Against the backdrop of an ever-changing market, it’s clear that IT resellers, value-added resellers (VARs) and distributors are adapting in order to remain relevant. With the advent of cloud, this is becoming an even bigger issue, with channel businesses changing not only their portfolios, but their business models, sales approaches and company culture too. A recent survey conducted by Censuswide for Pulsant found that an overwhelming 97 per cent of channel businesses had experienced growth in the last 12 months.
47 per cent attributed this growth to incorporating SaaS or cloud into their product offering, and another 47 per cent to working with a cloud services provider (CSP). The reason why an increasing number of channel businesses have added the cloud to their product portfolio is simple — it’s a hugely effective way of opening the door to fresh business opportunities and increased revenue streams.
Despite the myriad of benefits, the channel initially looked at the cloud with trepidation. However, as the statistics above show, the market has had a softening in attitudes, with almost half of the entire sample base citing the cloud as their reason for growth. But the speed of this adoption has been mixed – 43 per cent of respondents told us they have been offering cloud for two to three years, while 34 per cent have been offering it for less than two years.
But exactly what are the opportunities that the cloud holds for channel businesses? After asking this question to our respondents, we found that 46 per cent of them saw the cloud as an opportunity to increase revenue streams. This is perhaps unsurprising, seeing as the cloud allows the channel to adapt and provide its services more quickly to more people, in turn increasing revenue. But this isn’t the only opportunity the channel offers. We also found that 27 per cent of channel businesses want to use the cloud to expand their reach or reach new markets, 23 per cent hope to provide increased agility for customers, and 4 per cent are hoping to use it to save costs.
Despite the varying opportunities, it seemed that almost everyone was aligned on the overall potential of the cloud. A huge 96 per cent of organisations in the survey felt that the cloud is living up to the hype and they’re realising the opportunities on offer. Of course, in order to reap all of these opportunities and benefits, the channel must first face the challenge of adapting to a radically different, cloud-based business model, and this is undoubtedly one of the main reasons that the cloud has not been adopted more widely. Even those that have already adopted are acutely aware of the difficulties, with 20 per cent of respondents saying they found adjusting to a new business model to be the biggest challenge, and one-third citing service delivery.
The partnership model is central to how the channel works. Businesses need to work together with other like-minded organisations in order to deliver better and more complementary offerings, and the same goes when it comes to working together with CSPs – in fact, finding the right partner has become even more important, from a resource, expertise and experience point of view. However, finding the right CSP hasn’t been so easy for everyone, with 12 per cent of respondents pointing it out as their biggest challenge.
The cloud has not only allowed widespread growth within the channel, but it’s also given channel businesses the opportunity to adopt a more flexible and commercially viable model of working. The ultimate goals for the channel are the same as they’ve ever been — to serve their customers while making a profit at the same time – but thanks to the cloud, they’re able to achieve these goals via different avenues. With the potential for more product offerings and more customers, the relationship between the channel and the cloud has only just begun.
Image Credit: Chaiyapop Bhumiwat / Shutterstock
Chris Roberts, channel director, Pulsant