The line between traditional distributor sales and sales of cloud or as-a-service is incredibly blurred. Really, there’s little difference – almost everything can be done online now, so the barriers between the old and new worlds are eroding at a rapid pace. Distributors have spent recent years developing cloud marketplaces to help partner transact products digitally.
While they remain standalone systems for now, the day will soon come when we stop calling them ‘cloud portals’ and this simply becomes the standard way of dealing with distributors.
Services and hardware
Few resellers are 100 percent software or services, and most distributors are the same, with the exception of Rhipe. That means the channel requires systems that can deal with both cloud-style consumption services as well as traditional product sales.
Distributors have understood this need, and most offer a way to order everything in one place without having to jump between multiple systems from the one distributor. Nextgen Connect has taken a different approach as an entity with a specific focus on the Oracle cloud ecosystem, which is separate from parent Nextgen Group.
Dicker Data stresses that its CloudPortal platform is not standalone. “It’s fully integrated into the Dicker Data website,” says Ben Johnson, general manager, marketing and strategy.
“It’s a seamless experience for partners regardless of the technologies they require.” Partners use the same platform to track warranties; support contracts; and purchase hardware, software, or cloud all on a single invoice.
Synnex was also keen to emphasise its integrated approach. “Our portal provides a single place to manage both cloud services and hardware,” says Michael Tea, general manager of e-commerce and cloud services. The Synnex portal also highlights renewals, including alerts 30, 60, or 90 days in advance. “The reseller gets a pipeline alert that they can pass over to their sales team, and the sales team then has an opportunity to reconnect with the customer,” Tea says.
In a world where ongoing subscriptions create a temptation to just sit back and keep billing, a reminder helps ensure that a reseller keeps talking to their customers and looking for additional areas to help, as well as upsell and cross-sell opportunities. This drives revenue for both the reseller and the distributor.
Own or rent?
Several of the distributors we spoke to were keen on highlighting that they owned the intellectual property on which their cloud platform is built. Synnex, Dicker Data and Ingram Micro have all invested heavily in platforms that they own and control, and are convinced that this is an ace up their sleeve.
“We looked at the market offerings for cloud portals and decided that none of them suited us,” says Tea. Synnex decided that building a portal from scratch was its best option. Other distributors – namely Ingram Micro and Westcon-Comstor – started building a platform based around a third party vendor, then decided it had so much value to them that they should just buy the whole thing.
Ownership of the platform implies an ability to control your own destiny, but running the platform yourself comes at a cost. Development and maintenance of the cloud platform itself falls to the distributor, which is also selling services to resellers. In a kind of irony, rather than renting a service from a cloud vendor and reselling it with some customisations, these distributors have chosen to take on the dual role of distributor and software developer.
“In the cloud space, I don’t really call us a distributor,” says Lee Welch, general manager at Ingram Micro. “I call us a services aggregator and I call us a software company.
“What we do is very different to our traditional distribution business. I don’t like my team using the term ‘distributor’. We’re a services aggregator.”
Boring billing
While it’s not as exciting as some of the technologies bought and sold through the portals, the way distributor cloud portals handle money is a core part of their value to resellers. Customers like to buy in multiple ways, and different vendors like to take money in different ways. Matching these differences and all of their weird and wonderful combinations takes a strong billing engine.
Dicker Data, Ingram Micro and Synnex were all keen to explain that they have spent time designing their credit terms and payment methods to make it easy for resellers to transact with them. “Customers can pay for cloud services with the same credit terms they’ve already established with us,” says Ingram Micro’s Welch. “We can reconcile even complex billing with our own custom-built Cloud General Ledger.”
Ingram Micro is happy to take payment on credit terms, by credit card, or even do payment collection on a reseller’s behalf. Credit terms can be a little trickier, and while having a single, consolidated line of credit might make sense, Ingram Micro deliberately splits hardware from cloud services terms.
