Is the channel in the cloud computing age still relevant?

During the Cloud EcoSystem Winter Meeting a panel discussed which relevants the channel still has in the cloud. Since the majority of the participants were part of the channel less critics were made. And even things about changes were not discussed, because some already delivered software over ASP and so they are since 1998 in the cloud.

ASP is not cloud computing

I will not discuss ASP (Application Service Providing) vs. SaaS (cloud). That ASP has nothing todo with SaaS (software-as-a-service) respectively cloud computing is not just propagade by me but also by other publications. (Btw, I was very thankful, that Stefan Ried cleaned up all the „cloud myths“ during his talk and showed all attendees the true characteristics and benefits of the cloud, thanks Stefan!)

The channel have to change

Let’s come to the channel. It will be worse to say that it dies. On the one hand „something“ is to sale everytime and the lobby behind that will do their best to keep this business model alive. But it will be worse to close the eyes and making things going on as they have been made for years. Sure, „You’ll always need hardware!“ but even this amount? And are countless suppliers able to live just from selling hardware?

In my opinion, software reselling, a big part of the whole market, is dead. Just think about which type of software is shipped by media, I spontaneously just have operating systems in mind. Although it’s possible to download it from the website of the vendor as well. Just like other software which is not available as SaaS today. For example, Microsoft ships the new Office 365 Home Premium in a box with just a small card with a code on it. The software is downloaded or streamed afterwards from a Microsoft website.

From reseller to integrator

In my opinion the typical channel for software reseller is too late to save. Companies in this area should as soon as possible think about other options. One possibility is a partnership program with software vendors, to help customers migrate and integrate with consultation-intensive solutions (actually SaaS applications are intuitv to configure and use). That means, a software reseller needs to have more expertise than just sell software and become a systems integrator.

A further idea is to build an own marketplace for SaaS applications. Here the differentiation with existing offerings is necessary and besides offering solutions from different categories even integrate them (by standard) in order to have a central data management and no isolated solutions. Here you can see, that the reseller also becomes an integrator. Leaving just reselling software.

Sure, there are software reseller who even integrate. The classical systems houses. But even these needs to change, thanks to the cloud.

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About the Author

Rene Buest is Gartner Analyst covering Infrastructure Services & Digital Operations. Prior to that he was Director of Technology Research at Arago, Senior Analyst and Cloud Practice Lead at Crisp Research, Principal Analyst at New Age Disruption and member of the worldwide Gigaom Research Analyst Network. Rene is considered as top cloud computing analyst in Germany and one of the worldwide top analysts in this area. In addition, he is one of the world’s top cloud computing influencers and belongs to the top 100 cloud computing experts on Twitter and Google+. Since the mid-90s he is focused on the strategic use of information technology in businesses and the IT impact on our society as well as disruptive technologies. Rene Buest is the author of numerous professional technology articles. He regularly writes for well-known IT publications like Computerwoche, CIO Magazin, LANline as well as Silicon.de and is cited in German and international media – including New York Times, Forbes Magazin, Handelsblatt, Frankfurter Allgemeine Zeitung, Wirtschaftswoche, Computerwoche, CIO, Manager Magazin and Harvard Business Manager. Furthermore Rene Buest is speaker and participant of experts rounds. He is founder of CloudUser.de and writes about cloud computing, IT infrastructure, technologies, management and strategies. He holds a diploma in computer engineering from the Hochschule Bremen (Dipl.-Informatiker (FH)) as well as a M.Sc. in IT-Management and Information Systems from the FHDW Paderborn.

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