When Google reseller BluePoint started in 1986, the term "cloud" was little known outside of tech and telecoms circles. Now it's on the lips of every business owner.
This year, BluePoint (4th in the CRN Fast50), which saw revenues lift 136 percent to $1.53 million, counts itself among the 10 percent of CRN Fast50 resellers which identified itself as a cloud provider.
Add in hosting (20 percent) and internet provision (20 percent) and half of the responses from top-performing resellers offer such a service. Throw in managed services, which may entail cloud provision, and it's plain to see that the channel has embraced the shift.
But it wasn't an easy sell at the outset, Bluepoint founder Craig McLaughlin says. When BluePoint signed up with Google 10 years ago, cloud was a term yet to gain currency as a computing platform where infrastructure, software and services were delivered on demand and usually over the internet. Not that the industry wasn't familiar with the theme - IBM and Burroughs pioneered it in the 1960s.
The industry has been stabs at providing computing on demand. Software as a service, application service provision, hosting, grid and utility computing aimed to tether IT costs, while lowering risk and providing the illusion of infinite supply (known today as 'elasticity').
There was a lot of uncertainty in BluePoint's early debates caused by the decision to dump Lotus Notes for an upstart search company with pretensions to the enterprise.
"It was a turning point for business," McLaughlin says. "With the old guard it was a shrinking market and a shrinking business and now we're in almost uncontrollable growth."
BluePoint integrates Google's enterprise suite including Google Apps, Gmail, Maps and Postini network security. It also resells the Google search appliance.
Canberra reseller Cool Chilli (No.3) is another longstanding cloud advocate; it sold network computing systems to its first customers in the late ‘80s. It has since led the introduction of a single network to mesh the sites of its sports club customers through the nation's capital.
Although questioning how cloud was different to hosting, founder Andrew Smith, who saw 151 percent lift in annual revenues this past year to $755,228, expects cloud services to expand their influence next year.
"We're certainly entering more into managed services and that has been a smart choice for a lot of IT businesses and a necessity as customers become more aware of them," Smith says.
The decision of these pioneering resellers was validated last month when Microsoft dove deep into the cloud with its Office 365 service. From next year Microsoft's cloud platform will allow Australia's channel to sell the productivity suite to customers on a user a month basis.
Counterintuitively, the CRN Fast50 this year saw annual declines in those resellers in the two most popular categories: 15 percent fewer offering consulting and professional services and a third fewer providing end-to-end solutions. Some of this could be accounted for by a slight rise in those offering disaster recovery and backup (21 percent) and hosting that this year was a reported activity by 20 percent of resellers (six resellers last year).
And while almost all resellers said they have a services practice, about 40 percent of those in the list made the bulk of their revenue from services - about a quarter more than last year. And at the same time, there was a slight rise in those selling hardware over last year's list - perhaps proof that the cloud hasn't (yet) killed off boxes.
The breakdown of those selling software and what percentage it contributed to the business were largely unchanged from last year.
Brisbane reseller Sundata (No.36) saw revenues last year lift 20 percent to $12.5 million on the back of backup and storage, says managing director Kon Kakanis. The business that started in 1986 has long been an IBM shop but Kakanis, who started his career with Big Blue in the ‘80s, keeps vendors such as NetApp on tap as a safety, he says.
He says the nexus between online storage and dissatisfaction with tape backup systems for disaster recovery powered the growth in Sundata's high-availability practice.
Kakanis says replacing tape backup regimes with cloud storage, especially synching SANs from the customer site to a third-party provider, "helps businesses run operationally with shorter weeks".
Sundata surveyed 70 users recently and found most checked their backup tapes only every two years, too long to be certain that the data has survived intact or that it will be there when needed.
"It's a key question we ask people - what sort of outage can you sustain? It changes service by service and application by application.
"People talk about very fancy solutions but there's a lot of basic stuff that isn't being done and that's an opportunity to have a very simple discussion with people to harden their environment.
"Do you test error messages from the backup environment? How many cartridges are in the safe?"
But there were teething problems, he says. "We have one client who is replicating a [storage network] to the cloud. That's the first one we've done so there was a big learning curve for ourselves, the customer and the cloud provider.
He says the global financial crisis caused the business to look long and hard at itself including regularly revising key performance indicators for staff.
"We'd already been doing some business improvement work so we had a mindset of having things ship shape. In '08 we agreed we wouldn't do anything fancy but we would do the basics really well.
"Boring, old-fashioned stuff: maximise the pipeline, understand customer issues, keep debtors in hand, keep suppliers on side and communicate clearly with staff."
He says management regularly reviews accounts and stays out of the cycle of churning quotes.
"Talking to a customer and saying ‘I don't want to talk about quotes' is challenging for salespeople. Ask what keeps them up at night.
"There's usually some way to turn that into a discussion about how technology can help them. If you run to [sales quotas] exclusively you could miss out on some opportunities."
Clicks before bricks
If No.15 reseller Mwave is the poster child of the online revolution, that hasn't stopped the Lidcombe reseller opening a bricks and mortar shop to catch the passing trade and serve as a physical hub for its online customers.
It's a situation that the founders didn't consider when they started the business four years ago, says chief executive officer Victor Lee. It attracts lunchtime shoppers, local businesses and residents and those who want to save on shipping or need products in a hurry.
"Some people come in to pick up goods, some to see who we are and what we do to help them make up their mind and some for convenience," Lee says.
And while the option exists to branch out, the future is solidly online, he says, especially as the National Broadband Network rolls out. In a virtuous circle, he predicts networking will drive sales to his site and result in higher sales of the technologies themselves.
And although he's loathe to pick winners in such fast moving categories, Lee singles out audio-visual devices and tablets such as Apple's iPad as areas in which he wants to extend Mwave's reach. The reseller already provides hands-on to Apple products at its showroom.
And a word for your supplier
It shouldn't be a surprise that the Australian arm of US behemoth Ingram Micro is the top distie in Australia not just by reach (nearly 70 percent of CRN Fast50 listers) but also by importance - half said it was their most important supplier relationship, more than the combined total of No.2 distie, Westcon Group.
But many resellers say they keep disties on tap to access rare or specialist items and to balance the power relationships.
-1.jpg&w=100&c=1&s=0)
.png&w=100&c=1&s=0)
