As enterprises consume more of their infrastructure through the cloud, it will change in fundamental ways how the existing channel ecosystem functions. Preferred suppliers will change. Loyalties will shift. And, the very nature of the products and services that move through the channel will evolve.
For many in the partner world, the move to cloud and multicloud represents risk. But for those that are quick to adapt, this tectonic shift in enterprise IT should create opportunity. But how should channel players position themselves to exploit this transition?
What does multicloud mean?
First and foremost, it is critical to understand what cloud and multicloud mean. While most people immediately think about major cloud service providers like AWS and Microsoft, the move to cloud is about more than applications running on centralized infrastructure.
The promise of cloud is that experience should be transparent. Underpinning all of this is the foundational idea that users should not know (or care) whether a workload is being serviced in AWS, Azure, or on-premises. And, for the experience to be uniform and services ubiquitous, it means that the underlying infrastructure has to be designed to support a seamless experience from wherever the user might be to wherever the workload might reside.
The portfolio expands
The implications of an end-to-end solution are profound for the reseller market. Minimally, it means that opportunities will no longer be bounded by a particular domain—the data center or the campus or the branch. Solutions will need to span all the places in the enterprise network, allowing partners to broaden their opportunity.
Additionally, to provide a seamless experience, there will be software needed for policy and control. The emergence of an orchestration layer provides yet another insertion point for partners looking to expand their presence in customers moving to the cloud. And, the fact that this new offering is software-based and higher-margin should entice partners who are more accustomed to selling hardware to at least explore the multicloud arena.
So does the competition
Of course, with the expansion of products, it means that there will be an increase in the number of players vying for the business. Companies with a traditional strength in one domain will naturally find that opening up their catalog will allow them to broaden their offering, and tying it together under a multicloud architecture will make pull-through opportunities more easily pursued.
And, while this is all in the context of traditional infrastructure, it is impossible to ignore the emerging partner ecosystem that is developing around the cloud providers. AWS, Azure, Google, and the like are all developing a different set of partners whose primary objective is to facilitate the movement from private to public cloud. For these suppliers, they will find natural inroads into private infrastructure as part of end-to-end offerings.
The battleground won’t be products
While the products are the focus for most people thinking about how this is all monetized, the reality is probably a bit different. If the promise of the cloud is that underlying infrastructure is fungible regardless of where it resides, then the underlying parts—at least over time—become somewhat interchangeable.
At its most basic, this means that the strength of a channel partner’s portfolio will not be enough to distinguish it from competitors. As devices become more similar over time, pricing will naturally converge, meaning pricing advantages that come from volume sales will also become less meaningful.
This means that traditional competitive advantages will necessarily evolve. Market share will change hands. Companies will shrink, and some will fail.
But some will win…BIG
And some companies will exploit the changes in competitive landscape. The move to cloud and multicloud is not a single purchase but rather a migration. It requires enterprises to evolve their architectures, their tooling, their process, and their people.
It’s about more than a change in products—it’s about a change in business. And that change means channel partners that are more consultative and offer constructive services that promote change and mitigate risk will find service-oriented paths to higher-margin revenue.
Automated operations in a multicloud world, for instance, will require careful architecture of operations practices as companies integrate products, tools, and workflows to support a more dynamic infrastructure. In these automated operations, there is opportunity to sell software, develop packaged automation services, provide value-added support, and coach companies on how to operate in an environment without silos.
A change in approach
Of course, moving from product-based to consultative selling is not easy. It requires technical expertise and operational prowess. It means embedding into the business processes rather than selling into a cost center.
And this all requires engaging with the technology suppliers in different ways. The discussion has to evolve from speeds and feeds to operations and culture. The biggest barriers to this brave new world might seem technical, but they will ultimately prove to be so much more.
The downside is that this can be a tricky transition. The upside is that understanding how someone does business is way stickier than selling interchangeable parts underneath it all.