Why the Channel is High on the Cloud (And What It Can Do to Sustain That Feeling)

By Paula Bernier, Executive Editor, TMC  |  December 22, 2015

Players in the channel are generally optimistic about their future in the next several years, CompTIA’s (News - Alert) Fifth Annual State of the Channel study indicates. The channel association, which released the study in October, says those surveyed chalk up this optimism to such factors as the new opportunities cloud computing is creating, growing demand for managed services, and the fact that more companies are likely to turn to trusted advisors in the channel to help them sort through growing complexity in selecting and implementing new solutions.

In an interview with INTERNET TELEPHONY, Carolyn April, senior director of industry analysis for CompTIA and the author of the study, says that’s good news because when the association talked to channel partners about the cloud five years ago “there were crickets” and a lot of trepidation among the channel about what the cloud would portend for its future. Now, however, she says, there’s an understanding that many customers might like the input of third parties that can act as non-partial advisors about buying decisions related to cloud services and help them bring together various offerings from different vendors.

“So that’s a good spot for the channel to plug in,” she says.

However, while channel partners tend to see the cloud as an opportunity, April says the cloud today represents a small (but growing) portion of channel revenue.

Security is the No. 1 area in which the channel expects to see the most upside in the coming year, according to April and CompTIA. Cloud infrastructure, and anything related to hosting and compute in the cloud, are also hot areas in general and places in which the channel is putting focus. Storage is among the low-hanging fruit, she adds, saying that there’s an insatiable appetite in the market for storage.

Channel partners going forward may want to acquire expertise in customer application development and related to key industry verticals, April suggests. App development has traditionally not been in the channel’s wheelhouse, she notes, but the channel is working on changing that. That’s encouraging, she says, explaining it could provide those partners with longer and higher margin customer engagements. Gaining expertise in such niches as health care, manufacturing, and other business verticals and parts of businesses is also valuable in the marketplace, she says, and may be an untapped opportunity for the channel.

To be successful, she suggests, channel partners need to understand what the cloud means to their own companies and to the organizations they are selling into. They also need to understand that, increasingly, they will be selling more to line-of-business leaders as opposed to IT and telecom staff members.

So that’s what customers are looking for from their partners. What, then, are channel partners seeking from the companies whose goods and services they are selling?

According to April, channel partners want to work with vendors that are easy to do business with. The average IT channel vendor is involved in eight different vendor partner programs, she adds, and there’s no one place where all the vendor benefits, requirements, and resources are aggregated. So if you’re a 10-person channel company, it is challenging to keep track of what’s happening in all those programs, and it doesn’t make sense to dedicate an employee to manage that.

“It’s like a firehouse of information coming at them,” April notes.

That said, the simpler companies can make their programs for the channel, the better off they will be, she says. That may require a company to break its channel program into different efforts to address the needs of various kinds of channel partners.

Edited by Kyle Piscioniere