outsource particular responsibilities to their distributors can be a win-win-win since it helps create a positive scorecard, offsets the reduction in revenue for the middle-man, and offers resources that would be otherwise unavailable to lower-end partners. But, whilst the tri-relationship blossoms, many distributors still fail to go beyond their immediate challenges and offer relationships that add relevant value to their customers. Whilst there has been substantial steps made towards overcoming this in the US such as Ingram Micro, other nations seem slower to adapt. It is more than likely that until those supporting or experiencing demand otherwise, there will be little to compel the majority to consider an overhaul to their approach in our channel.

Regardless of our place in the channel, our industry will experience significant fall out over the coming months. Those who fail to recognise that it is not necessarily their customer or their supplier that knows best but a combination of these supported by their own professional competency. Opportunities are shrinking for those who overlook these factors, particularly for those who fail to regard education as a cyclical and constant process. Our industrial sandpit will ultimately be filled with those who have the drive to create the demand in our market. This will all be made easier by using a methodical approach that carefully blends knowledge, experience, and a qualified understanding of what they market demands now and in the future.

Those within your organisation who demonstrate a flare and passion for re-framing and integrating new revenue streams that embrace these technological trends should be encouraged. Those responsible for their management should be encouraged by their dynamic approach and should endeavour to replicate this approach throughout the rest of the organisation in order to further strengthen their market presence.

The ICT industry will always be changing but for now, those more financially stable are currently creating the wave that we can follow or ignore. What’s important for your business is to position it in a way that you can capitalise on the skills and strengths. It will be your abilities that will give you the edge needed to become that purple cow in our already crowded market.

Whilst the ‘overnight success’ of these technologies have been on a slow burn until now, we are at a point where large corporations are encouraging the whole market to sit up and think. It will always be your choice to ignore or embrace the latest coined phrases or terminology, and your choice in how you accommodate it within your business strategy. The awareness within our market has made our end-users more comfortable our terminology more than ever before, and with the advancement in prosumerisation*, if you aren’t able to facilitate or manage their demands, be prepared to step aside and let someone else take your spot.

Further reading:

Top 10 Strategic Technologies for 2013

Susanne Dansey is the Managing Director of Purple Cow Ideas Management – an organisation that facilitates a paradigm shift in the collaborative nature of the ICT Industry. You can follow her on Twitter and join the conversation on Facebook.

*Prosumerisation – where the customer expects the same level of access to technology that they experience at work as they do at home, and vice versa.


5 thoughts on “Cloud Computing: However you see it, Sit Up and Think.

  1. Hi.
    Firstly great blog and love the vision of the CowShed. Good work.
    My cents worth is that the cloud market is full of the standard confusion and noise that always gets in the way. However, there is a big difference. For the first there is a reset in skills, thought leadership, understanding and cost models. The traditional ways of sizing, pricing and selling are up for grabs and the channel lacks true depth. This is no ones fault and not surprising but we are all trying to run before we can walk. The great thing is that we are all getting there in a much accelerated state because customers want and need cloud.
    Agree with the last point re cloud as a word. Imagine.What would be talking about if cloud was just something in the sky? Optimization of datacenters? Maturity? Remember Gartner and CMM? Oh yes!

  2. Pete:

    So “fixed-cost” doesn’t mean not flexible. You determine a set of services that are delivered on a fixed cost basis. But, if you add to that, you’re adding to cost as well. So the elastic nature of the cloud allows it to grow, and you do pay more for that. My intention is that “fixed-cost” or “fixed-services” is just that rather than pay for things based on ‘time’, customers pay for things based on use, a list of deliverables, or based on technology.

    I think I disagree on the responsibility — a customer/end user can delegate those responsibilities to the provider, and in the sense of some managed services providers, that’s exactly the kind of vendor management that is delivered in a high-end white glove scenario.

    I’m not sure we’ll be able to separate Cloud and Managed Services. When delivered well, they may merge and be one and the same as a set of services delivered ongoing.

    • Hey Dave

      Whilst I agree that if the MSP prices their services correctly, then yes pricing flexibility can be easily achieved, however, not all Managed Services are going to be able to provide the elastic extension of services. A lot of MSP are managing appliances and therefore cannot provide the on-demand expansion to what the customer’s needs/wants are, and can defiantly not provide the automated de-provisioning of services, whereas Cloud can.

      So the question is to all existing MSPs, is are you staying as an MSP or are you able and/or want to change your model to that of a Cloud provider?

      Also I’m a bit concerned that you only think you agree on the topic of management and who owns this. If we look at the three very basic tenants of Cloud computing we have SaaS, PaaS and IaaS. The one thing that these three pillars have is “as a Service” )and the “as a” is the most important part). What you do with that service is entirely up to the end user, the only responsibility the Cloud provider has is to keep the “Service” running. If we look at two giants in Cloud, and Amazon they really have no other responsibilities. With SFDC its the customer responsibility to manage the provisioning and de-provisioning of users and also what each user can and cannot see, in Amazon’s case its just provide a server, and the end user does what they want. Even in Amazon S3 the customer is still responsible for their encryption key, not the vendor.

      I believe that as the Cloud Market becomes more mature that there will never be a more important time to differentiate between MSPs and Cloud providers. As it stands today Cloud is already a term that is battered around too much.

  3. Hey Dave

    Can you please expand more on what you mean by “fixed-cost or fixed-services deliverables”? Surely the term “Cloud” implies elastic? So in any Cloud environment there should be nothing really that is fixed. Costs should be as flexible as the services are as should be the deliverables.

    Also Cloud services are not the whole responsibility of the Cloud provider, therefore cannot be a complete managed service in the sense that we mean today. In any Cloud infrastructure there is going to be the need of the end user to manage or maintain some part of this “hosted” (for want of a better term) service.

    I think as the Cloud matures we will need to make a clear demarcation between Cloud, Managed Services and even CoLo as lots of people out there are mixing all 3 of these concepts up.

  4. Susanne:

    Perhaps we’ve found a good disagreement, as I take a slight issue with “Thus presenting real opportunities for those wishing to move away from an MSP-centric approach and concentrate on doing what it takes to become a TBA instead.”

    In fact, I think “Cloud” is the ULTIMATE Managed Service. Managed Services have long promised the idea of technology as a service, or fixed-cost or fixed-services deliverables, helping customers achieve their goals through a different approach to technology. Cloud can be the best way for MSPs to deliver these technology solutions, and really deliver on the promise of managed services.

    The two aren’t opposites — in fact, I think they align much more than they conflict.

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