“We don’t want a single large hardware order to hit the credit limit for a customer and have that trigger issues with the cloud services,” Welch said. Keeping credit terms aligned with the nature of the underlying business makes sense, and it illustrates that understanding how to build a portal to support the reseller business is about much more than a simple e-Commerce site with a list of SKUs.
Ecosystem integration
Ingram Micro stands out in one important way that we expect other distributors will copy (if they have not already done so). Ingram offers service desk software through its portal, as do many other portals, but Ingram encourages its resellers to use the service desk feature as part of their own business. It is offered as a service, complete with a staffed national phone number they can use as if it were their own service desk.
“It’s about plugging into their business,” says Welch. “We also have a dedicated person to work with local ISVs to join us as a vendor locally, and to help them go offshore.”
By more tightly integrating with their resellers, a distributor is less likely to suffer from churn as resellers join and leave their network. This keeps costs low, while also making revenue more predicable. It also encourages an ecosystem of mutually supporting vendors, much like the models of certain data centre providers that stress the networks and marketplaces available if you join them.
Avnet wants to be “the service provider for service providers,” says cloud and platform manager Greg Small. “We aim to be a one-stop shop for our partners, supporting multi-cloud, multi-vendor, multi-tenancy, multi‑currency and multi-tax.”
A cloud portal that is tightly integrated into a reseller’s financial systems creates significant switching costs, should a reseller ever want to change distributors. Smart distributors will also know that they have access to excellent market information on what is selling well, which resellers are succeeding, and how. They can use this information to help their entire network improve, and increase profits for everyone.
Much as data centre providers tend to stress their networks and interconnections as a reason for choosing them, we expect distributors to start making more noise about this aspect of their platforms relatively soon. The collection of vendors – as well as other resellers – in that network will no doubt become a point of difference that distributors can use to carve out a position for themselves in the marketplace.
In a world of commodity services, finding ways to be different becomes harder than ever, and distributors will need every bit of help they can find.
Next: Differences
Differences
It seems that the largest differences between distie cloud portals are similar to the distributors themselves: what they are generally like to work with as a reseller, and the specific products and services available through the system.
The larger vendors – such as Amazon Web Services, Microsoft, Citrix, Hewlett Packard Enterprise, IBM Softlayer and Symantec – are widely available from multiple distributors. All the systems provide hosting and networking infrastructure. VMware is well represented for private hosting, and the big public clouds of AWS and Azure are easy enough to come by, with Avnet adding Google to its offerings shortly.
Distributors tend to offer only one or two data protection or security vendors, and a smattering of other, higher-level services depending on their market focus.
The big standout is Nextgen Connect. It has chosen to focus solely on the Oracle cloud ecosystem; there’s no buying other public cloud options here.
Different cloud portals, while offering similar services in broad terms, will no doubt diverge as they come to serve different sets of customers; both their resellers and the vendors that plug into their ecosystem. Nextgen Connect has chosen to jump into this approach from the beginning.
We expect to see some of these ecosystems flourish, and others to wither and die. While it’s not possible to know which this early on in the game, the distributors that listen to the needs of their channel will have the edge. Tom Ward, director at Vigilant IT, says he really likes the way Dicker Data’s team “listen and work collaboratively with us to deliver on what our business needs.” It’s this responsiveness to what resellers want that will ultimately determine if an ecosystem will succeed or fail.
It’s still early days for cloud portals, and it’s not completely clear how a reseller can make best use of them. For some, a multi-distributor approach may make sense, particularly if your customers need vendor offerings that aren’t available in a given distie’s platform. For others, getting really cosy with a single distie and encouraging them to build the features you need could provide a lot of benefits in becoming part of a robust and well integrated ecosystem. The cost advantages of a one-stop shop might outweigh the variety available by shopping around.
The breadth of the offering from the bigger players will need to be countered by the smaller players paying close attention to the needs of their reseller partners and growing a robust ecosystem. This is a fast-moving space, so resellers interested in expanding their offerings would be wise to talk to distributors about what they have coming up – not just what’s available today.
