Channel in the Cloud!

In the ever-evolving landscape of modern technology, few advancements have left as profound an impact as the evolution of cloud technology. From its humble beginnings to its current ubiquitous presence, the journey of cloud technology has reshaped the way businesses operate, individuals interact with information, and societies connect on a global scale. To define it simply, Cloud computing is nothing but using Internet to store data virtually which can be accessed from anywhere with the desired security. Thus, no physical installation of the data centers and servers is required meaning cost and space saving for not only small and mid-size company, but for large sized too. Today, Cloud Computing is being used by all types of businesses, of different sizes and fields. Distributed systems, Web 2.0, virtualization, Mainframe computing, Cluster, Grid and Utility are some of its types. In this article Associate Editor, channel360MEA embarks on a captivating exploration of the role of channel community in the world of cloud technology, understanding their challenges and transformative strategies adopted by them to sustain. 

Cloud Today

Just a few decades ago, the idea of accessing data, applications, and services remotely through a network seemed like science fiction. The concept of the cloud emerged as a solution to the limitations of traditional on-premises infrastructure, offering unprecedented scalability, flexibility, and cost-efficiency. As technology giants and startups alike recognized the potential of this paradigm shift, a race to harness the cloud’s power began.

The early stages of cloud technology were marked by the establishment of pioneering companies that laid the groundwork for what was to come. These visionaries introduced the world to Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS), providing businesses with alternatives to resource-intensive in-house solutions. However, challenges related to security, data privacy, and reliability needed to be overcome to win over skeptics and realize the cloud’s full potential. 

The turning point arrived as advancements in virtualization, networking, and data center management converged. This convergence led to the emergence of public cloud providers, including Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP). These giants democratized access to cutting-edge infrastructure, enabling startups and enterprises alike to harness immense computational power without hefty upfront investments. 

Over the last few years a growth of the public cloud market is being witnessed along with a shift in the IT consumption from traditional on premise infrastructure and perpetual licenses to subscription and consumption based cloud services. Different drivers like the covid-19 pandemic and the adoption of the hybrid and multi cloud approach have accelerated this transformation. Nowadays most of the corporate data is already deployed on the cloud.  

For more than a decade, Cloud Box Technologies has been working closely with the brands to make the digital journey of its customers’ seem less. Avinash Gujje, Practice Head – Infrastructure, Cloud Box Technologies calls its journey with the evolution of cloud, hybrid, and multi-cloud has been truly remarkable. It involved a fantastic transformation from on-premises workloads to cloud workloads, made possible by the emergence of cloud-native applications. While certain workloads remain on-premises due to their specific nature, adopting a hybrid or multi-cloud structure has become a strategic consideration. This approach allowed them to cater to the diverse IT requirements of our business and applications. 

Channel matching the pace with the cloud 

Today, cloud customers look for cloud-like solutions and the benefits of cloud including flexibility, scale up and down as needed, as-a-service payments. This has created conditions for an increase in subscription model adoption. This is driven by strong customer demand for more OpEx options in storage hardware and software purchasing to avoid large CapEx outlays. “In recent years the channel has recognised that the subscription transition is an attractive proposition to customers. It offers partners new recurring revenue streams and creates new possibilities for partners to build peripheral services for customers. However, for everyone to thrive in a subscription world, vendors need to evolve their compensation models for those partners selling subscription services to ensure it’s a win-win,” informed Geoff Greenlaw, VP Channel, EMEA & LatAm, Pure Storage. 

Adding further he said, “However, using multiple cloud providers can cause data mobility issues. Adopting Kubernetes allows for enhanced data flexibility by being application centric and cloud agnostic, allowing an organisation to move the whole app or workload as many times as needed. Partners can support their customers in this journey by making sure that their IT environment is built for this portability from day-one.” 

Observing this cloud shift and the consumption-based model adoption happening in the market, Silmi Khanfir, Director of Cloud and XaaS – Middle East and Africa, Mindware shared that they strongly feel that VAD’s and IT companies in general who will miss this transformation will run a high-risk long term to be obsolete or to be playing only in the low growth markets. “This cloud evolution became a natural driver and an opportunity to transform ourselves as VAD. We’ve developed a focused strategy for the cloud business based on a dedicated cloud business unit with the mission to be the best cloud distributor in the region and offer our partners aggregated solutions from different cloud vendors, to help them and their clients in their cloud transformation journey,” he elaborated.  

