Enterprise Strategy Group X Research Data Points

Retooling Reseller Voice Challenges

Jeff Hine — Thu, 27 Oct 2011 21:15:27 +0000

Change is tough, especially if it impacts your fundamental business model. Solution providers making the move to cloud are making decisions along quite a spectrum. Some are making compensation changes, building new partnerships, and even building MSP and cloud businesses themselves.

In a recent research study conducted by ESG, The Impact of Cloud Computing on the Channel, ESG asked partners about some of the major challenges they faced as they transition to operating in a world dominated by cloud. The top two challenges were both sales-, not technology-, related. Resellers cited “adjusting business model and compensation for annuity contracts” and “re-training sales people” as the biggest challenges they face in making the transition.

So what actions do resellers say they are taking to overcome these challenges? Training tops the list. Cloud education and training were also cited as the number one thing resellers need more of from their technology vendors.

The moral of the story?

Resellers, don’t let your reps be “deer in the headlights” when the CIO asks about cloud services options for the solutions you’ve been providing. Teach your reps to hunt for and profile cloud opportunities.
Vendors, step up the training and support. Here’s a hint–videos don’t cut it. Gaining mindshare in this space and teaching sales teams used to selling on-premises offerings to craft cloud service based solutions will require more than sexy flash videos that can be consumed over lunchtime.

Resellers Transforming Business Models

Jeff Hine — Tue, 11 Oct 2011 17:41:21 +0000

As cloud service providers get channel religion and realize that the traditional reseller channel matters in getting cloud computing to market, it’s imperative that they understand the reasons why partners are making serious investments in cloud computing. For savvy resellers, cloud is more than a fad, and more than just a new service to add to the line card. It’s fundamental business transformation. In a recent ESG Research study, The Impact of Cloud Computing on the Channel, we asked the partner community what were the main motivating factors driving them to resell cloud computing solutions. For the 42% of respondents who were already selling cloud computing solutions, the reasons are illustrated below.

Of the top three motivating factor, all statistically tied for the #1 reason based on the study variance, “desire to shift to a recurring revenue business model” is the most interesting. The resellers who are going to succeed here are not followers, they are leaders. Perhaps they have had enough of the lumpy transaction-based business model most familiar to product resellers. Perhaps they are looking for long term contracts to increase the value of their company. Or perhaps they see the writing on the wall, and know that the future of the channel is services with expertise in applications and vertical industry solutions. Those courting the channel should keep in mind that cloud will not minimize the channel. It will expand the role of the channel. Successful programs to leverage the channel for cloud services will provide resellers both the opportunity to add unique value, and offer multi-year revenue streams that will attract the right partners, and facilitate their transformation.