Bengaluru: Cloud adoption in the enterprise has undoubtedly accelerated in recent years unlike in the past. The Channel too after introspection, now believes that cloud is a profitable business and has delved deeper into offering cloud-based services. But even though cloud brings a lot of rewards for the channel, there are still some challenges that partners need to address going forward.
Based on this assumption, a recent report published by CompTIA called CompTIA’s 6th Annual State of the Channel study highlighted that while 4 in 10 channel firms stated cloud as the key reason to be optimistic about the channel’s future, nearly two-thirds identify cloud is not having a positive impact on their business. [Read the full report here]
Hence its time for a reality check, to stop and ponder about these challenges. Here are some reasons why Channel is still not comfortable with cloud, according to the study.
Lack of self-assessment
According to the report, In 2014, 57 percent of respondents assessed their cloud business as mature and strategic, this year that number plummeted to 34 percent. Instead, the bulk (49 percent) of channel firms described their current experience with cloud as somewhat mature, while another 14 percent said their cloud efforts remain in pilot stages.
End-customers become self-sufficient
A stress point for the channel has crept in as cloud is maturing. The self-service aspect of cloud solutions allows end customers today to easily move to a SaaS application. It hands over the compute capacity directly over the web from a public cloud provider such as Amazon Web Services or Google. customers are opting for SaaS offering instead of buying software and installing it, or getting an additional hardware to support it. This puts Channel partners at the backfoot.
Vendors reap maximum profit
Similarly, many channel partners are also apprehensive that vendors offering cloud solutions and services will involve in direct sales. This may eventually lead to fading the role of channel partners with the end consumers while invariable bringing down large chunk of their revenue.
Meanwhile, channel firms view vendor-based perks such as sales spiffs, volume or upfront discounts, back-end rebates and technical training provided as less important to their bottom line. The top reason vendor benefits have declined in significance is that channel firms say they are relying more on their own sales and marketing efforts, states CompTIA report.
The idea that channel partners typically have reach to a target customer base the vendor cannot reach on its own may not hold water anymore.
Dynamic nature of technology hits cloud
With technology changing dynamically, cloud is no exception. Channel over a span of years comprehend it and convert into best practices. Now with its changing mode of offering, is it possible for the partners to leave or change sooner as per the demand with heavy investments already made.
All of this data suggest an element of “having bitten off more than one can chew” by the channel. Firms that two or three years ago dove headlong into a number of different cloud offerings or business types are now, in hindsight, realizing that they did not foresee some of the challenges. Did they pick the proper cloud business model to fit their skills, size and customer demographics? Did they choose the right cloud vendor partners to work with? Did they determine the right pricing strategy and calculate time to ROI effectively? Falling short in any of these areas could lead many a channel player to pump the brakes a bit before determining how next to proceed, according to the study.
There revelations indicate that even after coming so far and after several years of aggressive cloud activity, have we almost reached where we have started from. The channel looks to have entered into what may be called an alternation or modification mode.
On the contrary, partners can gain tremendously if they know how to leverage cloud, as its potential is immense. For example, India at present is a prominent market for cloud technology adoption. The overall Cloud Market in India in 2016 is pegged at $3-3.5 billion, of which the Public Cloud share would be $1.1-1.2 billion. The cloud spending in India will further exceed to $10 billion by 2020 says research firm, Zinnov. This clearly indicates huge opportunity for the channel community.