On the other hand, speaking about the role of channel in cloud deployment, Uday Shankar Kizhepat, Vice President and General Manager- Middle East and Africa Region, WSO2, shared that the channel has been proactive in keeping up with the rapid advancements in cloud technology. “Recognizing the growing demand for hybrid and multi-cloud solutions, channel partners have embraced this shift and worked towards enhancing their capabilities in these areas. They have invested in training their teams, acquiring relevant certifications, and developing expertise in cloud integration and management. This proactive approach has enabled the channel to effectively meet the evolving needs of customers and capitalize on the opportunities presented by the cloud landscape,” he shared. 

From recruiting high skilled cloud resources in sales, pre-sales & post sales architecture partners have to invest in operations optimization in a cloud platform to run it effectively. For business ease, Mindware has segmented its portfolio and offerings in three pillars: the first pillar consists of solutions from public and private cloud providers, the second pillar consists of complementing solutions from cloud ecosystem vendors covering security, backup recovery, endpoint management, document management and e-signature solutions that can be easily attached to the public cloud solutions. As third offering pillar is supporting their existing vendors in their cloud transformation strategy, skilling their partners and shifting their mindset from on premise to cloud, from perpetual licensing to subscriptions and consumption-based billing.  

It is viewed that those channel players who are yet to embrace this shift – a key consideration pertains to which marketplace to build such a listing on. “Here, my advice would be to consider where your customers are. After all, if your biggest customers already have commitment with a particular hyperscaler, it makes it simpler for all parties to transact business on the same platform,” Silmi added. 

At the same time, NetApp’s journey in the evolving cloud landscape, encompassing Cloud, hybrid, and multi-cloud environments, has been full of continuous innovation, strategic partnerships, and unwavering commitment to its channel partners. From NetApp’s perspective, the channel has successfully kept up with the rapid pace of the cloud’s evolution, including the rise of hybrid and multi-cloud environments. 

Sharing channel’s perspective, Avinash shared, “By embracing a hybrid or multi-cloud model, we have been able to help our customers to improve operational efficiency. It not only simplifies maintenance but also provides ease of use for their business operations. Leveraging Platform as a Service (PaaS) and Software as a Service (SaaS) solutions has enabled us to adopt multi-cloud architectures. 

Brands are not ignorant of the fact that the channel is important in adapting to the evolving cloud landscape. Channel partners are crucial to provide exceptional value to customers in the cloud era. 

Collaborative Approach

The emergence of cloud marked a big shift in the channel ecosystem. Since cloud adoption is key to a digital transformation journey, partners had to transform in three ways. Elaborating on this, Jorge Lungo, Vice President, Middle East & Africa, Dynatrace informed, “First, accept and embrace the opportunity, reflect this change in their existing portfolios, and create new units dedicated to the cloud and digitization. Second, expand their knowledge base to understand different types of cloud architectures and challenges to cloud adoption. Third, for the channel ecosystem to develop the necessary talent and acquire the right skillset to be able to meet the length and breadth of customer needs. As the shift shaped the business landscape, we observed that one of the boosters for our partners was often collaborating with the three key hyperscalers.” 

WSO2 also understands the importance of empowering our channel partners to succeed in the ever-changing cloud market. We have implemented various initiatives to support them in this journey. These include comprehensive channel training, attractive incentives and margins and dedicated partner support. “All this enables them to address customer requirements more effectively and differentiate themselves in the market” added Uday Shankar. 

But that’s just not the only important part of the story, if the channel seeks support and guidance from its cloud brands, so is the case with the vendors who are working with the principal partners (cloud). The support from the principal partners has been instrumental in NetApp’s journey in the Cloud, claimed Maya. They have established strong relationships with leading cloud service providers, such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP). These partnerships have been mutually beneficial, enabling NetApp to integrate their solutions seamlessly into their respective cloud ecosystems and offer customers a comprehensive range of cloud services. 

“Our principal partners have provided us with valuable resources, technical expertise, and market insights that have helped shape our cloud strategy. Through collaboration and joint go-to-market initiatives, we have been able to reach a broader customer base and drive customer success in the cloud,” informed Maya Zakhour, Director- Channel Sales, Eastern Europe, META, Iberia, LatAm, NetApp. 

Cloud Box’s Technologies’ Avinash Gujje also informed, “The support provided by our principal partners extends beyond technical assistance. They actively contribute to our solution design process, leveraging their expertise and experience to help us architect efficient and effective solutions. Their insights and guidance have been invaluable in optimising our infrastructure, enhancing performance, and ensuring the scalability of our systems. The collaborative and supportive nature of our relationship with our principal partners fosters mutual growth and success. Their commitment to our shared goals and their willingness to go the extra mile to support us have played a pivotal role in our achievements.” 

