Mon, 16/02/2009 - 13:17
In the current economic context, Software as a Service and cloud computing are increasingly being pushed by vendors as ways of cutting costs: why own it when you can rent it?
The least that can be said about these new types of IT infrastructure is that there is no unified remuneration model for the channel. Every vendor is proposing its own scheme and this is creating a lot of confusion in the reseller community.
Do you feel that SaaS/Cloud computing vendors are treating you fairly? Are you ready to resell these types of products? Have a got a strategy in place? What is your outlook for the next two years?
I agree there is a lot of confusion and it is hard to work out what the revenue model will look like. But to be honest I'd rather own it myself - what happens if the vendor goes under in this climate? I'd be up the creek... And that's not such a far fetched question - look at Nortel.
At least if I have control of the service by owning the infrastructure myself I can control the service and the data that goes with it.
Nortel aren't going under they're simply re-aligning themselves..
This model will not suit all businesses. Some see the benefits of subscribing to services and not having to worry about equipment failures etc. Think of the IT headcount some companies could lose, plus the benefits in reduce power consumption, general energy savings as well.
The mentality in Australia for too long has been to purchase IT, why bother, when you refresh it every 3 - 5 years.. Simply lease it, put it under a managed service, or subscribe to it monthly and not worry about it, think of so many headaches removed..
More importantly from a BUSINESS perspective, the benefits are massive as per above from energy savings, headcount, cash flow etc.. The bigger picture is sometimes missed versus the IT Department's fear of losing jobs..
true, but even if a company goes under for a day that is millions for some. If you have control yourself then you maintain responsibility and don't have to fret about other companies' lax standards.
I'm not suggesting google has lax standards, but they put millions of people offline for hours and hours this week - that is never good for business.
I think that Cloud Computing will represent a different revenue stream and customers will decide "To Cloud or not to Cloud". Most customers will end up with a "Private Cloud" some will take advantage of a "Public Cloud" and others will continue as is economic context or not.
The issue of user behaviour change, organisation politics and other policies within corporates will be the biggest hinderance to cloud. Consumers will take advantage of it but not sure corporates will jump on the bandwagon soon.
Think of previous models like ASP, SSP and xSP that were along the same veins as cloud...how many of those companies made a ton of money out of it ? More to point how many are still around ?
People will be the biggest inhibitor to cloud adoption not technology....as it was in the past and continues to be today.
Cloud Computing will be a godsend for really small businesses who simply can't justify IT staff. But scale that up a bit and cloud or no cloud you still need someone to implement, manage, advise. So resellers might focus more on services than product. Given the margins on product that's hardly going to be a kick in the guts.
A business model shouldn't be threatened as in "we charge for our time, for our expertise & for the value we add". But if your business model is "we sell and install hardware" - then you are doomed. Not just because of the killer Cloud.
Cloud computing will threaten many IT resellers cash cows - hardware sales & related implementation services. Only if they are short sighted, dogmatic and refuse to innovate around a core value proposition.
IBM still sell business machines internationally. The PC, mainframe, client/server, Internet and clouds are just opportunities to them.
-lee-
http://www.BrandedKnowledge.com.au/
http://blog.BrandedKnowledge.com.au/
IMO, the business model isn't entirely doomed. There will always be a market for purchasing hardware with implementation.
But will it get much smaller as cloud computing proves itself? Yes. But will core services, service-critical infrastructure and high-security environments disregard physcial ICT? Never. These industries answer to paranoia and worst-case-scenarios and will not be shifting to storing data in non-hardened facilities.