Business Cloud News
Cloud is prompting channel providers to invest more in being service integrators. But service providers see distributors largely as providers of tech support for cloud services

Cloud is prompting channel providers to invest more in being service integrators. But service providers see distributors largely as providers of tech support for cloud services

The impact of cloud computing is being felt in particular by “middlemen” in the IT product and service channel. According to recently published research by IT trade body CompTIA, the transition to cloud poses serious financial and technological challenges for IT distributors and resellers, with all evidence pointing to these distributors moving up the stack in response.

Cloud computing is disruptive, not just because it presents such a strong deviation from how IT services are traditionally procured and consumed, but also because of its impact on the service providers catering to enterprises.

“Unlike traditional IT products with clearly defined architectures and feature sets, cloud computing technology is by design more virtual and decentralized in nature,” said Carolyn April, director of industry analysis at CompTIA. “From a distributor’s point of view, this makes the technology more difficult to move through a supply chain – to ‘pick, pack and ship.’

“As if these transactions weren’t challenging enough, distributors must also contend with the ongoing disintegration of traditional product categories, which adds a layer of uncertainty to technology development,” she said.

When it comes to cloud the channel tends to split into three broad segments. There are cloud builders, where resellers use a core or white-label platform to provide their own flavours of the service; cloud providers, where resellers can actually build their own platforms and offer the services themselves, like the hosted Microsoft Exchange or Office 365 model; and cloud resellers, which tend to repackage other cloud offerings and skim a margin off the top (the classic model).

The research points to a necessary emergence of the service broker, channel distributors that essentially take on a stronger systems integration role than simply packaging and reselling software and hardware.

Most IT strategies are still multivendor, more so with the growth of cloud and service disintegration, and traditional channel distributors are indeed building cloud integration capabilities and partnering with cloud service providers in order to make a successful go of it according to CompTIA.

“For the past 20 years, no one type of company has done that better than the industry’s wholesale distributors,” April said.

”If they play their cards right, they could position themselves as the nexus of cloud computing,” she added.

However, CompTIA’s research also suggests that IT service providers are looking primarily towards the channel to provide value-added services in the way of technical support for cloud solutions and consulting service, with aggregation and integration being secondary.

@BizCloud
News