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​Creating cloud clarity in the Australian channel

​Creating cloud clarity in the Australian channel

In the world of cloud, the next steps to partner progression remain unknown, creating a greater need for clarity in the channel.

(L-R) Anthony Carilla (Avnet), Chris Farrow (Avnet), Aaron Steppat (VMware), Richard Yousseff (Blue Central), Nathan Lowe (ASI Solutions), Dane Meah (InfoTrust), James Henderson (ARN), Alex Kennedy (Datacom), Hafizah Osman (ARN), Allan King (Infront), Janet Docherty (Veritas), John Kaleski (IBM), Jamie Warner (eNerds)

(L-R) Anthony Carilla (Avnet), Chris Farrow (Avnet), Aaron Steppat (VMware), Richard Yousseff (Blue Central), Nathan Lowe (ASI Solutions), Dane Meah (InfoTrust), James Henderson (ARN), Alex Kennedy (Datacom), Hafizah Osman (ARN), Allan King (Infront), Janet Docherty (Veritas), John Kaleski (IBM), Jamie Warner (eNerds)

While market literature is crammed with rapid adoption facts and figures, the next step in cloud computing still requires definition.

As large end-user organisations take to the skies in a big way, the tipping point is upon the industry, with cloud adoption now past the perception of something that “only start-ups do.”

But in chasing the cloud silver lining, partners must create clarity for customers as the market becomes more sophisticated, creating specific strategies built around specific business requirements.

“It’s a case by case conversation,” Infront managing director, Allan King, said. “Lots of businesses have different adoption and maturity rates.

“But overwhelmingly I’m surprised by the lack of knowledge around cloud, even from the CIO through to the technologists and how best to move forward.

“On the whole I think most organisations are excited by cloud, but they just don’t know why they are excited.”

In Australia, it’s a sentiment shared across the channel, with partners preempting spikes in cloud growth across all aspects of the industry.

“We’re seeing certain areas of the market that are quite mature with explosive growth, but when you drill down into other parts cloud is still just a concept,” Datacom national cloud manager, Alex Kennedy, added.

“Business still don't really understand what they want or how to get there in cloud and that's part of the navigation process for a partner.”

While enthusiasm remains strong - and continues to show signs of increasing - the appetite for migrating entire business workloads to the skies is waning, emphasising the prominence of adopting a hybrid strategy, tapping into the benefits of both on-premise and cloud technologies.

“Businesses initially went all in with cloud then realised that it doesn’t work for everything,” Blue Central account director, Richard Youssef, said.

Chris Farrow (Avnet), Eduardo Silva (ARN), Richard Yousseff (Blue Central)
Chris Farrow (Avnet), Eduardo Silva (ARN), Richard Yousseff (Blue Central)

“Now they are working out how to pull back and what’s going to be fit for purpose and where the true value is.”

Crucially for the channel however, and in illustrating the network of opportunity emerging within a cloud context, the conversation is advancing between both partners and end-users around how best to extract value to drive business innovation.

“There’s not one flavour or one colour of cloud,” Avnet Technology Solutions chief technology officer, Chris Farrow, observed.

“Initially the conversations were around credit cards, the internet and an online account but it’s clearly going to be a lot more complicated than that. Over the next few years the market will continue to accelerate further.”

End-user expectations

“Customers don’t care what colour it is, they want to know how they can innovate on a particular platform,” IBM cloud lead of Australia and New Zealand, John Kaleski, said.

“That’s the topic that’s lighting up customer conversations and whether that be at senior, mid or junior level, they all want to know what they can do with cloud.

“In truth, cloud may not save a business too much money, in fact there’s an argument that it could be more expensive, but crucially, businesses care about what they can do with it.

“How can they enable cloud? How can they innovate? That’s the next step for the industry to address in the years ahead.”

Echoing Kaleski’s comments, ASI Solutions managing director, Nathan Lowe, believes the opportunity for partners is around tapping into such a thirst for innovation within the Australian enterprise.

