Reseller News Distributor Roundtable - Can the channel make serious cash from the Cloud?

Reseller News Distributor Roundtable - Can the channel make serious cash from the Cloud?

The inaugural Reseller News Distributor Roundtable debates whether the channel, in an apparent new age of IT, can make serious cash from the Cloud.

“In fact, you were screwed five years ago,” adds Nick Verykios, Managing Director, Distribution Central, who in weighing in on the debate, believes the onus to a degree is also on the distributor to ensure resellers are profitable within the channel.

“The reality is and our perspective at Distribution Central is that as distributors we will always have two areas to perform in,” he observes.

“We will provide technology and options to increase revenue and also we will provide transactional options which will help reduce cost.

“That’s pretty much our role as a distributor and I believe everything falls under those brackets. If the distributor isn’t doing this then they are not going to survive. The last 25 years of the industry proves that correct.”

IT Spend?

As far back as 15 years ago technology spending outside of IT was 20 percent of total technology spending; it will become almost 90 percent by the end of this decade, according to Gartner.

For Verykios, when searching for avenues of revenue streams, the conversation should be focused around the rise in IT spend and budgets, who’s in the control of buying and crucially, how this will impact the channel.

“In my opinion the best part of the whole equation,” he adds, “and the point that nobody is talking about is that IT budgets are increasing and they are increasing because customer problems are being solved more and more through IT, yet everyone ignores this element.”

According to Stitt, in full agreement with Verykios, “more and more IT spend is now being decided by the business as we are seeing more business problems than in years gone by.”

As reported by Gartner, when it comes the rise of Cloud, social, mobile and information, there is serious work that needs to be done across organisations.

In 2015 and beyond IT leaders need to make sure they have policies and procedures in place to respond to the new Nexus-driven threats.

They must counter cyberattacks, and anticipate new attacks from new sources at a high scale. They will need to respond to “reputation” warfare and defend against social media “mercenaries”. They will also invest in new technologies that support employee-owned devices such as mobile device management, containerisation and virtualisation.

The list goes on.

But as Michael Lamont, Account Manager, Open Systems Specialists acknowledges, the marketing team is also having much more of an influence on where spend goes.

“The marketing team is much more of an influence on the where the spend is now and that is what we are seeing,” he explains.

Speaking from experience, Lamont says when marketers want to take a product to market, suddenly they are main the drivers and they are the divisions pushing the CIO and the IT team to deliver.

“At OneNet we’ve also found that the marketing team go off with the credit card, subscribe to Salesforce or Microsoft CRM and set up their own CRM system because they are fed up with waiting for the IT department to get around to it,” adds Steve Victor, National Sales Manager, OneNet.

“Today IT departments have other things to address which means marketers just go off and do those things and it could be happen in other departments also.

“At OneNet we sell Microsoft CRM in country and receive many inquiries from resellers, or direct, with customers subscribing to the services themselves with their own credit card.”

Victor’s observation of IT spend in business and how it is impacting the channel begged the key question of whether the role of the traditional IT buyer has now changed?

“It hasn’t completely changed but there are now more decision makers than just IT managers,” he claims.

In taking a consultative approach based around understanding customer needs and providing the appropriate infrastructure on a cloud platform which is consumed as a service, Deidre Steyn, General Manager A/NZ, ICONZ-Webvisions admits that in selling cloud and cloud only, educating the market can be difficult.

“We’ve spent the time and it is difficult,” she admits. “We’ve found that the sell is not to the IT departments and that you have to start high first.

“It’s imperative to get the business owner or the department end buying cloud and referring down. And that’s where a hybrid cloud approach actually starts the conversation, teaming up with the IT department instead of taking control away from them, we’ve seen that shift happen.”

Where is the cash coming from?

For Parker, the buying patterns of organisations and IT departments revolve around a natural cycle but for Verykios, when asked directly on the monetary value of resellers selling the Cloud, he believes partners should consider the technology as an enabler.

“To be clear, new sales wouldn’t have happened without the Cloud,” he explains. “The enablement of traditional technologies is absolutely huge without that 2 per cent of Cloud - that’s what we are seeing.”

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