And how can the channel maximise the opportunities?
 
What is the current cloud landscape?
The transition to the cloud is continuing to pick up steam across all markets in 2017, and this will only increase in 2018 and beyond.

Steve Robinson.jpg
Steve Robinson, VP, Sales - Global Cloud Solutions Selling Executive, Arrow

Agility, innovation and speed continue to be the main motivators for cloud growth. And cloud will become increasingly important as the enterprise moves away from being device-centric and toward cloud-oriented solutions. This shift will only be more pronounced in the future, as businesses seek greater mobility - and the Internet of Things (IoT) brings more devices into the digital landscape.
 
However, the largest area of growth is hybrid cloud. And it’s no surprise, hybrid cloud utilises the best of both public and private clouds and presents a unique third option; a combination that allows organisations to build a custom solution that best fits business needs. In the future, recognising the need to adopt cloud technologies alongside legacy infrastructure as a means of working smarter will be crucial boosting productivity, profit and innovation.
 
There’s also been an increase in cloud platform and Software-as-a-Service (SaaS) vendors opening data centres; and with the adoption of SaaS-based enterprise applications, there also comes an increase in IT operations management tools that are delivered from the cloud. These cloud-based tools allow organisations to more rapidly add functionality and adopt newer technologies to help them manage faster application release cycles. Infrastructure as a Service (IaaS) also continues to be a strong segment as enterprises move away from data centres and move their infrastructure operations to the cloud.
 
Analyst projections for the growing prevalence of public cloud in enterprises' IT infrastructure illustrate the vastness of the market opportunity.
 
Currently, little more than one in 20 workloads reside in the public cloud - but studies have predicted that this could grow to as much as 50 per cent over the next few years1. We’re also seeing that cloud growth is now faster than overall IT growth among our channel ecosystem. For instance:
  • 57 per cent of enterprises consider cloud a critical priority in the next 12 months2
  • 30 per cent of the 100 largest software vendors are shifting to cloud3
  • 31 per cent of companies plan to source more than half of IT capability to cloud4
  • 60 per cent plan to source cloud services through value-added business partners4
  • 70 per cent anticipate the need for cloud consulting, training and implementation4
Because organisations are making the shift to the cloud, Value Added Resellers (VARs) are following suit and shifting their sales models. Managed services are an attractive replacement to the challenge of commoditising products as a profit maker. Additionally, adopting a managed service model solves the limitation in capacity and productivity of the break/fix model under which VARs typically operate.
 
It seems cloud is finally finding its place in both the enterprise and the channel, this may seem like an antiquated statement - but cloud adoption has been sporadic in IT strategies since its modern inception in 2006. What’s changing in 2017 is that the business benefits of cloud are much better understood and quickly outweighing the perceived risks to the company. As with most new technologies, cloud just needed time - and a variety of options to suit everyone.
 
However, getting into the cloud game can still be costly and complicated for VARs. With that in mind, we explore how any size and type of organisation can adopt the cloud. Whether organisations are in the process of transitioning to the cloud, born in the cloud – or haven’t even started their cloud journey, there are various ways they can transition to the cloud, accelerate their adoption and optimise their current offering.
 
Transition: how traditional VARs can rationalise moving to the cloud, transform their business model and prepare for a seamless transition to a modern cloud services practice
 
1.    Analyse your long-term business needs – cloud computing vendors aren’t “one size fits all.” Consider your organisation’s present and future needs and match them to a cloud vendor that has a choice of technology.
 
2.    Address any potential security threats at the start - from targeted industrial espionage and DoS attacks to ransomware, viruses, spam and phishing threats, any cloud solutions implemented need to keep businesses secure. Backup and recovery plans should also be put in place to address what applications and data must be backed up and how they will be recovered.
 
3.    Instil productivity and collaboration among employees, vendors, customers and partners – these are key factors in determining business success and can be achieved through both tools - such as cloud-based messaging – and a communications strategy.
 
Accelerate: how VARs can put migration into practice and, once established as a cloud solutions provider, grow the business
 
4.    Consider a financing programme – a cloud deployment is a very significant investment for a VAR, but a financing programme can help make the transition from reseller to cloud provider far easier financially. When a VAR goes into the cloud, there are typically 18 to 24 months of negative cash-flow, but setting up finance can create a foundation to make further cloud investments.

5.    Understand your APIs – a VAR’s cloud offering may be defined by what application programming interface (API) is accessible. It’s important to take the time to familiarise yourself with your APIs and acknowledge that they may change over the life of your cloud.
 
6.    Choose your portal carefully – the portal may be what defines your cloud platform; keep in mind that a portal from a single vendor may reduce confusion and increase issue resolution.
 
Optimise: how VARs can continually evaluate and improve their cloud offering by add new services

7.    Embrace the Internet of ThingsIoT will continue to grow with the unstoppable rise of the cloud. Companies are increasingly offering IoT services and functions in addition to their products to generate new revenue streams, this will further drive cloud applications and usage - as more and more business processes take place online.

8.    Utilise hybrid cloud - hybrid cloud has come to the forefront; and, it’s no surprise, a hybrid cloud utilises the best of both public and private clouds and presents a unique third option. Through hybrid cloud, digital transformation becomes faster, easier and less expensive. However, it is a difficult and complex system with many moving parts that all need to be managed well. 
 
9.    Partner to share the load and expertise – Value Added Distributors (VADs) offer a number of training and marketing programmes, as well as ongoing technological support. While lead generation campaigns may form part of their marketing strategy, market intelligence, PR, social media and content creation are all part of the bigger picture to ensure VARs are fully equipped to find and win new cloud sales opportunities.
 
Cloud transition, acceleration and optimisation can seem a daunting prospect as the services on offer are constantly changing. However, continually adapting to the needs of businesses making the journey to the cloud, presents exciting opportunities and greater profitability. Cloud value added distribution is the key to enabling VARs to build a solution-based practice that meets their cloud services goals, by providing the support and expertise they need for every step of the journey.
 
 
References:
1 Cisco Global Cloud Index: Forecast and Methodology, 2015–2020
2 Forrester: Understanding the Cloud Services Landscape, December 2016
3 Forecast Analysis: Public Cloud Services, Worldwide, 4Q16 Update
4 IDC CloudTrack Survey, September 2013