Brands who are integrating their solutions on the cloud agree that the support from their principal partners has demonstrated a shared commitment to customer success and innovation in the cloud. These partnerships have strengthened their position in the market, expanded their reach, and enabled them to deliver industry-leading data management solutions that help businesses harness the full potential of the Cloud. 

It is a universal truth that channel community needs three things to survive, right business acumen, the trending product line and the vendor support. Thus, the vendors who are integrating their solutions on the cloud have double responsibility of maintaining relationship with brands while working closely with its channel partners to ensure they remain at the forefront of these advancements. 

Bridging the gap

With the appetite for cloud adoption having scaled exponentially in recent years, hyperscalers have grown by leaps and bounds. Today, their marketplaces have become the preferred procurement model for customers. Channel partners that discount the significance of this trend will find themselves at a disadvantage as the market continues to mature. 

Ghassan Abou Rjeily, Regional Channel Sales Manager – Emerging Market, Riverbed Technology, feels that instead of being intimidated by the shift, partners that are pioneering the very nature and role of the channel are beginning to build their own service offerings on these cloud marketplaces. “They are combining cloud solutions from multiple vendors and packaging their value-add services around these to create compelling offerings that can be easily consumed by end customers,” he added. 

To help them strive, vendors are taking extra efforts in channel training to give them the edge. Channel training is supported by certifications to equip partners with the knowledge and expertise needed to effectively sell and support solutions in the cloud market. Marketing and co-selling support is another area of focus, where brands collaborate closely with their partners, providing tools and resources to generate demand and increase brand visibility. By providing a collaborative environment, vendors are trying to create a thriving ecosystem to enable channel partners to thrive and excel in the cloud industry. 

At ManageEngine, they take a holistic approach when it comes to the training of channel partners. Sujoy Banerjee, Associate Director, ManageEngine shared, “We educate them on the value proposition and about the benefits of hybrid or multi-cloud solutions over strictly on-premises solutions. We train partners to know the best type of cloud deployment to recommend to each of their clients, with a focus on agility, security, and cost optimization. And also, we ask them to leverage account-based marketing with clients, which positions them as business partners that can provide support, advice, and guidance.” 

When it comes to Dynatrace, training is a continuous and a mix affair of both in-person and online through their Dynatrace University. “Our training workshops aim at upskilling and reskilling channel partners to address the evolving challenges to cloud adoption, as well as to achieve market competitiveness. We also assist channel partners in building blueprints for new product and service offerings,” added Jorge Lungo. Furthermore, Dynatrace hosts events and initiatives throughout the year, such as Amplify and Innovate, in order to exchange industry best practices and ensure conversations about Intelligent Observability solutions and its benefits are impactful and transformative. 

Pure Storage has built tools, campaigns and initiatives to help partners win and develop long term relationships. This includes focusing on making it easy to do business from wherever organisations are in the channel ecosystem: MSP, distributor, channel or alliance partner. There is a dedicated effort to ensure every possible route to market is capitalised on, and partners are supported in a way that allows them to delight customers. 

Another element to the Pure Storage ethos is that deals are never taken direct, away from partners. “Pure Storage is a 100% channel organisation and that remains the focus. Working together positions both parties better for success. In addition we offer a healthy and robust set of incentives and rewards at both the partner organisation and individual level. We strive to make it easy and profitable to do business with Pure,” added Geoff Greenlaw. 

The right Approach

So, does the evolution means squeezing of profitability, or it has no relation? From NetApp’s perspective, the evolution of the cloud does not necessarily mean a squeezing of profitability. In fact, the evolving cloud landscape presents new opportunities for channel partners to enhance their profitability and drive business growth. While the cloud market may have increased competition and pricing pressures, it has also opened up avenues for revenue streams and value-added services. 

NetApp claims that they understand the importance of enabling the channel partners to maximize profitability in the cloud era. “We offer competitive margins, attractive incentives, and performance-based rewards to incentivize partners and ensure their financial success. Additionally, our comprehensive training and certification programs empower partners to enhance their expertise and differentiate themselves in the market, enabling them to command premium pricing for their services,” shared Maya Zakhour. 