“Customers want to innovate,” he added. “They want to have that chance and they don’t want to worry about the lights or the hardware or the low level stuff. We provide that service as the managed service provider.”

With innovation at the heart of the conversation, cloud discussions continue to evolve from the preliminary chatter of two or three years previous, highlighting a market that is slowly coming to grips with how best to interpret, and utilise, this emerging technology.

Dane Meah (InfoTrust) and John Kaleski (IBM)
Dane Meah (InfoTrust) and John Kaleski (IBM)

“The perception that cloud services just work and that businesses can plug into a software-as-a-service platform and the problems dissolve is changing,” InfoTrust CEO, Dane Meah, said.

“IT departments are no longer about managing infrastructure anymore, they're about delivering business outcomes. And that's really what cloud enables you to do.”

For Meah, IT department are now becoming the end-user of the platform, removing the worries around stability and reliability.

“That becomes the vendor’s problem,” he explained.

Of the early frontrunners in the market - those besotted by cloud and keen to innovate immediately - the appetite for change essentially came from a deeper understanding of the industry, and what needed to be achieved to enable success.

“For the partners who have taken a while to get up to speed, now’s the time to work with customers to deliver business outcomes,” Lowe added. “That’s the key message, address business outcomes as opposed to IT whether that be across public, private or hybrid.”

With the conversation now moving beyond the IT manager and into different lines of business, the onus is on partners to profile new cloud customers, engaging with the market in a deeper and more measured capacity.

“Three years ago I spent 12 months talking to customers to understand their challenges around cloud,” King added. “Business expectations are driving greater pressure on IT, but traditional systems aren’t able to respond.

“No enterprise is born in the cloud so naturally it’s defaulted into a two-speed IT model which supports legacy but also responds to the business.”

As the need to service both sides of the business heightens, cloud is moving away from its place as the industry’s most overused and cliched term, into another part of the technology equation.

“We’re seeing the dynamics of the market change,” VMware senior product marketing manager, Aaron Steppat, added. Today, most businesses see cloud as just pure technology.

“To facilitate the rise in forecast to come within the infrastructure-as-a-service space, there needs to be technologies which make it seamless to be able to transition between on premise and cloud. There needs to be interoperability between different environments because vendor or data centre lock in is too much of a risk for businesses.”

Hafizah Osman (ARN) and Alex Kennedy (Datacom)
Hafizah Osman (ARN) and Alex Kennedy (Datacom)

For eNerds CEO, Jamie Warner, the cloud represents the “wild west” of the channel, as vendors battle it out for increased market share.

“At the small business end of town, it’s loose in terms of a managed service provider being able to up skill immediately to become a cloud expert,” he said. “Then the choice is around partnering but who do you go with?

“We’ve been burnt a few times and sometimes we can be stuck in the middle.”

Channel clarity

Today, the cloud market embedded within the channel remains at an inflection point, as complexities continue to impact how cloud technologies and applications are applied and delivered to market.

“What does this mean for traditional channel environments?” Avnet Technology Solutions channel manager, Anthony Carilla, added.

“There’s a huge amount of channel partners in box land still operating as tin pushers. So what does cloud mean for this market?”

For Carilla, key questions now surface around the models that can be deployed in the market that are relevant and sustainable for resellers seeking new revenue streams through the cloud.

“The market is heading for an interesting period in terms of how partners can make the transition,” he added. “And it’s going to be challenging. The industry needs to create offerings which are relevant to these resellers so they can also take their customers on the cloud journey, without imploding at the same time.

“Currently there’s a lot of confusion out there for traditional resellers and they don’t know how the impact of cloud will be truly felt.”

Amidst the rising tide of cloud challenges impacting the core reseller base in Australia, vendors are also reevaluating and the definition of a successful channel partner changes dramatically.

“Our traditional channel base is changing,” Veritas Technologies director of channel sales, Janet Docherty, added.

