The Channel

On Rad''s Radar: The Transactional Agent in Cloud

By TMCnet Special Guest
Peter Radizeski
  |  November 01, 2011

This article originally appeared in the Nov. 2011 issue of INTERNET TELEPHONY.

All of cloud is begging the channel to get on the bandwagon and sell cloud services to their customer base. Two things set that back.

One is describing the transactional model as lame or broken or dying. Bandwidth is a commodity business. So are cellular and TV – both flat markets. In a commodity market, where customer acquisition is actually about taking customers away from a competitor, for a lack of value, price is how replacement services are sold via a transactional model.

Don't blame the channel for this, almost all the carriers have failed to build a case for the value of their T1, broadband or metro Ethernet access over another. When the suppliers can't supply a value proposition, the sales force will sell any way they can.

Let's not forget that this commodity access – T1, ME, DSL, 4G, etc. – is the avenue to the cloud applications. The cloud providers need transactional agents in order for the cloud customers to access the apps and data.

Can cloud be sold the same way? I can make a case that it can be. There are a number of CRM applications, web hosting services and e-mail providers. The marketplace – the buyer - does not know how to differentiate between them. Until a trusted advisor can come along to explain the value proposition of app A over app B or service X over service Y, price will be the differentiator.

No. 2 is that a big name in cloud, InterNAP, recently cut commissions and voided channel contracts. (This occurred at least twice, since Equinix (News - Alert) cut the Switch & Data agents.) Responding with that-is-the-nature-of-the-channel shrouds the realization that so far cloud providers don't value the channel. Why would the channel sell cloud?

The messaging that cloud providers direct at the channel is not positive. It’s almost desperate. “Please sell my stuff!” Beyond the tale of another revenue stream and the charts of analysts’ projections, cloud providers have to gain the trust of the channel as well as demonstrate the value of the offering to the customer base.

Peter Radizeski is head of telecom consulting agency RAD-INFO (News - Alert) Inc. (http://rad-info.net/).


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Edited by Stefania Viscusi

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