Cloud is changing the distribution landscape, and though the channel is a critical enabler of cloud adoption, distributors have to rethink their business models to adapt to this new reality.
Cloud services have reached a point of maturity, with most major technology suppliers coming up with cloud offerings. This is turning out to be a lucrative option for distributors reeling under shrinking revenue streams. However, they have to chart a course as to how they play and participate in the cloud market – whether to partner with a cloud provider and reseller their offering or actually invest in their own cloud offering.
Cloud offers alternative streams of revenue to logistics and finance for distributors but they need to consider how they are adopting the technology changes in the market to their own business and have the right infrastructure to support it.
Distributors should also pick the most lucrative option when it comes to cloud depending on its size and evaluate what their partners are looking for. Industry experts suggest the aggregation model is the most ideal one distributors.
“Distributors will always have the channel, which the vendors will utilize to sell their services and products. However, the delivery and charge back models may see a change. Most of this is too early to infer but it is a guarantee that it will disrupt certain operational function of the organization,” says Joseph.
Coulston says there are multiple roles a distributor can play when it comes to offering cloud services – they can provide a ‘template’ to resellers on how to design cloud offerings for customers, they can offer a hosted cloud environment for their resellers to sell on – either as a public cloud offering, or more likely in the short term and small private cloud offering – as a hosted type service.