Channel firms need to wake up to cloud — whether they like it or not

The channel needs to face up to the challenges of offering cloud-based services, or risk being left behind, a panel of industry names has warned.

The group of execs recently gathered at a round table event organised by Manchester-based hosting firm UKFast to discuss the impact of cloud technology on IT service providers.

Ian Moyse, IT security expert and EMEA channel director at Webroot said: “At every level of the channel there is a vested interest in their legacy product-based business and they are worried about the cannibalisation of their existing revenue into a more effective, lower-cost model which is more erratically paid.

However, he added: “The prospect of going from being paid up-front to a yearly or two-yearly payment presents a financial challenge but it’s a challenge that the channel needs to wake up to whether it likes it or not.”

Andrew Corbett from the UK IT Association (UKITA) said: “A lot of partners know they can’t deliver on cloud so they are telling their customers that they shouldn’t want it.”

He suggested channel partners promote their services as part of an eco system of suppliers: “They can bolt on the services of software developers and implementers to their own offering as and when needed to allow them to compete at a high level. They can call upon trusted associates in order to cater for their customers’ needs instead of doing the King Canute thing and thinking their fear is enough to put their customers off.”

Andy Burton, chairman of the Cloud Industry Forum agreed that the opportunities that cloud technology presents to the channel are “phenomenal” but so far, few resellers are embracing them:  “The channel is talking the talk of the cloud but it’s not yet confident in how it can deliver it as a value-added proposition.

“The important thing is that channel partners use the relationships they have with customers and develop a clear perspective on how the customer migrates part or all of its capabilities to the cloud,” he advised. “They need to think about how their customers can migrate, and the where, the why and with what technologies. Then they need to be able to facilitate it. Without a proposition they will lose out.”

Moyse pointed to the MSPs, XSPs and telecoms firms that have already started to move to the could model. “They understand the pricing model, they have a customer relationship and they can now supply something different. Certainly, the channel market as we know it is going to change.”

However, Arrow ECS (UK) MD Steve Pearce recently said resellers should approach the cloud with caution: “Before we get to the wonderful vision of pure cloud and pay as you go there are a number of barriers...Stop and walk cautiously at it.”

He added that he believes the cloud opportunity is currently “still a product one” for next two or three years.