Very Clever Variable VARS

8/7/2019 Very Clever Variable VARS

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Very clever variable VARs Clive Longbottom, Service Director

Quocirca Comment

Very clever variable VARs http://www.quocirca.com © 2011 Quocirca Ltd

As Dylan may well have put it: 'The markets,they are a' changing.' But surely, this was everso? The reseller has always had to change withthe times, adding extra value to stay ahead of

the game – and so stay in business.

This may well be so, but as the continued churn

of resellers shows, not all members of the

channel are equal, and many still believe that a'bring ‘em in, ship ‘em out' approach will pavethe way to financial riches.

For some, this has been the case, even as there

has been a move through in-house codedapplications requiring servers of all sorts of

different types, through to commercial, off-the-shelf software (COSS), through client server andweb-based applications, there has still been the

need for resellers who can shift tin or software

into the hands of the buying organisations.

Will this remain the case, though? If the

indications are true, there will be an increasing

uptake of cloud computing, and this will stressany reseller who does not manage to get theirnew approach sorted quickly.

If a long-term view of cloud is taken, then thefollowing scenario would be the ultimateoutcome. An organisation has 'thin' IT in-house,

covering the provision of access devices only. Allmain computer functions, whether these be at a

commodity level (such as email, collaboration,file sharing, web presence) or process level

(attracting prospects, turning prospects intocustomers, achieving optimal customer lifetime

value) will be pulled in as needed from the cloud.

This has a direct impact on the reseller. Thestandard components that they have sold before(hardware and software) are now owned and

managed by someone else: the cloud provider.For most resellers, it will not be possible to try togate crash the cloud providers themselves; thebig providers will be cherry-picked by the

marauding hordes of the large hardware players

and their best pals in the channel.

There will be the chancers in the cloud market -those who think they will be able to beat Google,Amazon, IBM, Dell, salesforce.com and theothers by doing cloud on the cheap. Any reseller

dealing with these guys had better make surethat payment is made up front before supplyingthese types with any hardware or software.

So where can the channel make money?Although it is a new game, there are a lot of opportunities. Firstly, the ultimate outcome

outlined above is actually quite unlikely. Mostorganisations will end up with a hybrid

environment: some based in existing internaldatacentres, some of which will be turned into a

private cloud, some co-locational private cloudand some public cloud.

Don't jump to the illogical conclusion though that

this means that the first opportunity is to focuson this rump of the internal datacentre. This willbe where legacy applications remain; those

where the existing investment is seen as being

high enough that the asset has to be sweated asmuch as possible, but new investment in it willbe minimal.

What there will be is a need for a one-throat-to-choke channel; one who deals with the collisionpoint between the internal and external clouds,

one who can provide an external view and adviceon how any changes to the business processes

can be managed and facilitated through bringingin new technology.

The new VAR will have to aim for flexibility and

learn how to deal with adding value to a service,

not to providing the service itself.

For example, if an organisation wants to move tocloud-based email, it may still need management

of its information to avoid data leakage, so theVAR could look at finding and providing this as aservice through a cloud provider offering securityas a service.

If the organisation is looking to move its CRMsystem to the cloud, the clever VAR can help in




either managing the connection through to ahosted CRM service, such as salesforce.com, orthrough to a set of functions that can be brought

together on the fly to create a compositeapplication that can deal far more flexibly withfast-changing business processes as required.The very clever VAR will manage this functional

aggregation, and make a lot of money in doingso.

The VAR becomes the point of aggregation, the

owner of the main contracts between thecustomer and the cloud providers and embedded

in the provision of IT as a service to the

customer. This is a far more 'sticky' relationshipwith the customer, one far more difficult for thecustomer to unwind than one where the reseller

is just a supplier of hardware or software.

Of course, this all needs a change of thoughtprocess, of approach and of agreements with thenew suppliers. Cloud providers that have

historically tried to go direct to marketincreasingly have to find resellers thatunderstand the market and can help thempenetrate markets that are realising that cloud is

not as simple as some have made out.

By all means, fight the trend, and watch as yourrivals move to models with no inventory, with

subscription revenues rolling in on contracts thatessentially self-renew. Watch as you try ever

more desperately to sell tin and software, as the

world moves to being supplied with functions asa service.

It has been a tough world out there for the

channel for many years. It will remain tough, butcloud could be the last straw that breaks manybacks. Face up to it and be prepared.

This article first appeared on

http://www.channelweb.co.uk




About Quocirca Quocirca is a primary research and analysis company specialising in the business impact of information technology

and communications (ITC). With world-wide, native language reach, Quocirca provides in-depth insights into the

views of buyers and influencers in large, mid-sized and small organisations. Its analyst team is made up of real-

world practitioners with first-hand experience of ITC delivery who continuously research and track the industry

and its real usage in the markets.

Through researching perceptions, Quocirca uncovers the real hurdles to technology adoption – the personal and

political aspects of an organisation’s environment and the pressures of the need for demonstrable business value inany implementation. This capability to uncover and report back on the end-user perceptions in the market enables

Quocirca to advise on the realities of technology adoption, not the promises.

Quocirca research is always pragmatic, business orientated and conducted in the context of the bigger picture. ITC

has the ability to transf orm businesses and the processes that drive them, but often fails to do so. Quocirca’smission is to help organisations improve their success rate in process enablement through better levels of

understanding and the adoption of the correct technologies at the correct time.

Quocirca has a pro-active primary research programme, regularly surveying users, purchasers and resellers of ITC

products and services on emerging, evolving and maturing technologies. Over time, Quocirca has built a picture of

long term investment trends, providing invaluable information for the whole of the ITC community.

Quocirca works with global and local providers of ITC products and services to help them deliver on the promise

that ITC holds for business. Quocirca’s clients include Oracle, Microsoft, IBM, O2, T-Mobile, HP, Xerox, EMC,

Symantec and Cisco, along with other large and medium sized vendors, service providers and more specialist

firms.

Full access to all of Quocirca’s public output (reports, articles, presentations, blogs

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Very Clever Variable VARS