In reality, with the adoption of cloud technologies, businesses can leverage the scalability, flexibility, and cost-effectiveness offered by cloud platforms. This allows for optimised resource utilisation and the ability to scale infrastructure as needed, which can ultimately lead to improved profitability. By efficiently managing workloads and leveraging cloud-native applications, businesses can streamline processes, reduce operational costs, and achieve greater operational efficiency. 

From a business model point of view, the channel community would need to evolve to address the market with an open mind. A smart partner would need to create consortiums with other partners by evaluating their strengths and their addressable markets. They need to cease growing their teams in a reactive manner and rather address customers request through alliances and cooperation with other partners. 

Ghassan Abou Rjeily, opines that from solutions and services offerings, they will need to have the flexibility to sell anything as-a-service to help customers to spend more from their Opex rather than their Capex budgets. The customer should have the flexibility to buy a service on a subscription basis or via a managed services approach. This would introduce new products such as Visibility-as-a-Service, Acceleration-as-a-service or Visibility Operation Centres. These are all Riverbed solutions that can be sold to customers as-a-service. 

Channel partners must undergo a significant change in attitude to thrive in the evolving cloud landscape. They should embrace a mindset of continuous learning and adaptability, recognizing the need to stay updated with the rapid advancements in the industry. Shifting from a product-centric to a solutions-centric approach is essential, as partners should focus on understanding customer pain points and offering comprehensive solutions that address their needs holistically. Prioritizing customer success is key, emphasizing long-term relationships, understanding customer goals, and providing value-added services.  

Collaboration and ecosystem thinking are crucial, as partners should seek strategic alliances and leverage partnerships to enhance their offerings and extend their reach. Lastly, adopting a business transformation mindset is necessary, as partners need to explore new revenue streams, evolve service delivery models, and reimagine their value proposition in the cloud era. By embracing these attitude changes, channel partners can position themselves for success in the dynamic cloud landscape, driving growth and delivering exceptional value to customers. 

Silmi shared that at times since the cloud business requires specific skills and produces a high demand of professional services, cloud vendors squeezed the margin on transactions to shift the focus of partners and distributors to value add and services. From a transactional perspective the cloud business is considered as a low margin business, but on the other hand it has a high services attachment rate and it secures a recurring revenue stream and customer stickiness. 

Thus we can say that the evolution of the cloud has led to increased customer demand for data management solutions and services. So, while the cloud landscape may bring changes and challenges, it also creates opportunities for channel partners to thrive and achieve profitability.  

To make the most of selling cloud, hybrid, and multi-cloud solutions, Uday Shankar from WSO2 advises the channel partners to invest in continuous learning. Such as, staying updated with the latest advancements in cloud technology and acquiring relevant certifications. This will build confidence in their abilities and help them provide valuable insights to their customers. 

There is also the need to understand customer needs. To do this, partners must take a consultative approach with their customers and invest time in understanding their specific requirements. This will enable partners to recommend the most appropriate solutions and build long-term relationships. Next, partners must also pay close attention to market positioning. By embracing these strategies, the solution partners can position themselves as trusted advisors, drive customer success, and capitalize on the growing opportunities in the cloud market. 

Finally

Keeping in mind the importance of staying relevant and ahead of the competition, channels are prioritizing strategies that follow market trends in rapidly changing business models. Since migrating to the cloud is now a necessity rather than just another opportunity, channels are migrating their workforce and spending to the cloud. Along with cost-effectiveness, they are also offering quality services and reliability to clients with faster delivery. They are showcasing flexibility to proactively target these new personas.  

The journey of cloud technology is far from over; it is a journey that will continue to inspire and shape our digital future for years to come. We have already witnessed a surge in the popularity of cloud services in the Middle East in recent years and don’t expect this momentum to cease. Those who are still in dilemma, must start investing in new talent and cultivate skills specifically for digitization initiatives, cloud adoption and migration, because the challenges are unique and vary from customer to customer and industry. Partners must therefore work to stay relevant in the cloud ecosystem. They can do this by combining cloud offerings from multiple vendors and packaging their value-add services around these to create compelling offerings that can be easily consumed by end customers. 

As we gaze into the future, the cloud’s potential remains boundless. With the impending fusion of 5G connectivity, edge computing, and the ever-expanding Internet of Things (IoT), the cloud will continue to be a cornerstone of innovation, enabling real-time insights, unprecedented scalability, and enhanced user experiences. However, this future is not without its challenges, as concerns around data security, privacy, and environmental sustainability persist. As we navigate these complexities, one thing remains clear: the cloud will remain an integral enabler of progress and role of channel cannot be omitted in making this journey adaptable.