The Channel’s Role in the Cloud: It’s Still about Relationships

With 2011 drawing to a close, we’re starting to see several predictions for what the next year will hold. On the subject of cloud computing, Forrester’s James Staten made some interesting observations.

Staten’s comments about the channel got me thinking; “channel” is such a broad term. He rightly points out that with offerings available directly from providers, “reselling isn’t good enough anymore.” Yet the counterpoint is also reflected in his comment: “For the channel to survive it must add value around cloud services and there’s plenty of opportunity to go around.” I agree with both statements.

For the channel organization that partners with a cloud provider and adds value in the form of support, customization, or other value-added services, the cloud is a tremendous opportunity to create a recurring revenue stream. However, if it passes on the cloud provider’s offering to customers with little to no value-add other than processing the transaction, this industry shift may challenge their bottom line.

On the other hand, applying a customer segment lens to the role of channel partners highlights that organizations look for and require different things from providers based on their needs and internal capabilities.

For small to mid-sized organizations, partners are a critical sales and support channel where less may be discussed about technology implementation, and more about how that organization can benefit from the IT investment. Cloud definitely simplifies implementation, but does not remove the need to adapt technology to solve business needs. With IT spending freed up from implementation, customers will spend those dollars on technology to solve higher level business needs. This is something that larger organizations almost always did, but now smaller ones can afford also.

The mapping of technology capability to business requirements needs solution expertise and provisioning. Partners that understand their customers’ business and maintain that local relationship will continue to be an important ingredient for success.

Channel partners are also a key resource when it comes to managing parts of an organization’s operations where there might not be sufficient in-house expertise, such as security. Many organizations need clarity on the security features of different cloud offerings. Partners often have demonstrable credentials in the area of security (such as the Microsoft Identity and Security Competency) that make them trusted advisors for the organizations they serve.

The cloud might be a game-changer for organizations in terms of flexibility and cost savings, but the fundamentals of sound business planning don’t change. Rarely, if ever, does an organization have the time, resources and expertise to make all of its business decisions without consulting outside experts. The region and organization-specific expertise that channel providers (check out Microsoft’s Partner Network) bring will continue to be integral to successful IT in the cloud.

About the Author
Adrienne Hall

General Manager, Trustworthy Computing

Adrienne Hall is a General Manager in the Microsoft Trustworthy Computing group, where she leads a team of information technology (IT) professionals who are focused on the security, privacy, reliability, and accessibility of devices and services built on Microsoft technology. Read more »