IDC UAE market analysis reports says “Services providers that do not transform now, by enhancing their IT services portfolio, will encounter serious challenges in terms of profitability, and will struggle to sustain business and remain relevant in the long run. Providers are advised to identify and prioritize managed services and cloud service to boost their portfolio”
Partners (Systems Integrators) please take note. Your customers are looking into Cloud. If you don’t engage them on Cloud services; they will go look for someone who does. IT budgets are reducing with a YOY growth between 2% – 4% whereas Cloud market is growing around 24% .
Minus Cloud services portfolio, your addressable market share will shrink and sooner your business may not exist in a meaningful way.
What role Partners (Systems Integrators) can play in the Cloud Market? We have identified five different Roles based on the market forces and they are
CLOUD BUILDER: Partner help build, manage and maintain private cloud. Partner’s revenue comes from consulting services and implementation services. They also make margins over hardware and systems software provided. Evey systems integrator can adopt this model provided they build their Cloud professional skills for Pre and post Cloud implementation.
CLOUD SERVICE PROVIDER: Partner owns the infrastructure for cloud services and offers Cloud services especially in XaaS space to partners and customers. Their earn Annuity revenues from Cloud Service and licencing for hardware and software.. There are major UAE Local Cloud service providers such as Pacific control with Etisalat, Equinox with du, Injazat and global Cloud Service providers such as Microsoft, Amazon, Rackspace, Google and so on
CLOUD RESELLER: Partners resell Cloud Providers services primarily in two areas IaaS and SaaS. Every UAE based IT vendor can take up the role of Cloud Reseller – selling Local (Pacific control – Etisalat; Equinox – du) or Global Cloud Service providers services (Amazon, Microsoft, Google, Rackspace and so on). This is the simplest and least cost model wherein Partners may earn through referral (2% – 3% GM), Resell (15% – 20% GM) or white label (20% – 25% GM) the services. IT vendors can resell SaaS from Salesforce.com, ZOHO, Ramco and others.
CLOUD APPLICATION BUILDER: Partners help build and implement cloud enabled applications for various cloud models such as Mobile apps. Partner value proposition comes from specialization or building IP in an Industry such as banking, Hospitality, Retail or others.
CLOUD BROKER: Partner aggregates cloud requirements and also extends value added services. They offer one stop shop for cloud services. Their revenue comes from driving consumption and volume commitments.
Gartner: “In the not-too-distant future, banning cloud applications from the workplace will join the list of quaint throwback practices,” said David Mitchell Smith, vice president and Gartner Fellow. He and other Gartner analysts who cover cloud computing predict that, “By 2020, a corporate ‘no-cloud’ policy will be as rare as a ‘no-Internet’ policy is today.”
Partners should begin building right internal expectation towards revenue disruption from cloud services. Next step is to add a basic remote Help Desk, NOC or managed services to prepare for recurring revenue model and offering portfolio of Cloud services.