CLOUD PORTALS IN FOCUS
Arrow ECS
Arrow ECS launched its DC CloudSelect platform in May 2015 (back when it was local distie Distribution Central).
Key vendors include AWS, IBM Softlayer, Sophos, F5, Adobe and Xero.
The CloudSelect platform appears to be aimed at the mid-market, and would suit resellers familiar with Arrow’s approach to distribution who want to add cloud services to their offerings.
Avnet
Avnet was the first to launch its cloud portal in Australia back in 2012. Its portal is based on the Orbitera platform that was acquired by Google in August 2016.
Avnet provides a large array of services in its cloud marketplace, including AWS and Azure, IBM Bluemix and Softlayer services, and Oracle cloud. Avnet’s commercial relationship with Microsoft complicates the way it provides Office 365, which needs to be purchased as part of a larger bundle. Given Orbitera’s new owners, we can expect Google cloud offerings to be added to the Avnet platform quite soon.
Avnet’s broad offerings, plus its enterprise and data centre acumen, will appeal to resellers from the mid-market upwards, though many SMBs will also find something to like here.
Dicker Data
Dicker Data’s CloudPortal launched in August 2015 and was developed entirely in-house.
Key vendors available through the platform include Microsoft, Citrix, Symantec, Veritas, HPE, and StorageCraft.
Dicker Data’s focus is on the SMB to mid-market, and would suit resellers with a strong SMB background who are looking for a distributor that wants to work closely with them at that end of the market.
Ingram Micro
Ingram Micro’s Cloud Marketplace is based on the Odin services automation platform it acquired from Parallels in December 2015.
Major vendors available in the Cloud Marketplace include Acronis, IBM Softlayer, Microsoft, Adobe, BitTitan, and Symantec.
Ingram Micro is aimed across the full spectrum, from SMB to mid- to high-end markets, and their offerings are broad enough to cater for just about anybody.
Nextgen
Nextgen Connect is a subsidiary of Nextgen Group set up specifically to focus on cloud. Its portal, Nextgen Connect, is based on software by Austrian company Infonova, with in-house IP layered on top. Its launch in March 2017 makes it quite a recent entrant.
The portal focuses exclusively on Oracle and is aimed firmly at high-end enterprise and government services. Nextgen Connect is part of the whole-of-government finance panel (part of the Digital Transformation Agency) and Nextgen positions this as a way for smaller partners to gain easier access to government customers, via its Nextgen Connect Accelerate program.
Rhipe
Rhipe was best known for being a cloud licensing outfit before launching its own cloud portal in 2015, based on joining the Microsoft Cloud Service Provider program.
It maintains a software focus to its offerings, with major vendors including Acronis, Citrix, Datacore, IBM Softlayer, Veeam and VMware.
Rhipe would suit resellers with a software focus, particularly those looking to help customers move from on-site deployments of software to something similar in the cloud.
Synnex
Synnex looked at the market for cloud portals and decided that none of them suited it, so it built its own, which launched in Australia in 2016.
Synnex hosts vendors such as Microsoft, IBM Softlayer, Acronis, Barracuda, Nomadesk, and MYOB. Synnex added Microsoft’s Cloud Service Provider suite of products in the middle of 2016.
Synnex is focussed more on the mid-market and SMBs with its offerings, and as a major Microsoft distributor, would suit resellers with a strong Microsoft focus.
Westcon-Comstor
Westcon-Comstor’s Cloud Solutions platform, called BlueSky, is based on the Verecloud platform it acquired in 2014, after spending 18 months working with the vendor to develop its Cloud Solutions Distribution Platform. It launched in July 2015.
Major vendors available through the platform include AWS, Cisco, Symantec, VMware, Chef, NGINX, Barracuda, and Cloudian.
Westcon is a broad provider that offers both software and hardware from a variety of vendors, and is geared more toward the mid- to high-end of the market.
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