Cloud Computing is rapidly evolving the hosting marketplace with the big vendors seemingly eating into the supply chain setting up their own data centers and selling Cloud services direct to the customer. Yet dig beneath the surface and the Channel still has enormous value to add, it's just different to before. Cloud Aggregation represents the fastest single growing segment according to the latest Gartner research- so partnering with ISV's represents a massive potential growth area. Adding and bundling Cloud services can transform low margin capital intensive businesses into much more profitable ones. But not all Clouds are created equal, with organizations having Security, Data Protection, Proximity and Sovereignty concerns; Hosters have a massive opportunity to offer differentiated services and need not compete on price. Anders Trolle-Schultz and Justin Pirie, SaaS and Cloud Experts, will set the scene and take you through the journey of the new Cloud ecosystem and the roles the traditional Hoster can take in the emerging Cloud marketplace.
17. Software as a Service
IT-services delivered on-premise/off-premise
independent of the traditional perpetual
licensing models with focus on the services
delivered as a subscription based expense and
not the licenses or technology required to
deliver the services
18. Cloud Computing – one definition
Cloud Computing is a production method where
the Services are presented on-demand, self-
provisioned, scalable, and are billed per logical
unit used
29. The IT market is changing
Push to Pull
New Roles and New Players
30. Market is maturing because of Customer demand
• Economic climate
• We work/will be working differently
• Competitive needs
• Non-IT decision makers move into the choice of IT-
services
• Rapid changing technologies
• New Players in the game
31. “A "SaaS first"
policy is being
enacted in the
majority of small
and midsize
businesses”
Feb 2010
89. Where are we heading?
Hardware and Managed Services will
be included in the customer offerings
90. Where are we heading?
• Hardware part of the service offerings
• The big hardware vendors moving into the Service
and System Integration game
• Managed Services securing on-premises IT
• Subscription services as on-premises delivery
• Non-IT players move into the channel
• Cloud standards and regulations will come into play
91. Innovating the Service Delivery
Model is the key to market
growth
Traditional distribution models
(Groceries) will set the standards in
SaaS
92. The perpetual licensing model is still the dominating license model used
IT Delivery System as of today
ISV
Distributor
EndCustomer
Dealer
Partner
Facility
Management
Outsourcing
Managed
Hosting
Hosted Services
System
Integration
Vendor
94. Coca-Cola does it
• Factory
• Uses Wholesalers
• Different outlets
• Sales & Marketing Support
• Outsources production
• Nobody really knows how it is made
95. In Cloud Services we will see
• Factories
• Use of Wholesaler (Aggregators)
• Different outlets
• Sales & Marketing
• Outsources production
• Nobody really knows how it is made
96. Customer
Cloud Services distribution – the supply chain
Hardware VendorSoftware VendorHardware VendorSoftware Vendor
Hosted Services Production
Off-line
channel
Reseller
On-line
Channel
Portal
97. SaaS distribution – The future landscape
Customer
Distributor
Off-line channel
ISV
VAR On-line Channel
PORTAL
Online
Partner
SI
Hardware
Vendor
Software
Vendor
Partner Hosted
Production
Hardware
Vendor
Software
Vender
Online Services
of the ”Big
Ones”
99. Where is Europe heading?
• Uncertainty as to when EU starts regulating in terms of
• Location and ownership of Data
• Privacy
• Security
• Etc.
• EU has Cloud Services/Cloud Computing on the Digital Agenda
as one of the tools to make SMB/SMEs more efficient and
competitive
• Open Source vs. established vendors (established mainly
American vendors)
• More than 50% of the Open Source community is based in Europe
• Google and other American Cloud Providers are facing
resistance from local European governments
100. Where is Europe heading?
• UK, Holland and Nordic countries at the forefront of SaaS/Cloud
enablement
• Central and Eastern Europe infrastructure challenges
• Internal penetration
• Cost of using services outside of country
• ISVs not moving to develop and deliver through Cloud Platforms
• Marketplace (aggregators) “non-existing” (SaaS Plaza, Cloudmore)
• Which platform to choose from
• Enterprises work directly with Vendors
• Local/Regional “Clouds” will dominate the coming years
102. Nobody can play all roles
Multi Tenant Hosted
Services
Dedicated Hosted
Services
Facility Management
Helpdesk & Support
Billing&Provisioning
Sales&Marketing
ConnectivityServices
Technologyenablement
Vendor
ISV
Vendor
ISV
Vendor
ISV
Service deliveries and customer offerings
In the
Cloud
Services
On
Premise
Services
Existing
traditional
Systems
End
Customer
System
Integration
System
Integration
Consulting
Migration
System Integration with
on-premise IT
103. Opportunities- Roles to be filled
• Remain the Trusted Advisor (business processes)
• Technology enabler- ISV’s and Customers
• Strategic advisor on technology and Cloud Service
choice
• Syndication / Aggregation of Cloud Services
• Deliver in
• SaaS
• PaaS
• IaaS
• HaaS
• New partner models
• ISV enabler
For the first time in history, consumers have access to better IT at home than at work
And consumer facing innovation is driving the market
The infiltration of technology in our personal lives is now reversing back into our corporate lives.
