Resellers in the SMB space often have closer relationships with their customers than their larger counterparts, says Chris Ichter, Small, Midmarket and Partners director for Microsoft New Zealand.
And now thanks to the cloud, he says, they can also offer enterprise-grade services like in no other time in the past.
“When we look at the SMB, first of all the fact that we now have cloud offerings, we are actually giving SMBs the ability to punch above their weight and use tools at small cost and at the level of security and reliability they wouldn’t have had access to before,” Ichter says.
“The SMB by consuming as services have access to something that at this point was just available for enterprise and as you know New Zealand is mainly an SMB country. When we look at the adoption of Office 365, it is eight times faster than it was for BPOS, the previous version.”
Ichter admits that for some activities, such as web applications and email, SMB customers will see no reason for dealing with resellers, especially if a company is a sole-proprietorship or has very few employees.
“If you’re a bigger SMB and if you have 10, 15 people on staff, you still need to have a migration and one tool will not fit and answer all your needs,” he says. “So what I see among resellers is they will become more and more cloud brokers, or cloud aggregators by offering different solutions provided by different vendors and then bring the glue around different services.”
“It’s not just because you have Office 365 or that you can run your business, you need other tools software and service. It’s whether the reseller can aggregate these differing offerings from different vendors and bring some services around them and package something which would be a end user solution. If they just transact a product, there’s not much value to it, but if they become a cloud aggregator, then that makes sense.”
Ichter sees the business of reselling technology moving away from the traditional model with non-traditional players competing against traditional ones, with complacent businesses fading away over the next few years.
“First of all, there are those that aren’t really IT resellers, like Xero or BNZ or a chamber of commerce for that matter, that want to provide a service to a customer but aren’t IT specialists,” Ichter says. “So building an IT service to sell their service is something they haven’t done, but using the cloud they actually access an infrastructure and that is something that they’re eager to do. This is something new coming to the market.”
“The other side are people owning a smaller business but do not want to change because they will retire in five or ten years and they know there will still be on premise work for them to continue until let the business slowly die,” he says.
“But the big chunk of it is actually the reseller that we have today that definitely sees a shift in the cloud but at the same time knows it will take some time. So going from nothing to everything in the cloud, it’s going to take several years as we saw with the switch from the mainframe to the PC.”
Ichter says resellers know this and are looking at how to position themselves as cloud aggregators and linking SaaS and other services to infrastructure for their clients.
“So the value of the reseller is understanding the cloud business and still having the skills in building infrastructure and the services they provide already and making them link together,” he says
He adds that these traditional resellers will have an advantage over newcomers to the market.
“The smaller the business, the more the human relationship is important,” he says. “They need someone they know and trust to guide them and this is definitely the role of the reseller. To guide them, to say in your particular case you should use this or that application in the cloud or on premise or I should provide service through a hosted partner.”
Still, there are those that will be reluctant to face this reality.
“What we will see is some people will disappear because they are simply not able to adapt to the new environment in the cloud and we will see newcomers - people that didn’t already know what infrastructure is or how to implement it but can provide services using existing infrastructure in the cloud,” he says.
One of the most crucial jobs for resellers that evolve to be cloud aggregators is to maintain simplicity for customers.
“Complexity is getting bigger and bigger and the price of the ticket to get in the game to provide services will be getting higher and higher,” he says. “There will be a need to understand IT, for understanding services...but at the end of the day, the way to sell it is as business solutions that are easy to use and consume.”
“The key as I mentioned is make IT look and feel simple to use and have that complexity get out of the day-to-day operations. If you can manage out the complexity this is the value you will bring to your customers.”