The short answer is probably yes. Cloud revenues are growing at 4-5 times the rate of the IT industry as a whole however only 25-30 per cent of partners are cloud ready. Those partners that are cloud ready are gaining net new clients at 2-4 times the rate of those that are not. In a few short years cloud computing, software as a service and managed print services (MPS) has forever transformed the landscape of the information technology and communications industry (ITC). The structural transition from traditional models of the sale of products such as on premise software to the sale of software as a service has begun in all of the major software, hardware and telecommunications companies in all of the major markets around the world.
Sixty to eighty per cent of CIOs will have some sort of cloud adoption plan for 2014. The market growth and industry restructuring changes predicted by the ITC world’s market research establishment predict 25-35 per cent compound growth rates in the worldwide markets for cloud and SaaS solutions out into 2015. For example many industry analysts are projecting that the aggregate size of the cloud computing economy may generate $200 to $250 billion US in economic activity amounting to almost 20 per cent of the global IT spend.
The changes that Channelcorp is seeing in the industry are not transitional in nature; in fact the changes are the most significant structural changes we have seen in more then 25 years consulting to resellers, distributors and vendors. The hardware, software, printing and communications businesses will never be the same again. The cloud, SaaS and managed print services (MPS) driven changes are structural in nature. Structural changes in the business environment require structural changes in those that sell into, and function in the environment.
Why think about cloud centric growth and investment…because as a businessperson you cannot afford to miss structural changes in your business. The cloud and resulting recurring revenue driven opportunity is one of those structural changes that only come around once or twice in a businessperson career. It needs to be understood and a business plan needs to be created to drive the transition.
Multitudes of investment options confront a current reseller of transaction-based solutions such as on premise software solutions. The decision to invest in one vendor of cloud solution over another is one such investment opportunity. The decision for a partner, once a cloud/SaaS/MPS decision has been made, is why one vendor over another, and why the solution portfolio of one vendor over another? Many variables come to play in this decision including your prior experience with vendor as a partner. For example, have you made money with the vendor in the past? Does the cloud/SaaS/MPS business look like another business in which you can make money with the vendor again? For example when you build a financial model of the vendors business proposition how much will you need to invest, how long will the investment take to payback and what will the return on invested capital look like 36 months out? What will the vendor’s cloud channel programs do to mitigate the financial situation created by your transition?
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About Channelcorp
Margaret and Bruce Stuart founded Channelcorp in 1989. The firm is a global leader in the assistance of reseller, distributor and vendor clients. Channelcorp specializes in the business model transformation that is required in the face of the structural changes to recurring revenue driven business models in the worldwide IT business (www.channelcorp.com/services.php). Channelcorp publishes and sells four industry- leading books and 12 white papers (www.channelcorp.com/publications.php). This independent firm has delivered consulting and executive education to vendor, reseller and distribution clients in more then 40 emerging, developing and mature markets around the world. (www.channelcorp.com/workshops.php). More than 25,000 channel professionals from around the world subscribe to the newsletter Channelcorp intelligence (www.channelcorp.com/newsletter.php).
