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Channel Should Act Now to Survive Cloud Hype

Article date: Wed, 25 May 2011 11:30 GMT


The channel should prepare for a momentous shift in the way it does business as the popularity of cloud technology continues to grow.

At a round table event organised by Manchester-based hosting firm UKFast, a group of hosting experts discussed the impact of cloud technology on IT service providers. The panel issued a warning to businesses to prepare now if they want to survive beyond the powerful hype surrounding the internet-based technology.

Andy Burton, chairman of the Cloud Industry Forum said the opportunities that cloud technology presents to the channel are "phenomenal" but so far, few 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."

Burton continued: "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. 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."

Ian Moyse, IT security expert and EMEA Channel Director at Webroot outlined the fears that exist within the channel sector. "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. 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."

Moyse highlighted the chance service providers have to break into the cloud market.

"MSPs, XSPs and telecoms firms are understanding this market and making moves to break into it. 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."

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."

UKITA suggests channel partners can avoid missing out by promoting 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."

The panel discussed the opportunities available to channel partners, identifying the management of outsourced IT as a potentially lucrative gap in the market.

The accessibility and affordability of cloud will, the panel said, result in more businesses looking for guidance on using the new technology.

Other experts around the table were Lawrence Jones, managing director of UKFast, Simon Howitt, channel business director for Outsourcery and Andrew Saunders, head of product management and marketing at Zen Internet.

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