Oh and subscription businesses are worth 2-3x a services business.
Double edged sword
Cloud Represents a Perfect Storm for Channel partners
A shift from Capex
To Opex
A shift in focus
And a shift from a technology focus
To a business focus
So why is the cloud so scary for the channel?
The cloud offers a lot of what the Channel used to.
Disrupts the financial model
And the skills
We’ve seen this before in other industries
Like the travel business- how many people go into a travel agency to book holidays these days?
I can’t remember the last time I went to a travel agency- with kayak and comparison sites- I never go there.
If you do it’s because you want service- a package, a solution, personalised without any hassle
Although cloud adoption has been growing rapidly, it is still unclear where and how the channel can and will add value. Because of this, channel companies have been hesitant to invest, leaving end users with limited access to help when they need it.
The challenges facing enterprises building private cloud services or leveraging public cloud services are significantly more complicated than just the technology. Fundamental change is needed in culture, business models, IT architecture, service management and politics — all opportunity areas for the channel to provide business consulting, but very different from the channel's traditional role.
Greenfield sites
Business processes
Hybrid architectures
Mean professional services
Cloud readyness- tidy up the ecosystem
Carrot and stick
Any company that relies on the product transaction (hardware or software) to drive attached services revenue supported by ongoing maintenance contracts will have to rethink how and what it offers its customers today and in two or three years.
If traditional channel partners don't react quickly enough to the changes in the market, they will be replaced by other channel partners in their accounts.
More and more IT providers are attempting to go directly to end-user customers with their cloud solutions only to find out that customers need more than they are willing to provide. This will mean increasing channel capacity to meet demand.
The two biggest challenges facing IT providers today are the lack of capabilities contained in their current partner ecosystem and the lack of new entrants with the skills required to further the adoption of various cloud services. Without these capabilities, the entire market will have slower adoption, regardless of the service.
Cloud Pro Services in Europe today is $560 million in 2010
European Enterprises Will Spend $8.2 Billion on Cloud Professional Services in 2015
The new IT environments will have elements of traditional IT, private cloud, and public cloud, and management and integration will become a challenge for which European enterprises will typically choose to hire an external service provider, driving further growth in the cloud professional services market."
IDC sees a clear trend that new outsourcing contracts include cloud services, and as much as 25% of cloud professional services will be delivered as part of outsourcing contracts. This has a major influence on the choice of provider for professional services as well as for cloud services: the provider needs to be able to manage both the traditional and the new environment under one contract and needs to be able to migrate larger parts to the new environment during the life of the contract.
"Some believe that cloud is just plug and play, but that is not the case for the more complicated existing or new solutions. So professional services will not go away, but they will change and in the longer run beyond 2015 — when migration is complete — account for a much smaller proportion of IT costs.
"Another important point is that service providers need to prepare for the rapidly growing request for cloud professional services and have the resources available. Right now, demand is mainly for business cases and roadmaps, requiring both business competence and architectural competence, but on a limited scale. But in a just slightly longer time frame, most if not all consultants need to understand cloud. Vendors have substantial investments ahead of them in creating the necessary capabilities to support this rapidly evolving market."
So I think the Channel needs to embrace the Cloud
Or face irrelevance….
So what to do now?
The most important thing is to retain the status of the trusted advisor
Which means you need to be educating the customers, not them educating you
Cloud is an Evolution and a Revolution
So we can’t stay the same can we? Otherwise we could end up like King Canut trying to repel the tide. Obviously the channel needs to evolve
http://en.wikipedia.org/wiki/File:Cnut_the_Great_Obverse.jpg
Cloud Services Brokerage- where you aggregate Cloud Services and provide Solutions to your Clients
Through 2015, cloud service brokerage (CSB) will represent the single largest revenue growth opportunity in cloud computing. The channel has an opportunity to play a significant role in aggregation and brokerage services, yet few have begun to invest in becoming a CSB.
So this brokerage thing- let’s dig into that. Can you really start to make money from selling Cloud Services?
Eat your own dog food
Hi My name’s Justin Pirie
I’m the Cloud Strategist here at Mimecast but I’m best known as an Analyst Blogger in the SaaS and Cloud space.