Channel cautious over cloud opportunity

News Channel Pro Jan 15, 2013

IAAS less prevalent but 83% expect growth from cloud revenue while on-premise likely to remain static.

The channel is taking a more cautious and increasingly mature perspective on the opportunity offered by cloud computing, according to a research project undertaken by the Cloud Industry Forum (CIF).

The survey, which asked 150 senior decision makers from MSPs, technical VARs and systems integrators across the UK and Ireland, compared data against a similar study carried out in 2010. The responses suggest a consistent number of 63 percent of organisations offering cloud based services.

One marked change from the original research however is that while the number of businesses offering SaaS-style solutions moved ahead slightly from 79 to 81 percent, those claiming to offer IaaS decreased from 51 to 29 percent.  

The results suggest that channel organisations are preferring to sell specific solutions rather than bespoke solutions or components, and that these solutions are likely to be in specific application areas rather than the wholesale movement of business activity from on-premise to hosted or cloud.

Andy Burton, chairman of CIF comments: “This research is quite revealing about the levels of confidence and attitudes about the opportunity for cloud services as a viable business for the IT channel in the UK and Ireland. On the one hand it shows healthy progression from hype and over-optimism that follows any new market trend toward a more healthy and tempered outlook. But arguably it shows a greater sense of caution than I would have expected at this stage.”

Other declines based on comparing surveys include a drop in channel businesses which actively consult on the delivery of cloud services from 87 to 73 percent. When asked to comment on the barriers they face selling cloud services as part of their portfolio, the primary issues cited related to data security and privacy, poor internet connectivity at end user sites, contractual expectations of customers and data portability concerns. They also said that cultural change was a real issue to manage.

However, 83 percent of those participating in the research stated they expected their revenue from cloud services to grow over the next three years while they believed their on-premise based revenues would likely remain static.

Comments Burton: “Most participating MSPs, SIs and VARs taking part do see cloud as instrumental to their future business, but it seems equally clear that there are many practical organisational challenges facing them in changing their business models from a classic on-premise supplier to a 24/7 cloud service provider. I am encouraged at the tenacity and commitment being shown to offering cloud services as part of their strategic future but it is clear there are hurdles to overcome as an industry.”

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