Distributors have been watching the arrival of cloud computing with a wary eye for some time.
At a CRN roundtable in December 2009 distributors were happy to acknowledge they were making plans to adapt to cloud computing but few showed any signs of doing so.
Fast forward 18 months and the disties are gradually rolling out their strategies. While they differ in the details, all aim to do the same for cloud as they do for hardware and software: aggregation.
Stratus spoke to three prominent disties about their future as cloud aggregators and how it would interact with their current portfolios.
Ingram Micro
Why should resellers use a distributor to buy their cloud services?
“I think it’s a time saving,” Darren Elsby, Ingram Micro’s senior business manager for managed services, says. “It’s going to require customer engagement, skills on the ground, fulfilling business needs. One of the roles Ingram Micro can play is saving them research and take some of the risk out of the business.”
Australia’s biggest distributor is taking its lead from head office in the US which has already forged ahead with a multi-pronged strategy on cloud.
Ingrammicrocloud.com is the distie’s platform to deploying cloud-based solutions and was recently launched in the US. It contains white papers and educational materials on cloud basics and the types of solutions available through Ingram.
The site also has a marketplace that Elsby describes as “a structured area that defines the vendors and some information about the cloud-based services they’re offering”.
“The reality is there is a lot of noise in the market and it’s quite confusing for the channel,” Elsby says.
“We definitely will be looking to do a similar thing in our market but we need to make sure all those things are localised and as relevant as possible for clients in Australia,” Elsby says.
If resellers are the trusted advisers to customers, Ingram is positioning itself as the trusted adviser to resellers by assessing the technology, processes and financial robustness of cloud vendors before offering them to its reseller customers.
Elsby points out Ingram already offers cloud computing services from quite a few vendors and has signed contracts and brokered service level agreements (SLAs) for resellers in a bid to take the risk out of cloud services.
“There are good cloud operators and not-so-good operators. You need to make sure those services are going to be there tomorrow and that they are in a secure and well-managed data centre. You wouldn’t want to be pitching to one of your most important customers a cloud solution that is hosted in a shed somewhere.”
Elsby won’t disclose all the checks Ingram makes on prospective cloud vendors, although they do include scrutiny of business processes and the company’s viability. The checks include security, hosting location and redundancy, including physical site visits, appropriate insurance and the details of SLAs.
“The reality is we’re checking business redundancy. Is life going to go on if there’s an issue? How will an issue be resolved? We work through agreements with providers to make sure those things are in place. We need to make sure those solutions are well-considered, they’re checked, they’re redundant and they follow good business process.”
Elsby says resellers will deal with Ingram rather than directly with its cloud vendors because it has more vendor partnerships than anyone else and it will partner with the right vendors to have the right solution. “We want to be the leader in aggregating cloud services.”
Express Data
Some distributors have felt under siege by comments that cloud will make distribution irrelevant.
“Working at a distie I sometimes feel I’ve got a target on my back because of cloud,” says David Peach, general manager of vendors at Express Data. “It’s quite the opposite. The role of distribution has generally been as an aggregator.”
He points to the transition from boxed software to software licences as one that raised similar concerns about the future of distribution. “We’re not scared of cloud; we’ve seen it happen before where there was transition and disruptive technology.
“The reality is there is going to be a role for the channel. Express Data sees the need our vendors have for our partners and that’s very real today as it was five, 10, 15 years ago.”
ED claims to have been “in the cloud” for at least three years through selling Microsoft hosted services to a core group of managed service providers (licences sold under the acronym SPLA).
This has expanded to reselling cloud services from six other vendors: Citrix, M86, IBM LotusLive, CA, Symantec and Blue Coat.
“All those vendors have the desire to sell some or all their solutions via the channel. Express Data has found a good role for itself not just in logistics but in the training and enablement on behalf of our partners.”
Peach says many resellers haven’t worked out what role they will play in a cloud IT world. Like Ingram, ED hopes to help partners transition parts of their business to the new way of selling IT services. For example, the distie is providing advice on how to manage compensation plans so salespeople will be properly remunerated for selling the right solution to the customer.
Peach points to a Microsoft initiative called Licence Mobility which will let customers move on-premise software licences to cloud products. “It is a deal-by-deal, customer-by-customer scenario,” he adds.
ED has also ramped up end-user lead generation for partners through e-marketing, events and phone campaigns.
The distributor is launching in July a national “cloud enablement training program” called Cloud11.
The six-month program will help partners choose one of three roles. Cloud resellers will resell cloud services and make money through commissions. Cloud builders will construct private clouds for larger companies.
And cloud providers, the fastest growing segment, will sell their own hosted services targeted at vertical markets such as health or applications such as video.
“We don’t think it’s a case where partners can do an equally good job in each role. They need to work out what works for them,” Peach says.
Peach estimates a third of ED’s cloud services partners are new entrants who haven’t had much of a profile within the channel.
Cloud providers should abandon hopes of providing hosted email “unless they have a plan to sell 20 million email boxes”. Instead they should come up with a solution that works in a particular scenario that can be sold over and over again. “You’re only going to build that by specialisation,” Peach says.
Distribution Central
“Cloud providers are like manufacturers; they build great technology but they don’t necessarily know how to deliver it through a channel,” says Scott Frew, CEO of Distribution Central.
Distribution Central has been working for more than six months on a “cloud configurator” called Stormfront. The browser-based application will give cloud service providers an interface to distribute their products to resellers to on-sell.
Cloud providers’ services typically lack part numbers and descriptions that resellers and customers can process because they don’t require them in their own sales processes. “Cloud providers usually work with contracts. You can automate a contract but not a proposal,” Frew says. Distribution Central plans to fill the traditional role as matchmaker between these new vendors and the reseller community.
Even in a world where customers don’t own servers, resellers are still required to look after the PCs, software, communications gear and so on, Frew says. “And if you’re a true trusted adviser, you should be helping them choose which clouds to use. Resellers need to have a footprint across all that and take commission from all the service providers.
“I’m trying to take the pain out of how I configure a part of the cloud for that particular customer.”
Frew says the company faced enormous challenges in building the application and hopes it will go live for resellers sometime this year. Stormfront has been in beta for six months with Interactive, a service provider offering SQL, disaster recovery and email.
Frew is talking to half a dozen other service providers but won’t sign on more until Stormfront has gone live with Interactive.
The distie has a second configurator for building the back ends of clouds. FlexPod is NetApp’s answer to vBlock, EMC’s joint product with Cisco and VMware (NetApp shares these partners for the FlexPod). Distribution Central has built a FlexPod configurator that can calculate “160 line items in two seconds” for resellers wanting to sell the multi-tenanted, cloud-delivery solution.
The FlexPod configurator has been tested and used in Distribution Central’s Singapore office and will be rolled out in Australia soon. The distie is building a “FlexPod factory” in Australia that will deliver configured FlexPods direct to resellers or customers.
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