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Cloud to give channel a shake-up: IDC

Cloud to give channel a shake-up: IDC

IDC says the cloud will have immediate impacts on the channel partner business model, bringing opportunities in public cloud resale, a requirement to build new skills and longer-term returns on partner investment. The analyst firm says reselling public cloud services will require a “fundamental transformation” in partners’ business model because ongoing customer relationships are needed with customers to drive monthly subscription renewals for such services. It says this is a “drastic change” from the transactional approach adopted among value-added resellers currently. Among the skills partners will need to develop to assist customer implementing cloud technology services are strategy consulting, application architectures and migration tools and services. Such a delivery services capability is larger than that required under a simple resale model, it says. IDC says partners will have to invest strategically in the cloud, because annuity revenue will push partners’ return on investment out to two or three years, rather than six to twelve months for traditional ICT products.

"We believe that the cloud will accelerate a trend that has been emerging in the market for some time: channels have to move away from just 'clipping a ticket' as they resell a product or service and getting a referral fee as a result. “Channel partners who just view cloud services as another SKU to resell will struggle. They will have to recognise that the cloud provides an opportunity to bring more to the table," says Philip Carter, IDC’s research director for the IT services, application software, channels, green IT and sustainability practice group. According to IDC's Asia/Pacific 2009 IT Services survey across 10 countries in the Asia/Pacific region, 75 percent of the 1135 IT executives interviewed indicated they had a relationship with a local vendor, and satisfaction levels compared favourably against managed services and cloud vendors and telecommunications providers. By 2013, IDC expects public cloud services spending to make up 10 percent of total Asia Pacific ICT spend. Until then, the compound annual growth rate for cloud spending is expected to be four times greater than on-premise and traditional IT in the region. "The financial benefits inherent to the 'everything-as-a-service' model is driving a shift in buying behavior as capital constrained CIOs look at different options in terms of getting access to ICT resources without having to pay for them upfront,” says cloud technologies and services practice group research director Chris Morris. Across both vendor and channel ecosystems, key aspects of existing commercial agreements will change as the market develops, says IDC. It says companies that are able to adapt quickly and work out a flexible working arrangement based on mutual trust will most likely exploit the emerging opportunities from this market transition.


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