"More of our partners are now offering a service to customers and looking to provide outcomes. Even though our partners have always been our customers, they’ve actually becoming more like an end user which changes the dynamics.

Janet Docherty (Veritas)
Janet Docherty (Veritas)

“We’re now working with partners to ensure that we’re selling the right technology and that we’re helping build offerings around a partner’s offerings to ensure the customer wins.”

In a cloud context, both vendors and partners are realising the added value of committing to one another, banishing the long-held approach of favouring quantity over quality.

“We’re working with partners who actually want to work with us,” Docherty added. “We’re finding new ways to increase partner profitability and realise growth in markets while also recruiting new partners to help deliver innovative solutions to customers.”

Favoured by partners in equal measure, Meah believes the industry will experience a “big drop off” in the numbers of resellers who haven’t made the change, setting the stage for a landmark few years across the Australian channel.

“There's a big difference between shipping boxes and delivering a service,” he said. “Vendors can’t scale quickly enough or don’t have the resources to go in-depth with a customer, which is how the partner can be of value.

“For those shipping licenses or boxes, now is the time to shift into the trusted advisor role and adopt consulting capabilities. But when the rubber hits the road, it’ll be interesting to see who survives.”

Next steps

Looking ahead, Lowe believes that while cloud continues to capture the imagination of the Australian market, the need for on-premise technology still remains.

“The traditional side of the business is always going to be there,” he said. “It’s a hybrid model and we’ve transitioned from being a traditional box builder to offering deeper levels of value to the customer. You can’t stay still in this market and the last few years has seen more change than the last 15 years.”

With change charging at the channel at an unrelenting pace, value can be found through a services approach to cloud, in response to a shift in how end-users consume technology.

“The fastest growing part of our business is through our service provider partners,” Docherty added. “There’s an increased demand for paying for services on a monthly and our business and our channel is heading in this direction.

Nathan Lowe (ASI Solutions), Anthony Carilla (Avnet) and Aaron Steppat (VMware)
Nathan Lowe (ASI Solutions), Anthony Carilla (Avnet) and Aaron Steppat (VMware)

“While we want our partners to change, we realise that no partner would consider us if we didn’t change also and that’s why we’re investing in our strategies our cloud to ensure we remain relevant to the channel.”

Backed up by Carilla, for partners to excel through the cloud, vendors must also respond and change accordingly.

“Vendors must look at partners and the wider channel not as a cost of doing business, but as a customer retention strategy,” Carilla added. “That means sharing revenues and margins differently and creating models that reflect the market today.

“It’s time for a real change of mind and for the channel to show true collaboration to ensure partners can deliver value through the customers.”

For Lowe, vendors that can document clear strategies around cloud will continue to win the mindshare of partners, emphasising the overriding need for clarity in 2016 and beyond.

“Partners want to work with a vendor that has a vision,” he added. “They know where they want to be but the vendors which don’t have this, or are reluctant to share, are of great concern.

“If they have no long-term plan then the channel should be weary because partners value sharing knowledge and information, assessing where the market is heading and what solutions will best meet the demands of the customer.”

Underpinning this is the need for do more with less, a rule which was once the exception but is now working towards being the channel norm.

“It’s about creating deeper relationships with fewer vendors,” Kennedy added. “It all comes down to uniqueness and value add.”

In creating deeper partnerships with a select group of vendors, Kennedy believes partners can subsequently set themselves apart in increasingly crowded marketplace.

“There’s a massive opportunity for the partner ecosystem to bring their own intellectual capital to the table,” Kaleski added. “It’s time for the channel to develop something that’s unique and to work with the larger vendors such as IBM, Microsoft and Google because we can’t move as fast as our customers want us to.

“If you’re got something unique and you work on the niche spots within the market, then you have the potential to provide real value add in a cloud world.”

This roundtable was sponsored by Avnet, IBM and Veritas Technologies.

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